Customs, Excise and Gold Tribunal - Delhi
Tarsem Lal Maglani vs Collector Of Central Excise on 11 December, 1986
Equivalent citations: 1987(30)ELT797(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. This appeal is directed against the Order-in-Original No. 1/85(G.C.) dated 28-5-85 passed by the Collector of Central Excise, Jaipur, imposing a personal penalty of Rs. 50,000/- on the appellant and also ordering for the cancellation of his gold dealer licence.
2. Factual backdrops : In. pursuit of the information, the Customs (Preventive) Officers on 13-7-83 apprehended one Shri Jitender Kumar Bhutani & Kashi Ram, resident of Sri Ganganagar while he was boarding the train bound for Sri Ganganagar at Jodhpur railway station. As a result of his personal search 5 pcs of primary gold of different sizes and shapes were recovered and seized along with a piece of paper on which figures 594.850 and 1,01,997 were written. Two railway tickets representing railway fare and reservation were also recovered. The purity and weight of the seized gold was also tested. After proper verification, weighment and testing, the Valuer certified that the seized gold weighed 594.000 gms of 24 carats purity. In his statement the said Shri Jitender Kumar Bhutani stated that he was carrying the seized gold to Sri Ganganagar to be delivered to the appellant who had given him on amount of Rs. 1,03,000/-for the purchase of the gold. He further stated that he purchased the gold from one Shri Shiv Prakash Soni of Jodhpur and the gold was delivered by Shri Shivji Soni to him at the residence of the said Shiv Prakash's brother-in-law Shri Ravinder Kumar where he stayed on 13-7-83. As a follow-up action the business premises of the appellant was also searched which resulted in the recovery of 29.300 gms of primary gold which was kept concealed in the pocket of his shirt worn by him. Another quantity of 35.150 gms of primary gold was recovered from one Shri Ramesh Kumar who was present at the business premises of the appellant at the time of the search. The said gold was also seized. (However, we are not concerned with the recovery of the said 29.300 gms of primary gold which was seized from the pocket of the appellant nor we are concerned with the recovery and seizure of the primary gold weighing 35.150 gms said to have been recovered from the said Shri Ramesh Kumar as the same were not the subject matter of the adjudication proceedings.) As a sequel thereof Show Cause Notices calling upon the said Jitender Kumar Bhutani, Shiv Prakash Soni, Ravinder Kumar and the appellant were issued with respect to the primary gold weighing 594.000 gms which was recovered from Shri Jitender Kumar, to show cause as to why the seized primary gold be not confiscated and why the penal action be not taken under the Gold (Control) Act, 1968. In reply to the Show Cause Notice the said Shri Jitender Kumar claimed the ownership of the seized gold. The appellant, however, in his reply to the Show Cause Notice stated that he has not given any money to the said Shri Jitender Kumar for the purchase of the gold in question from Shiv Prakash Soni and it was on account of enmity that Shri Jitender Kumar has falsely named him. After the usual enquiry, the Adjudicating Authority after exonerating Ravinder Kumar concluded that the appellant had employed the said Shri Jitender Kumar for the purchase of the contraband gold weighing 594.000 gms from Shri Shiv Prakash Soni. On these findings, he confiscated the gold in question absolutely and imposed the personal penalty of Rs. 50,000/- each on S/Shri Jitender Kumar, Shiv Prakash Soni and the appellant. The Adjudicating Authority also ordered for the cancellation of the gold dealer licence of the appellant holding that since the appellant has been convicted of the offence of dealing in contraband gold in violation of the provisions of the Gold (Control) Act, his licence is liable to be cancelled. Being dissatisfied, the appellant has filed the present appeal.
3. We have heard Shri A.C. Jain, learned counsel for the appellant and Smt. Nisha Chaturvedi, learned SDR for the respondent.
4. Shri A.C. Jain, learned counsel for the appellant at the outset submitted that there is no legal evidence against the appellant to show that either he was concerned with the confiscated gold, or was the owner or financier as held by the Adjudicating Authority. He vehemently contended that the Adjudicating Authority, mainly relying on the statement of Shri Jitender Kumar Bhutani - other guilty person - has concluded that the appellant was the owner and financier of the confiscated gold. He further submitted that the statement of all the persons including the said Jitender Kumar Bhutani was recorded Under-Section 108 of the Customs Act and not under the provisions of the Gold (Control) Act and therefore the same cannot be relied upon. In answer, Smt. Nisha Chaturvedi, learned SDR supported the impugned order.
5. Before we discuss the merits of the case we would like to dispose of the contention of the learned counsel for the appellant that the statement recorded under the provisions of the Customs Act cannot be pressed into service in bringing home a charge against the appellant under the provisions of the Gold (Control) Act. From the record we observe that the statements were recorded by the Superintendent of Customs in connection with the seizure of gold in question. In such a situation, it does not stand to reason as to how one could argue with any justification under law that the statements so recorded by a competent officer at the time of seizure of gold cannot be made use of in the proceedings under the Gold (Control) Act. In this view of the matter we are supported by the decision of this Tribunal rendered in the case of Deenanath Rajaram v. Collector of Customs and Centra) Excise, Belgaum reported in 1986 (26) E.L.T. 135, wherein while repelling the same contention the Tribunal observed :-
"...The plea of the learned counsel that the statement recorded under the provisions of the Customs Act cannot be pressed into service in bringing home a charge against the appellant under the provisions of the Gold (Control) Act, is totally devoid of substance. Here is a case where the appellant has given a statement before the Superintendent of Central Excise. The statement has been recorded from the appellant in connection with the seizure of gold with foreign markings. In such a situation it does not stand to reason as to how one could argue with any justification under law that the statement recorded by a competent officer at the time of seizure of gold with foreign markings cannot be made use of either in the proceedings under the Customs Act or vice versa unless recorded under the relevant Sections of the respective enactments. The statement recorded by an officer under the provisions of the Customs Act or under the provisions of the Gold (Control) Act is admissible even if it is inculpatory in nature and confessional in character...."
6. On merits, Shri A.C. Jain, learned counsel for the appellant contended That except the bald retracted statement of the other (co-accused) person Jitender Kumar Bhutani, there is nothing on record to prove the ownership of the appellant in the confiscated gold. In the process of arguments he submitted that under Section 99 of the Gold (Control) Act, 1968, a person found in possession, custody or control of any primary gold, article or ornament shall be presumed, unless the contrary is proved, to be the owner thereof. Since according to him in the instant case admittedly four pieces of primary gold were recovered from the possession of the said Shri Jitender Kumar Bhutani, he (Shri Bhutani) shall be presumed to be :he owner thereof and there is nothing oh record from the side of the Revenue to prove the contrary. On the top of it, he submitted that during the adjudication proceedings the said Jitender Kumar Bhutani claimed the ownership of the gold in question. From the record we observed that in his earlier statement the said Jitender Kumar Bhutani (co-guilty and not before us) stated that the appellant gave him Rs. 1,03,000/- for the purchase of gold and that he purchased the gold from one Shiv Prakash Soni (co-guilty and not before us) through Shivji Soni and that he was carrying the seized gold to Sri Ganganagar to be delivered to the appellant. In his statement dated 15-7-83 the said Shiv Prakash Soni denied any acquaintance with the appellant. Likewise, Shri Ravinder Kumar at whose house the seized gold was said to have been delivered by Shivji Soni to Shri Jitender Kumar Bhutani also denied any acquaintance with the appellant. From the record we observe that immediately after the seizure of the gold in question on 13-7-83 the business premises of the appellant was also searched on 14-7-83. Statement was also recorded in which he denied any connection with the seized gold. From the record we also observe that in reply to the Show Cause Notice, the said Shri Jitender Kumar Bhutani claimed the ownership of the seized gold and had stated that on account of some grudge against the appellant for refusing to repay a certain sum of money which the appellant's father owed to him (Jitender Kumar Bhutani) he had earlier named the appellant as the person who had given the money for the purchase of the gold. From the record we also observe that the appellant in reply to the Show Cause Notice denied any connection with the seized gold and stated that on account of enmity the said Jitender Kumar Bhutani might have named him in his earlier statement. From the impugned order it is clear that the Department has not led any evidence to rebut the presumption which arises Under-Section 99 of the Gold (Control) Act and it appears from the impugned order that the Adjudicating Authority had recorded a finding to the effect that the appellant was the owner and financier of the confiscated gold as according to him the plea regarding the ownership set-forth by the said Jitender Kumar Bhutani was belated. It is settled law that for holding a person owner and financier of the confiscated gold in the fact of the denial of the ownership by the person concerned there must be at least some evidence to show that there was a collusion or conspiracy between the said person and the person from whose possession the gold was recovered. From the Show Cause Notice we find that no such allegation was made in the Show Cause Notice. In the Show Cause Notice (para 10) of the allegation against the appellant was that on 14-7-83 certain quantity of gold was recovered from his possession in violation of Section 8(1) of the Gold (Control) Act, 1968. But curiously enough in the Show Cause Notice the appellant was not called upon to show cause as to why the aforesaid gold seized from his shop on 14-7-83 se not confiscated. From the impugned order we also find that the said recovery of the gold from the shop of the appellant was not made the subject matter of the adjudicating proceedings. During the course of the arguments Shri A.C. Jain, learned counsel for the appellant clarified that the said recovery was made the subject matter of other proceedings, rom paragraph 11 of the Show Cause Notice we observe that the only dlegation against the appellant was that he financed the clandestine acquisition of the gold in question, that is to say, the gold seized from the said Shri Jitender Kumar Bhutani. Thus from the Show Cause Notice it is clear that it was not the case of the Department in the show cause notice that the appellant was the owner of the seized gold. So far as the question of financing of the seized gold in question is concerned, we find that here is nothing on record to show that the appellant financed the purchase of the gold in question except the retracted statement of the said Shri Jitender Kumar Bhutani. No corroborative evidence worth the salt is forthcoming on the record. On the contrary we find that immediately after the seizure of the gold in question on 13-7-83 the business premises of the appellant was raided but nothing incriminating connecting the alleged financing of the purchase of the gold in question was found. The statement of the appellant was also recorded on 14-7-83 itself in which he denied any connection with the seized gold. From the record it is clear that the statement of Shri Jitender Kumar Bhutani was also recorded on the following day, that is to say, on 15-7-83. But it is curious that while recording his statement he was not confronted with the statement of the appellant which was recorded on 14-7-83 drawing his attention towards the fact that the appellant had denied the alleged financing of the purchase of the gold in question. It is said that the telephone number of the appellant was also found with the said Shri Jitender Kumar Bhutani on 13-7-83 but curiously enough the investigating agency did not even think it proper to ask the said Jitender Kumar Bhutani to contact the appellant over the telephone to lend assurance to the credibility of the statement of Jitender Kumar Soni. It appears that no independent enquiry was ever made by the investigating agency to verify the earlier statement of Jitender Kumar Bhutani to the effect that the appellant gave him the money to purchase the gold. The fact that the said Shri Jitender Kumar Bhutani and the appellant were known to each other earlier loses its significance when, admittedly, both of them hail from the same place. The fact that there was some sort of grudge between Shri Jitender Kumar Bhutani and the appellant is not without any substance. Under these circumstances if Shri Jitender Kumar Bhutani had named the appellant in his earlier statements which were subsequently retracted, no capital can be made out in the absence of any corroboration from the independent source. Resides, in the peculiar facts and circumstances of the case it is incredible that the appellant would entrust such a huge amount that is to say, Rs. 1,03,000/- as alleged to the said Shri Jitender Kumar Bhutani, who was having some grudge against the appellant even though he was to get some commission as alleged. In these circumstances therefore we are not in a position to hold the appellant guilty for contravening the provisions of the Gold (Control) Act on the basis of the retracted statement of Shri Jitender Kumar Bhutani. Moreover, it appears that the seized gold was confiscated absolutely and the said Jitender Kumar Bhutani who had clearly admitted the ownership of the gold in question was also found guilty by the Adjudicating Authority. Similarly, we also find that Shri Shiv Prakash Soni, the alleged seller of the gold in question was also found guilty and punished accordingly by the Adjudicating Authority.
7. Before we part with the case we also find that the Adjudicating Authority by the impugned order also ordered for the cancellation of the gold dealer licence of the appellant. During the course of the arguments it was contended by Shri A.C. Jain, learned counsel for the appellant that in the Show Cause Notice cancellation of the gold dealer licence was neither proposed nor the appellant was called upon to show cause as to why the gold dealer licence be not cancelled. We find from the record that argument of the learned counsel for the appellant is well founded. Not only this the Gold (Control) Act, 1968 itself provides a complete machinery for the cancellation of gold dealers' licence. Section 50 of the Gold (Control) Act, 1968 is on the point. Section 50 expressly provides that the Gold Control Administrator is empowered to cancel or to suspend the gold dealer's licence under the circumstances mentioned therein. But proviso to Sub-section (1-A) of Section 50 expressly lays down that no licence shall be cancelled unless the holder thereof has been given a reasonable opportunity of showing cause against the proposed action. In the presence of the aforesaid express provisions of the law how the Adjudicating Authority had ordered for the cancellation of the licence is not understandable. Be that it may be, since we have held that no contravention of any provisions of the Gold (Control) Act, 1968 is proved against the appellant, it is not necessary for us to pause and dwell over the issue any further.
8. In the light of the foregoing discussions, we held that the Revenue has failed to prove the charge levelled against the appellant. Consequently, the appeal is allowed and the order imposing the personal penalty on the appellant and also cancelling his gold dealer licence as stated in the impugned order is set aside.