Gujarat High Court
Ishwarlal vs Commissioner on 1 July, 2011
Author: Akil Kureshi
Bench: Akil Kureshi
Gujarat High Court Case Information System
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TAXAP/2084/2010 9/ 9 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 2084 of 2010
With
CIVIL
APPLICATION No. 434 of 2010
In
TAX
APPEAL No. 2084 of 2010
For
Approval and Signature:
HONOURABLE
MR.JUSTICE AKIL KURESHI
HONOURABLE
MS JUSTICE SONIA GOKANI
=================================================
ISHWARLAL
NARBHERAM SONI - Appellant(s)
Versus
COMMISSIONER
OF CUSTOMS (PREVENTIVE) - Opponent(s)
=================================================
Appearance
:
MR
DHAVAL D VYAS for Appellant(s) : 1,
None for Opponent(s) :
1,
=================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 1/07/2011
CAV
JUDGMENT
(Per : HONOURABLE MS JUSTICE SONIA GOKANI)
1. The appellant herein, by way of the present appeal under Section 130 of the Customs Act, (hereinafter referred to as the Customs Act) has challenged the order of Commissioner of Customs (Preventive) dated 4.12.2007 directing the confiscation of gold bars weighing 2254.750 grams valued at Rs.7,18,857/- under the provision of Section 111 read with Section 120 of the Customs Act and also imposing penalty under Section 112(B) of the Act.
2. The brief facts would be necessary to understand the issues that have been raised in the present appeal.
2.1 The Police Sub-Inspector of Jamnagar seized five boxes containing 2514.75 grams of smuggled gold valued at Rs.7,97,731/- from goldsmiths of Jamnagar and Bhuj exercising his powers under Section 102 of the Code of Criminal Procedure. The said action was taken pursuant to the information received by D.S.P, Jamnagar that two persons, namely, Shri Abbas Jaku Bhaya and Shri Talab Siddik Sanghar had smuggled gold ornaments from Dubai (Malgoi) and brought to Salaya in a vessel in the month of December, 1993.
This was handed over to Customs Department on 11.4.1994 for initiating the actions under the provisions of the Customs Act.
3. As the said bars were detained from the persons not having import documents, a reasonable belief was formed that the same were smuggled gold ornaments liable for confiscation and accordingly the same were seized under the provisions of the Customs Act. The statements of suspects Shri Talab Siddik Sanghar and Abbas Jaku Bhaya had been recorded on 12.4.1994 under Section 108 of the Customs Act before the Superintendence of Customs (PI), Jamnagar, where it had been stated that they had stolen the gold ornaments and smuggled the same into India. The statements of following persons were recorded under Section 108 of the Act in connection with these gold ornaments:-
1. Shri Ashwin Mohanlal Soni
2. Shri Chandrakant Harilal Varia
3. Shri Hasmukhlal Hansraj Gusani
4. Smt. Karimaben Suleman Sanghar
5. Shri Mukundlal Harilal Patadia
6. Shri Ishwarlal Narbheram Soni
4. The present appellant Shri Ishwarlal Narbheram Soni whose statement had been recorded on 3.5.1994, wherein he stated that the said gold ornaments had been purchased by him weighing 1254.450 grams from one Wagher having boyish look for an amount of Rs.4,84,500/- and he converted the same into gold bar weighing 1254.450 grams which was seized by the police on 5.4.1994. As the challenge to the act of the Customs Officer in connection with the confiscation and the penalty, is made by the present appellant, elaboration of the statements made by others is not done at this stage. What further emerges from the record is that after the issuance of the show cause notice and completion of the adjudication, the Commissioner vide its order dated 4.12.2007 confiscated the goods and imposed penalty.
5. Being aggrieved by the same, the appeal was preferred before the Tribunal, which had remanded back the matter to the Commissioner with certain observations where once again all the contending parties were heard and the Commissioner confiscated five gold bars and also imposed penalties on all the four of them. This was then further challenged before the Tribunal. The Tribunal vide its order dated 23.11.2009 had confirmed the order of confiscation passed by the Commissioner by holding that the five gold bars were smuggled goods, which were smuggled into India in contravention of the provisions of the Customs Act and accordingly were liable for confiscation under Section 111(d), 111(e) and 111(i) read with Section 120(1) of the Customs Act. As the entire gold was absolutely confiscated, the Tribunal had reduced the penalty. However, holding categorically that all the persons including present appellant had intention to make some profit out of the said deal, therefore, even with the complete knowledge of the same being smuggled goods, they had purchased the same.
Penalty imposed under Section 112 of the Act on the present appellant is to the tune of Rs.2,00,000/-.
6. Impugned order of confiscation as well as that of penalty is under challenge before this Court where learned advocate Mr. D.D.Vyas appearing for the appellant has emphatically and vehemently made his submissions in this regard. It is argued, at the outset, by learned advocate for the appellant that initially there was a seizure by the respondent authorities under Section 102 of the Code of Criminal Procedure and subsequently the gold had been handed over by the Police Inspector to the Customs Department on 11.4.1994 for initiating actions under the Customs Act. He, therefore, had contended that this was not a seizure under Section 110 of the Customs Act as under Section 110, proper officer has to have " reason to believe" if any goods are liable to confiscation under the Act, which according to him is absent here. It is further argued that only in the event of seizure under Section 110 that the provision of Section 123 would be attracted where the onus of burden shifts on the person from whom the seizure is made to establish that the goods seized are not smuggled goods otherwise, burden continues on prosecuting agency.
He relied heavily upon the judgment of the Apex Court in the case of Gian Chand and others vs. State of Punjab reported in AIR 1962 SC 496, where the Apex Court has discussed at length the provision of Customs Act and particularly Section 178(A) by holding that the expression " seized" in the context of Section 178 would mean taking possession, contrary to the wishes of the owner of the property. It has also held that where a delivery is effected by an owner in pursuance of the demand under the legal right whether oral or by a warrant , it will be a seizure of the Court. Accordingly, the learned advocate has drawn a distinction between the seizure under the Sea Customs Act and the seizure under the provision of other laws. He emphasized further that in the event of a seizure under the Customs Act only, the onus will be shifted, in respect of proof of a particular commodity seized, on a person from whose possession the same was taken and not otherwise.
Learned advocate also sought to place reliance on the judgment in the case of Union Bank of India vs. Adulkadar Abdulgani Hasmani and others reported in 1986 G.L.H. 371. Following the decision of the Apex Court given in the case of Gian Chand and others vs. State of Punjab (supra), the Gujarat High Court has held in Union Bank of India vs. Adulkadar Abdulgani Hasmani and others(supra) that before a presumption can be raised that the goods in question were foreign goods, the seizure must be under the Customs Act by properly authorized Customs Officer. Further reliance is also placed by the learned advocate on the decision of the Apex Court in the case of Noor Aga vs. State of Punjab and anr. reported in AIR 2009(SC) (Supp)
852. It was held herein that exclusive reliance on the statement recorded under Section 108 of the Customs Act was a fundamental error in a prosecution under the NDPS Act.
It was argued further on the facts that the present appellant had filed three affidavits of his family members and that of his own to state that the gold belonged to his wife and two daughter-in-laws. He also presented three bills to the Commissioner before retracting his earlier statement given to the officer. Learned advocate also urged to this Court that the statement recorded under duress, once retracted, no reliance can be placed thereon and any adjudication based on such a statement would amount to committing a fundamental error.
7. On duly considering the submissions of the learned advocate and on closely scrutinizing the facts along with the judgments of both the Commissioner and that of the Tribunal , for the reasons to be followed hereinafter, the appeal deserves dismissal.
7.1 What culls out from the record is that on the basis of the information received by the D.S.P,Jamnagar the action was initiated under Section 102 of the Code of Criminal Procedure by the Inspector of Police confiscating five boxes containing 2514.750 grams of 16 to 18 carats pure gold valued at Rs.7,97,731/-.
7.2 As two persons Shri Abbas Jaku Bhaya and Shri Talab Siddik Sanghar were said to be the persons behind these smuggled goods and they were also found to have disposed of the same to different persons, they were handed over to the Customs Department. The goods were also handed over to the Customs Department by the Police Inspector on 11.4.1994 for taking action under the provision of Customs Act. On considering merit in the documents, the proper officer had confirmed a reasonable belief of the gold bars being the smuggled gold ornaments and, therefore, they were seized under the Customs Act. What is further emerging from the record is that the statements of both the aforementioned persons (smugglers) were recorded under Section 108 and on the basis of the details provided by them, show cause notices were also issued to others. The persons, who have been named hereinbefore, also include present appellant giving statement under Section 108 and on oath he accepted that he purchased the seized gold bars knowing the fact that the same were the smuggled gold and later on, he retracted the same stating that he has converted the ornaments after getting the ornaments of his wife and daughter-in-law who also gave their ornaments to uphold prestige of the family.
7.3 The issue of course has been raised by the learned advocate making a distinction between the seizure under Section 110 of the Customs Act and the seizure under other laws. With regard to seizure under the laws other than the Sea Customs Act, onus would be on the department to establish connection with the seized goods. However, in the event of seizure under Section 110 of the Customs Act, the onus of proof will be shifted on the person from whose possession the particular commodity is seized. In other words, if the provisions of Section 110 are satisfied where the proper officer would have a reason to believe that goods are liable to confiscation and is satisfied that the goods seized can be presumed to be smuggled goods and he seizes the goods, then the burden of proving otherwise would be on the person from whom the same were seized.
This view is also followed with a further emphasis in the decision of the Gujarat High Court in the case of Union Bank of India vs. Adulkadar Abdulgani Hasmani (supra).
Although this is an interesting question of law that has been raised, it would be pertinent to mention at this stage that the order under challenge is not concerning prosecution of the appellant nor is the question concluded solely on the basis of statements recorded under Section 108 of the Customs Act. Again, reference also needs to be made of the fact that once the police officer handed over the seized goods to the Customs Department, it was deciding the aspect of confiscation of the smuggled goods brought in the country in contravention of provisions of the Customs Act and, therefore, in the present proceedings issue raised need not be decided by this Court. Statements under Section 108 of the Customs Act have been recorded of both the persons namely, Shri Abbas Jaku Bhaya and Shri Talab Siddik Sanghar, who were proved to have been smuggled the gold into India and also statements of all those persons, who had purchased the said commodity. And, these statements were recorded under Section 108 soon after the gold bars had been handed over to the Customs department for taking actions. What clearly and unequivocally gets established from the record is that there is an overwhelming evidence before the adjudicating authorities to establish that the commodities seized were smuggled and the said gold had been sold to different persons, who had purchased them with full knowledge and not these statements alone.
8. Before the Customs authorities, the question was not that of prosecution, it was to decide the aspect of confiscation. Again, exclusive reliance was placed on the statement of the accused in the case of Noor Aga(supra), which is of no help to the appellant for there being no exclusive or excessive reliance on the statements recorded under Section 108 of the Customs Act for determining the question of confiscation. In the very same judgment, the mention is also made of the use of retracted confessional statement of the person recorded under Section 108 of the Act provided the same is made voluntarily and the burden of proof with regard to such confession being voluntary would be, of course, on the prosecution. The Court has also noted from its earlier decision of Gian Chand and others vs. State of Punjab (supra) saying that by no stretch of imagination a Customs Officer is a police officer and he does not become one merely because his powers are similar to that of police officer. This Court is also not required to further delve into that aspect, at this stage, as the statements recorded of the present appellant and those of others even when retracted later on by filing the affidavit, would not take away the very edifice of the case of the department as discussed elaborately and extensively in the orders of the Commissioner and the Tribunal where facts get established on the basis of the documentary evidence made available to the adjudicating authorities. Thus, both the authorities below have based their opinions and findings on all these facts cumulatively to arrive at a conclusion that the gold seized was the smuggled goods liable to be confiscated for having been smuggled in contravention of the provisions of the Customs Act and those who purchased the gold, including the present appellant, did so with an intention to make profit knowing fully well that the same were smuggled. Difference in the purity of gold, anomaly found in the bills produced by all those persons at the time of retracting the statements made in their affidavits and positive evidence presented before the department in the form of total matching quality of the goods seized, cumulatively led these authorities and particularly the Tribunal to arrive at such a conclusion. This Court sees no reason to interfere with the said order which is well reasoned and appeases the logic.
9. It is also needed to be mentioned that the amount of penalty in the instant case is very less and the additional reason why this calls for no interference is also a meager amount of penalty and the same would not require any interference in the wake of the seizure of the gold bars.
10. In this premise, the appeal of the present appellant having no merits deserves dismissal. Accordingly, Appeal is dismissed.
CIVIL APPLICATION No. 434 of 2010 In TAX APPEAL No. 2084 of 2010 In view of the order passed in Appeal, no orders in Civil Application. Accordingly, Civil Application stands disposed of.
(Akil Kureshi, J. ) (Ms. Sonia Gokani, J. ) sudhir Top