Calcutta High Court
Collector Of Customs (Preventive) vs Mahindra Chandra Dey on 28 February, 1996
Equivalent citations: 1997(57)ECC93, 1997(89)ELT478(CAL)
Author: Ruma Pal
Bench: Ruma Pal
JUDGMENT 1. On 20th April, 1985 the appellants say some of their Officers found the Respondent No. 1 in possession of two gold bars and one gold stick as well as some old and broken gold ornaments. The Respondent No. 1 is a dealer in gold ornaments. The recovery was alleged to have been made upon search of the person and the bag in the possession of the Respondent No. 1 at the business premises of one Prakash Yadav. The said Officers took the Respondent No. 1 to the Customs House where a confessional statement was made by the Respondent No. 1. 2. In the statement the Respondent No. 1 had first set out particulars of his family and himself as well as his business. The relevant extracts of the confessional statement are: "All the officers (affairs ?) of the shop are being locked after by myself only. Beside the shop I personally sometimes purchase and sell small amount of gold which I purchased from different broker and sell to different person on premium. Actually at present with the showroom in the present competitive market it becomes difficult to maintain the family. As an old man in the family and also, to keep up the image of the shop these type of un-official deals, I do not link with the shop. In fact my all the sons are against it. To day at about 8 A.M. in the morning one Nepali known broker came near Gariahat and handed over two gold bars with some inscription alone with a gold stick and told me the total weight as 257 gms. approximately. I know [M.C. Dey] this Nepali by face only. He is fair complexion, height about 5'-5" then built having a gold chain in neck, [aged] about 25 years, I do not know [his] name. I did not pay him any money. After selling the same as per arrangement he would come to me and leaving my profit I will have to pay him. On receipt of these gold I kept the same with me only. It was about 11 A.M. I was going inside the melting shop of Shri Prakash Yadav at 11 /A, Fern Road for adding some alloy to fetch extra profit as well as to find out the actual purity, as the purity of the gold bars was not told by that Nepali person. In fact this is the first time I am seeing such marks on the foreign gold bars. Still I have got some sort of suspicion about the purity of the gold, although, it was [marked] "9999". While I was enter (sic.) the melting shop for the purpose as said earlier (Sic), some custom officers intercepted me and search me. The Customs Officer recovered two gold bars as aforesaid, one gold stick and a quantity of broken pieces of old ornaments. The Customs Officers asked me about the papers for its legal acquisition, possession and or importation and I failed to produce the same, I did not have any papers for the same. This Nepali person as far as I know a carrier normally comes from Nepal side and he did not give any papers. The broken pieces of old ornaments are the old [broken] ornaments of my wife Smt. Alokana Devi and I was taking to the melting shop for melting and for making some new ornaments out of it for my unsuring (Sic) eldest son Shree [M.C. Dey] Ananda Marriage talk was going on not yet settled. This has got nothing to do with my shop's account as this belongs to my wife only and to be gifted for marriage. I know to deal in gold [is] an offence under Gold (Control) Act, but I am constrained to do such things as my shop is not giving much profit. ... Now I understand that I have done a mistake and beg to be excused. I have hone through the above statement and this has been correctly recorded as stated by me. These statements are absolutely true. These have been recorded by the Custom Office as per my Requesting." 3. The corrections in the confessional statement as well as the endorsement below the statement were in the hand-writing of the Respondent No. 1. 4. The Respondent No. 1 was thereafter arrested and taken to the Hare Street Police Station where he spent the night. The next day he was produced before the Sub-divisional Judicial Magistrate at Alipore and was enlarged on bail. The Surety bond could not be arranged on that day as it was a Sunday. It was executed [on] the next day. The Respondent No. 1 was released on 22nd April, 1985 after the execution of the bond. On 25th April, 1985 the Respondent No. 1 filed an affidavit before the Magistrate at Alipore seeking to retract the confession. It was alleged in the affidavit that the statement was the outcome of coercion, threat and mental torture. 5. On 11th October, 1985 the Assistant Collector of Customs (Preventive) issued a show cause notice to Prakash Yadav, the Respondent No. 1 herein and Vijoy Kumar Shreshta. The show cause notice detailed the fact relating to the enquiry against all three. Having set out the facts the show cause notice noted that importation of gold was prohibited under Section 13(1) of the Foreign Exchange Regulation Act, 1973 read with Section 67 of the Act. Reference was also made to Section 123 of the Customs Act, which casts the burden of proof on the person in whose possession gold is seized in the reasonable belief that it is smuggled to prove that it was not smuggled. It was further stated that no documents had been submitted by any of the parties relating to the importation, acquisition or possession of the gold and that there was prima facie reason therefore to believe that the same was smuggled and liable to confiscation under Section 111(d) of the Customs Act. The further allegation was that: "The said parties who acquired possession of the goods under seizure and were concerned in keeping, concealing, harbouring and dealing in the same knowing or having reasons to believe that the goods are liable to confiscation under Section 111 of Customs Act, 1962 have made them liable to penal [action] under Section 112 of the said Act." 6. The three persons including Respondent No. 1 were accordingly directed to show cause why the goods seized should not be confiscated under Section 111(d) and why penal action should not be taken against them under Section 112 of the Customs Act, 1962. 7. An answer to the show cause was given by the Respondent No. 1. The substance of the answer was to challenge the confessional statement. 8. The matter was heard by the Collector of Customs (Preventive) the Appellant No. 1 herein. The Collector noted that at the time of the search the Respondent No. 1 had made a full confession and had admitted dealing in smuggled gold including the incident in question. The argument of the Respondent No. l's Advocate before the Collector was also directed at negating the confessional statement. It was contended that it was highly unlikely that anyone would make such a self incriminatory confession. The Collector considered the submissions in connection with each of the three persons charged separately and in detail, both in facts and in law. Several decisions which had been cited before him by Advocates of the persons charged were also considered. 9. As far as the Respondent No. 1 is concerned, the Collector rejected the argument of the Respondent No. l's Advocate and found that the statement was in fact voluntarily made. Apart from the statement the Collector also noted that the seizure list which had been signed by the Respondent No. 1 and two independent witnesses also indicated that the gold had been found upon search of the Respondent No. 1. 10. The Collector concluded that the show cause notices had been correctly issued under the Customs Act and the Gold (Control) Act and that taking all the facts into consideration he ordered the confiscation of the gold bars and stick as well as the foreign currency seized from Prakash Yadav.Personal penalty was imposed on the Respondent No. 1 and Prakash Yadav of Rs. 10,000/- and Rs. 200/- (each) respectively under Section 112 of the Customs Act, 1962. 11. By a separate order a penalty of Rs. 1,000/- was imposed on the Respondent No. 1 under Section 74 of the Gold (Control) Act. 12. Being aggrieved with both these orders two appeals were preferred by the Respondent No. 1 before the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). Before the CEGAT the submission again was that the Respondent No. l's confessional statement had been taken under threat and duress and after prolonged detention, and as such, the same was inadmissible. The CEGAT formulated the following five points for decision: "(i) Whether the confessional statement of the appellant is obtained under threat or coercion or whether it is voluntary and is admissible against him. (ii) Whether the seizure panchanama cannot be acted upon as being contrary to the provisions [of] Section 103 Cr. P.C. and is thus vitiated and whether the same is to be disbelieved. (iii) Whether the statement of the co-accused Prakash Yadav can be taken into consideration a corroborating piece of evidence against the appellant! (iv) Whether the imposition of penalty against the appellant under the Customs Act, 1962 and the Gold (Control) Act, 1968 are in accordance with law. (v) What order." 13. As far as Point No. 1 was concerned the CEGAT went into the evidence in great detail. It was noted that there was no sign of physical violence on the Respondent No. 1 nor was the same alleged before any authority. It was also found that the Respondent No. 1 was an educated person and had recorded in his own note in English below his statement that the same was correctly recorded. Corrections and additions had also been made by the Respondent No. 1 which showed that the statement had been read over to the Respondent No. 1 after it was written. An endorsement to that effect was also made in writing by the Respondent No. 1. The Respondent No. 1 had argued that he was a heart patient. The Tribunal commented on the fact that if this was true there was no reason why he had waited for over two days after his release before obtaining treatment and that it was a "futile attempt on his part to explain this detail in retracting the confession". The CEGAT also noted the fact that the Respondent No. 1 had two sons and one daughter. Considering the circumstances in great detail the CEGAT came to the conclusion that the retraction was only an after thought. The CEGAT said that there were no circumstances made out in the case to hold that the statement of the Respondent No. 1 was not a voluntary one and it saw no reason to take a different view from that taken by the adjudicating authority with regard to the statement. 14. As far as Point No. 2 is concerned the CEGAT found that the seizure list had been signed by the search witnesses as well as by the appellant and that there was no whisper in the affidavit filed by the Respondent No. 1 retracting his confession that he was forced to sign the seizure list. The seizure list showed that the appellant was in possession of two gold bars and one gold stick together with the gold ornaments. 15. As far as Point No. 3 was concerned, the CEGAT noted that Prakash Yadav's statement could be relied upon. It was noted that the Respondent No. 1 had not alleged that Prakash Yadav had any motive to implicate him nor was it suggested that Prakash Yadav was unreliable. It was noted that Prakash Yadav had not been charged with carrying contraband gold and therefore strictly speaking he could not be stated to be a person who had participated in the offence with which the Respondent No. 1 was charged. As such his evidence was not that of a approver or that of a co-accused in the strict sense of the term. In any event, it was fond that the statement of Prakash Yadav implicating the Respondent No. 1 was corroborated by the voluntary statement of the Respondent No. 1 and also the seizure list. 16. As the argument before us on behalf of the Respondent No. 1 was primarily based on the language used by the CEGAT in dealing with Point No. 4, the language is quoted verbatim :- "As far as Point No. 4 is concerned it is clear from the voluntary statement of appellant dated 20-4-1985 that the contraband gold in question is found in his possession at 11 A.M. on 20-4-1985 while he entered the shop of Prakash Yadav. This is further corroborated by the seizure list which is witnessed and signed by the search witnesses as well as by the appellant himself. It is further corroborated by the statement of Prakash Yadav and therefore this fact is conclusively proved. Importation of gold except with general or special per- mission of Reserve Bank of India is prohibited under Section 13(1) of FERA, 1973 read with Section 67 of the Act. This gold was seized by the Officers of Customs under Section 123 of the Customs Act on a reasonable belief that they were smuggled into India and the burden is not discharged by appellant to prove otherwise. This gold being liable for confiscation under Section 110 of the Customs Act the appellant was rightly imposed with penalty as per Section 112(B) of the Customs Act, 1962. The appellant was found in possession of primary gold of purity of 99% had contravened Section 8(1) of the Gold (Control) Act making it liable for confiscation under Section 71(1) of the said Act and he was rightly imposed with the penalty of Rs. 1,000/- under Section 74 of the Gold (Control) Act. But we may observe that the appellant was penalised very leniently in both courts and Point No. 4 is answered accordingly." 17. The CEGAT concluded by upholding the findings and conclusion and the imposition of penalties under the order passed by the Collector and dismissed the appeals. 17A. The Respondent No. 1 then filed a writ application challenging the order of the CEGAT. Several grounds were taken almost all of which pertain to the manner in which the CEGAT had dealt with the evidence. 18. The writ application was disposed of on 12th September, 1991. The Learned Trial Judge stated that the order of the Collector as well as the order of the CEGAT had proceeded on the basis of the acceptance of the confessional statement made by the writ petitioner. The Learned Trial Judge came to the view that both authorities had adopted a wrong legal approach with regard to the confessional statement and that their decision was vitiated by consideration of irrelevant matters as well as by non-consideration of matters which were relevant. It was also held that the CEGAT should have enquired into the state of mind of the writ petitioner at the time of making of the statement. The Learned Trial Judge also commented on the reliance placed by the CEGAT on the delay, and the relevance of blood pressure to the conclusion whether the Respondent No. 1 was a heart patient. The Learned Trial Judge was of the view that the statement had been made by the Respondent No. 1 writ petitioner while he was tinder arrest or at least while the writ petitioner was labouring under the impression of being under arrest. The lack of signs of physical violence was stated to be irrelevant. The Learned Judge held that the principles relating to confession in the presence of Police Officers was equally applicable to all authorities taking confessional statements. The Learned Judge was of the view that the order of the Collector was even less satisfactory than the order of the CEGAT. He came to the conclusion that both these orders were vitiated and the writ application was allowed. 19. The Learned Single Judge appears to have gone into the question as to the weight of the evidence before the departmental authorities and has approached the matter as if the impugned decisions of the departmental authorities were the subject matter of an appeal. It is well settled that under Article 226 judicial review is directed not against the decision but it is confined to the examination of the decision making processes (See : State of U.P. v. Dharmender Prasad Singh : ). The Learned Judge has not held that there was no evidence before the CEGAT or that the CEGAT's decision was one which was so manifestly unreasonable or that no reasonable authority, entrusted with the power in question could reasonably have made such a decision. The decision-making process made by the Tribunal was correct. It was not open to the Court under Article 226 to re-decide the question on the basis of the evidence adduced and substitute its own conclusion for that of the CEGAT. 20. The findings of the Collector and the CEGAT cannot be said to be patently wrong nor could they be said to be based on no evidence or inadmissible evidence. Each and every observation of the Tribunal is not be scrutinised. The order is to be read as a whole and even if it is found that the CEGAT has based its findings on several grounds some of which may be irrelevant, the order will still be sustained as it cannot be said that even if the factors found by the Learned Single Judge to be irrelevant or erroneous were ignored this would have affected the ultimate decision of the CEGAT. As stated repeatedly by the Supreme Court: "An error of law which is apparent from the record can be corrected by a writ but not an error of fact, however great it may appear to be (Syed Yakub : ; Swaran Singh v. State of Punjab : ." 21. Again in Mukunda Bore v. Bangshidhar Buragohain and Ors. : the Supreme Court emphasised that: "Under Article 226 of the Constitution, a finding of fact of a domestic tribunal cannot be interfered with. The High Court in the exercise of its special jurisdiction does not act as a Court of appeal. It interferes only when there is a jurisdictional error apparent on the fact of the record committed by the domestic tribunal. It is true that a finding based on no evidence or purely on surmises and conjectures or which is manifestly against the basic principles of natural justice, may be said to suffer from an error of law." 22. In addition to this is the finding by the Learned Single Judge that the confessional statement had been rendered inadmissible because it was made when the Respondent No. 1 was under arrest or at least when the Respondent No. 1 was under the impression that he was under arrest. 23. The Respondent No. 1 had been summoned to give evidence under Section 108 of the Customs Act. At that stage an enquiry was being held only to find out whether an offence had been committed. At that stage, the Respondent No. 1 was neither accused of any offence nor was the proceeding a (judicial one) and the principles relating to the inadmissibility of confessions under the Criminal Procedure Code are not applicable to confessional statement made pursuant to interrogations by Customs Officers under Section 108 of the Customs Act, 1962 (See H.M. Advani v. State of Maharashtra : ; also Ramesh Chandra Mehta v. State of West Bengal: ). 24. It is also well established that a customs officer is not a police officer nor can a summons issued for interrogation be termed as an arrest. The Learned Judge said: "Now, the fact of taking somebody with the officers is a fact which, without anything more, shows a deprivation of liberty. That is nothing but arrest. It was not noted anywhere by the Tribunal that the appellant accompanies the Customs Officers voluntarily of his own accord to the Customs House. It is also a matter of admitted fact that the writ petitioner signed the confessional statement while being in the Customs House. Nobody stays in the Customs House of his own accord, if he has a pace-maker inside his chest and is permitted to go home and is told that he can go home without signing the confessional statement, if he so chooses. There is no material on record to show that the writ petitioner was told by any of the Officers that the writ petitioner was free to go home, if he so chooses. If the onus of proving the confessional statement to be voluntary is upon the Customs Authorities, then it was part of the duty of the Customs Officers to bring sufficient materials on record to show that the writ petitioner remained in the Customs House until signing of the confessional statement of his own accord, in spite of a choice of leaving the Customs House being put before him. Under these circumstances, the Tribunal committed an error apparent on the face of the record in not concluding that the appellant was under arrest." 25. It was not the Respondent No. l's case at any stage that he had been deprived of his personal liberty when he recorded the confessional statement. It is something which he should have alleged and established. There is in fact no evidence that the Respondent No. 1 was under any restraint placed on him by the Customs Authorities. The Respondent No. 1 could not be said to have been under arrest. The Full Bench decision of the Madras High Court in Roshan Beevi v. Joint Secretary, Government of Tamil Nadu : 1984 Cr. L.J. 134 is very instructive in the matter. The Full Bench was called upon to consider whether a confessional statement made before the Customs Authorities could be relied upon for the purpose of passing an order under the Act. It was said : "In a proceeding under the provisions of the Customs Act, when any person is required or summoned for an enquiry under Section 107 or Section 108, that person is not an accused person and the officer summoning that person is not a police officer. Any confession made by a person summoned under Section 107 or Section 108 before the Customs Officer is admissible in law since it is not hit either by Section 25 or Section 26 of the Evidence Act. If it is shown in a given case that such a confession was obtained by the Customs Officer by exertion of inducement, threat, coercion or duress or extracted by illegally detaining the person in an unauthorised prolonged custody in contravention of the provisions of the Customs Act, or obtained by using third degree methods, then the question about the acceptability and reliability of such involuntary confessions would arise." 26. The Supreme Court approved the decision of the Full Bench in Directorate of Enforcement v. Deepak Mahajan : . 27. For all these reasons, we would have allowed the appeal. 28. It is difficult to sustain the order under appeal. The Learned Trial judge in our view in fact reappraised the evidence. This he could not do. Indeed no argument was advanced by Counsel for the Respondent No. 1 in support of the order except to say that he had nothing further to add to what had been recorded in the judgment under appeal. 29. But a new and the only point argued before us on behalf of the respondents in support of the decision of the Trial Court was one which was not argued either before the Collector, the Tribunal or the Learned Single Judge. The point as canvassed is that under Section 112(b) of the Customs Act, 1962 it was incumbent on the department to establish and for the adjudicating authority to come to a conclusion that the Respondent No. 1 knew or had reason to believe that the gold was confiscatable. There was, in this case, no finding by either the Collector or the Tribunal of such knowledge and according to the Respondent No. 1 the decisions could not be sustained for that reason. 30. We are of the view that this argument of the Respondent No. 1 could hot be raised for the first time in appeal. The question is a mixed one of fact and law. An adequate basis for the same should have been laid in the writ petition itself. The ground sought to be relied upon by the Respondent No. 1 in this connection does not in our view amount to such a challenge. The ground reads: "Further and in any event the respondent No. 1 should Have appreciated that the Respondent No. 2 had given no reason in its said purported order for imposition of penalty under Section 112 of the said Act upon the petitioner. The Respondent No. 1 should have held that the said purported order of the Respondent No. 2 in so far as the same purported to impose a penalty upon the petitioner by a non-speaking order was erroneous on the face of it and thus illegal, null and void and no penalty can be demanded and/or realised from the petitioner in terms thereof or thereunder. The purported finding of the Respondent No. 1 to the contrary is wholly erroneous, arbitrary to the core and perverse." 31. Nevertheless, since arguments have been advanced at length relating to the failure of the Collector to consider or arrive at a finding of knowledge of the Respondent No. 1 as to the confiscatability of the goods, we have thought fit to give our decision on the argument. 32. Section 111(d) of the Act provides for the confiscation of any goods which are imported or attempted to be imported or brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under the Customs Act or any other law for the time being in force. 33. Section 112 in so far as it is relevant provides : "Section 112. Penalty for importation of goods, etc. - Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111. shall be liable, - (i) in this case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding five times the value of the goods or one thousand rupees, whichever is greater; (ii) xxxxxxxxxxxxxxxxxxxxx (iii) xxxxxxxxxxxxxxxxxxxx (iv) xxxxxxxxxxxxxxxxxxxxx (v) xxxxxxxxxxxxxxxxxxxx." 34. It is not in dispute that the goods were confiscatable under Section 111(d). It is also not in dispute that the seizure of the goods was in no way vitiated. Section 123 of the Act casts the burden of proof on the person from whose possession goods are seized to show that they are not smuggled. By virtue of Section 123(2) this section has been expressly made applicable to gold and manufacturers thereof. Indeed it has been noted even by the Learned Single Judge that the writ petitioner was not seeking to challenge the confiscation of the goods. 35. The next question is whether the writ petitioner knew or had reason to believe the goods were contraband and whether the authorities had come to any finding in this regard. The Respondent No. 1 has relied upon 4 decisions in this context, namely, Charandas v. Collector of Customs : ; Khandelwal Metal & Engg. v. Union of India: 1983 (12) E.L.T. 295/302; Gian Chand v. State of Punjab and Hindusthan Steel Ltd. v. State of Orissa . 36. In this case the confessional statement itself amounted to an admission of the offence. 37. The question of knowledge was dependent, therefore, on the acceptance of the confession before the authorities concerned. Where the offence is admitted it is not necessary for the adjudicating authority to separately come to a finding thereon. The only question before the authority would be whether in fact such an admission was made. This issue was squarely addressed by the authorities and decided upon. And it was this admission which was challenged before the authorities as well as before the Learned Single Judge. We are accordingly satisfied that the decision of the authorities must be upheld in the facts and circumstances of the case. 38. We, therefore, allow the appeal and set aside the order of the Learned Single Judge. There will be no order to costs. 39. All parties to act on a signed copy of the operative part of this order on usual undertaking. Sujit Kumar Sinha, J.
40.I agree.