JUDGMENT
1. The above captioned appeals have been directed against the Order-in-Original dated 18.9.2001 vide which the Commissioner of Customs has ordered absolute confiscation of the seized in dian currency of Rs. 15,00,000 under Section 121 of the Customs Act and imposed penalty of Rs. 3,00,000 on appellants Nos. 1 to 3, of Rs. 4,00,000 on appellant No. 4 and of Rs. 1,00,000 on appellant No. 5.
2. On 8.9.98, acting on the prior in formation, the officers of Customs Range, Churu, in tercepted Jeep No. RJ-23-C-2736 near village Khotla, on Fatehpur Churu Road, while coming towards Churu. The said jeep was being driven at that time by Usman Khan, appellant and two other persons who disclosed their names as Ayub Khan and Ashan Khan, were found sitting by his side. The jeep was brought to the office of the Customs Range and through search of the jeep was conducted in the presence of two in dependent witnesses. On lifting cushion of the passenger seat, ten packets of in dian currency notes containing Rs. 5,000 were recovered. Thereafter, on further checking, Rs. 15,00,000 more were recovered from the jeep. Usman Khan, appellant when enquired about this currency, disclosed that it was given to him by his brother Liyakat Khan (appellant) who had collected the said money by selling foreign marked gold biscuits. He further disclosed that this amount was to be given by him to Rajindra Gujar, appellant, as directed to him by his brother Liyakat. He, however, could not disclose or produce any document about the legal importation of gold biscuits, sold by his brother Liyakat Khan. On a reasonable belief that recovered in dian currency was acquired from the sale of smuggled gold and was liable to be confiscated, the same was seized under Section 110 of the Customs Act, with a proper panchnama drawn on the spot, attested by Hukam Chand Gaur. The jeep was also seized. Liyakat Khan, appellant was also examined on 8.9.98 and he, in his statement, disclosed that on reaching the customs office he came to know about the recovery of Rs. 15,00,000 from his brother Usman Khan. He also admitted that his brother was in volved in smuggling activity. He, however, denied his business relations with his brother. He also disclosed that seized jeep was purchased by his brother Usman Khan from one Mahavir Lamba. The residential premises of Liyakat
Khan and Usman Khan, appellants were also searched, but no in criminating article was found. However, from the residential premises of Rajendra Gujar, appellant, three letters sent from Saudi Arabia were recovered and from those letters, it appeared that he was also, in volved in smuggling of goods. Similarly, from the premises of Kailash Khandelwal, appellant, certain in criminating documents, such as diary, unsolved papers, blank envelope, cheques etc. were recovered. Rajindra Gujar, appellant also, in his statement, disclosed that he remained in Saudi Arabia for 18 years and on coming to in dia, he contracted Shri Khushi Mohd and Farid who were doing hawala business and who advised him to contact Usman Khan, appellant and thereafter, he contacted him. He further disclosed that Khushi Mohd told him that Kailash Khandelwal, appellant would sell the gold and would deliver the sale proceeds to Usman Khan.
3. During the course of in vestigation, the statements of Khushi Mohd. And Farid were also recorded. On completion of in vestigation, the present appellants were served with show cause notice for confiscation of the seized in dian currency of Rs. 15,00,000 and for imposition of penalty on him. They contested that notice by denying their in volvement in the smuggling of the gold. Liyakat Khan, appellant also claimed money by alleging that out of this Rs. 10,00,000 represented the sale of 85 foreign marked gold biscuits duly imported by him, on payment of customs duty and Rs. 5,00,000 were withdrawn by him from NRI account of Ibrahim Khan with the bank of Baroda. He also disclosed the name of persons to whom he sold the gold.
4. The Commissioner of Customs, however, did not accept this version and passed the impugned order.
5. The learned counsel for the appellants Nos. 1 to 3 has contended that in itial burden of proving that seized in dian currency, was the sale proceeds of the foreign marked gold biscuits, was on the customs authorities, but they have failed to discharge the same and as such, the money could not be confiscated, He has also contended that seized in dian currency belonged to Liyakat Khan, appellant, as he sold the gold biscuits duly imported by him, for Rs. 10,00,000 and remaining Rs. 5,00,000 were withdrawn by him from the bank. Therefore, neither currency could be confiscated nor any penalty could be imposed, on any of these appellants, But we are unable to accept this contention of the Counsel. The bare perusal of the record shows that the statements of Usman Khan and Liyakat Khan, appellants, were recorded. In the statement recorded on 8.9.98, Usman Khan nowhere disclosed that seized money was the sale proceeds of the gold brought by his brother Liyakat from abroad. He also did not state any word about the withdrawal of any part of the seized money by his brother Liyakat Khan, from the bank. Similarly, Liyakat Khan, appellant in his statement, nowhere stated that he brought the foreign marked gold biscuits from abroad, on payment of duty and sold 85 gold biscuits in the market and that Rs. 10,00,000 were earned by him out of that sale. He also did not state that Rs. 5,00,000 were withdrawn by him from the bank from NRI account. Rather both these appellants in their respective statements, admitted that Khushi Mohd. And Farid who were residing in Saudi Arabia, collected money from the in dians living there and out
of that money, gold biscuits were purchased by them and subsequently, those biscuits were smuggled to in dia. No doubt, both of them retracted their confessional statements later on but their retraction had been rightly ignored by the adjudicating authority, being an after thought. Their plea that their statements were recorded under coercion, in our view, had been rightly not taken note of by the adjudicating authority.
6. Moreover, no corroborative evidence had been also produced by Liyakat Khan appellant to substantiate his version. He only produced the copy of the B.R. which shows that he brought some gold one year back but no further evidence had been produced by him to correlate the sale of that gold in the market. The names of the persons to whom he sold the gold biscuits, were all his relatives and he did not produce any document showing the receipt of money in lieu of gold sold by him. Even the details of gold sold and money received by him, had not been disclosed by him. On which dates he sold the gold biscuits has been also not brought on record. No evidence has also been brought on record to prove the withdrawal of Rs. 5,00,000 from the NRI account of Ibrahim Khan. Therefore, his version that the seized money was the sale proceeds of the gold which he legally imported and some money was even withdrawn by him from the bank, has been rightly not accepted by the adjudicating for want of any tangible evidence to corroborate the same.
7. When Liyakat Khan, appellant himself admitted of having sold the foreign marked gold biscuits and Rs. 10,00,000 out of seized money represented the sale price of that gold, it was not for the customs authorities still to prove that gold was smuggled one. The burden of proving lawful importation of that gold stood shifted to Liyakat Khan, appellant and he had failed to discharge that burden. The ratio of law laid down in Malar v. CC & CE, Trichy 1988(33) EL T 444, CC, New Delhi v. Sudhir Electronics 2000 (123) ELT 1054, Shafi Ahmad v. CC, Cochin 2000 (118) ELT 453, Ram Chandra v. CC 1992 (60) ELT277, Nanan Lal K. Jain v. CC (Preventive), Mumbai 2000 (124) ELT 401, Kiran Chandra Sarkarv, CC 1992 (61) ELT 154, K.P. Basheer v. CC & CE, Cochin 1999 (109) ELT 247, Hukmi Chand Ghewar Chand Saraf v. CC, Jaipur 1994 (74) ELT 56, CC, Jaipur v. Bharat Kumar 1999 (109) ELT 552, Hans Raj Bald v. CC (Preventive), W.B., Calcutta 2000 (123) ELT 531, Kotteswaran v. CCE, Mad. 1997(91) ELT 435, Pradeep Kumar Singh v, CC, Lucknow 1998(104) ELT 111, Abdul Kader v. In spector of Central Excise 2000 (126) ELT 48 (Mad.). Abdul Mannan v. CC (Preventive), 1991 (54) ELT 350, Amco Electronics v. CC 1992(61) ELT 650, Gurumukh Singh v. Union of in dia & Others 1984 (3) ECC 86 (P & H): 1984 (18) ELT 274 (P & H) and CC v. Om Prakash 1993 (67) ELT 966, referred by the counsel, is not attracted to the facts of the present case, in the light of the facts and circumstances, discussed above. The confessional statements of appellants Usman Khan and Liyakat Khan, were enough to confiscate the seized in dian currency and to impose penalty on them under Section 112(b) of the Customs Act. The burden of proving the smuggled nature of the gold biscuits sold by Liyakat Khan appellant became irrelevant when Liyakat himself admitted of having sold the foreign marked gold biscuits, but had failed to substantiate his version of lawful importation of the same.
8. The appellant Rajendra Gujar also in his statement admitted his in volvement in the case along with his co-appellants Usman Khan and Liyakat Khan. He has failed to furnish the details of land which he allegedly agreed to sell to Liyakat Khan.
9. However, against Kailash Khandelwal and A.P. Khandelwal there is a no tangible evidence on record to establish their in volvement in the case. The name of Kailash Khandelwal is said to had been disclosed only by Usman Khan, appellant who allegedly got the same from one Purim Mal. But in the first statement of Usman Khan, he did not disclose his name and in the panchnama prepared at the time of recovery, there is no mention of Kailash Khandelwal of having helped Usman Khan and Liyakat Khan appellants in the sale of smuggled gold. Rather, Liyakat Khan, appellant, in his statement, denied his acquaintance with Kaiiash Khandeiwal. It is quite evident that the name of Kailash Khandelwal had been in troduced at a subsequent stage of the in vestigation, as the person to whom Usman Khan appellant had been selling the smuggled gold and getting the sale proceeds in lieu thereof, from him. But there is no reliable evidence on record to substantiate all this. No in criminating document or smuggled gold was recovered from the residential or business premises of Kailash Khandelwal or from his father A.P. Khandelwal’s residential house. Therefore, against both these appellants, in our view, no case for imposition of penalty under Section 112(b) of the Customs Act, is made out.
10. In view of the discussions made above, the impugned order of the
Commissioner regarding the confiscation of seized in dian currency of Rs. 15,00,000
and imposition of penalty on appellants Nos. 1 to 3 is upheld. However, keeping in
view the facts and circumstances of the case, and the financial hardship of these
appellants, pleaded by the counsel. We reduce the penalty amount on those three
appellants to Rs. 1,00,000 each. However, against appellants Nos. 4 & 5, the
impugned order of the Commissioner, for imposition of penalty, is set aside. All the
appeals stand disposed of in these terms.