TAX CASES No.23 OF 2001
COMMISSIONER, CUSTOM DEPARTMENT------Appellant)
Versus
HARENDRA PRASAD---------------------------------(Respondents)
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(Against the order dated 31.5.2001 passed by the Customs,
Excise & Gold (Control) Appellate Tribunal, Kolkata, in
Appeal C-259/2000)
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For the applicant : Mr. Rakesh Kumar Singh, Advocate.
For the Respondent : Mr. Satish Kumar Sinha, Advocate.
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PRESENT
THE HON’BLE MR. JUSTICE CHANDRAMAULI KR PRASAD
THE HON’BLE DR. JUSTICE RAVI RANJAN
Prasad & On 19.04.1991, a passenger bus was intercepted by
Ranjan,JJ
the Officer of Motihari Custom. In the said bus one Ram
Lochan Sah was found traveling and from him 5 pieces of
silver bars of 97.40% purity weighing 8.559 kgs were
recovered. The Custom Authority seized the said silver on a
reasonable belief that it was smuggled. The statement of Ram
Lochan Sah was recorded on 28.4.1991. In the said statement
he has stated that the silver was handed over to him by
Harendra Prasad respondent herein at Raxaul and was to be
delivered to one Santosh Kumar Agrawal at Siwan. During
investigatyion Santosh Kumar Agarwal was interrogated but
he denied to have placed any order for supply of silver in
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question. Harendra Prasad however claimed that the seized
silver is part of business stock in as much as he carries the
profession of silvlersmith.
A show cause notice was issued to Harendra Prasad
as to why the silver seized be not confiscated and personal
penalty not imposed on him. Harendra Prasad filed show
cause and on adjudication, the Deputy Commissioner
confiscated the silver and imposed a personal penalty of Rs.
15,000/ on him. Appeal preferred by him against the order of
Deputy Commissioner was dismissed by the Commissioner
appeal. Harendra Prasad then carried the matter further in
appeal before the Custom Excise &Gold (Control) Appellate
Tribunal, Eastern Bench, Kolkata (hereinafter referred to as
the tribunal.) The tribunal by order dated 30th of May 2007 set
aside the order of confiscation and imposition of personal fine
passed by the Deputy Collector as affirmed by the
Commissioner (Appeal). While doing so it observed that the
revenue has not produced any evidence to prove that the
silver in question was of foreign origin. It further observed
that to shift the onus in terms of provision of section 123 of
the Custom Act the revenue has first to establish that the
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goods seized are of foreign origin and only thereafter onus
will shift on the person from whom the goods have been
seized. It also took into consideration the retracted statement
of Ram Lochan Sah but in the absence of any corroboration it
did not place implicit reliance on the said statement.
Aggrieved by the same the Commissioner of Custom
has preferred this application under section 130 A of the
Custom Act. This Court in exercise of its power under
section 130 A of the Custom Act (hereinafter referred to as
„the Act‟) directed the Tribunal to draw the statement of case
and refer the following questions of law for determination;
(i)” Whether the Tribunal was justified in
ignoring the confessional statement of Ram
Lochan Sah who has stated that the seized silver
was handed over to him by the respondent
Harendra Prasad in Nepal after purchasing the
same in Nepal”
(ii)”Whether the finding of the Tribunal is
vitiated on account of non-consideration of
the material evidence and misconstruing the
law.”
Mr. Rakesh Kumar Singh, appearing on behalf of
the petitioner submits that the confessional statement of Ram
Lochan Sah is admissible in evidence in view of section 108
of the Act and that was sufficient to hold that the silver
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seized is smuggled one.
Mr. Satish Kumar Sinha, however, appearing on
behalf of the respondent contends that mere confessional
statement of Ram Lochan Sah shall not lead to the conclusion
that the silver seized was smuggled. It is worth mentioning
that the silver seized is less than 10 kgs. Its purity has been
found to be 97.40%. Further it does not contain any mark of
foreign origin. Ram Lochan Sah in his statement has though
stated that it was given to him by Harendra Prasad, a
Silversmith of Raxaul and he had purchased the same from
Birganj ,Nepal. In the statement relied upon by the Custom
Authority, he had not claimed to be a witness of purchase of
silver by Harnedra Prasad from Nepal. The cumulative
effect of all these infirmities led the Tribunal to conclude that
it has not been proved that the silver seized was of foreign
origin.
In the back ground of the aforesaid fact can it be said
that the Tribunal erred in ignoring the statement of Ram
Lochan Sah and the finding recorded by the Trinbunal is
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vitiated on account thereof. We are of the opinion that the
finding of the Tribunal can be said to be vitiated only when it
is found that it has been recorded without considering relevant
material or considering irrelevant material or a person duly
instructed in law will not reach the said finding. Here in the
present case Ram Lochan Sah does not claim to be a witness
of purchase of silver from Nepal by Harendra Prasad.
According to him Harendra Prasad had handed over the silver
to him at Raxaul. Not only this, the silver did not have any
mark of foreign origin .Its purity is 97.40 % ,whereas in the
case of silver of foreign origin it is normally of 99.99 %. In
these backgrounds, we are of the opinion that the Tribunal was
justified in not relying on the confessional statement of Ram
Lochan Sah.
Accordingly our answer to the questions No.1
formulated is in the affirmative, against the revenue and it is
held that the Tribunal was justified in ignoring the
confessional statement of Harendra Prasad.
From what we have stated above it is evident that
Tribunal‟s findings is on assessment of relevant material.
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Accordingly answer to the second question is in the
negative, against the revenue and it is held that the Tribunal
finding is in accordance with the law and not vitiated on any
count.
Reference is answered accordingly.
Tax case stands disposed of.
(Chandramauli Kr. Prasad, J)
(Dr. Ravi Ranjan, J)
Patna High Court
15th Sept.2008
Rahman/NAFR