ORDER
Gowri Shankar, Member (T)
1. This appeal is against the order of the Collector of Customs (Preventive), Mumbai imposing a penalty of Rs. 10 lakhs on the appellant under Clause (b) of Section 112 of the Act in relation to his role in the smuggling of 945 kgs. of silver at Tak beach near Vengurla on 6.10.92.
2. Acting on prior information, the officers of Rummaging and Intelligence Division of the Mumbai custom house and the officers of the Directorate of Revenue Intelligence, Mumbai received look out for and intercepted a truck carrying the silver in question on the night of 6th October, 1992. The driver and other occupants of the truck escaped in the following interception. The officers brought the truck and silver to Mumbai where it was seized. Evidence obtained in the course of subsequent investigation indicated that the smuggling had been planned by Mohd. Dossa and Mohd. Kalia. They sought for and obtained the use of the truck belonging to Rs. Prabhu Zantye, who lived in Azgaon. The assistance of Sunil Natekar, resident of Shiroda, a nearby village and Pramod Arolkar, a resident of Aravali, another nearby village in the landing was also obtained. The officer also found that the appellant was in the matter. The appellant was served to him. Inspector of Central Excise and was posted at the relevant time as inspector of Customs at Shapoli.
3. The allegation against the appellant in the notice runs as follows:
“1) Mohd. Dossa in connivance with Kalwadekar and Mohd. Kalia planned the landing of smuggled silver ingots in India and transported the 259 silver ingots to Vengurla on 5/6.10.92.
2) Shri Dhananjay N. Khalwadkar planed the smuggling of 259 silver ingots with the assistance of Mohd. Kalia Shri Pramod Y. Arolkar, Shri Ramachandra Shrikrishna Prabhu Zantye and Sunil S. Natekar at the sea shore of Tak, Vengurla on 5/6.10.92.”
4. The Collector in his order relies upon the statement of Zantye, Pramod Arolkar and Natekar, Pandarinath Arolkar (Pramod’s brother) and Jagannath Warkhandkar. We have now considered these statements. Zantye’s statement were recorded on 17.2.93, 18.2.93, 1.3.93 and 15.3.93. In his statement of 17.2.93, he said that in response to a telephone call received by him from Arolkar, Natekar asked him (Zantye) to accompany him to meet Arolkar at Sai Prasad Hotel at Kolhapur, which was owned by Arolkar’s brother, Pandarinath. At that meeting, Pramod Arolkar introduced these two to the appellant and told them “that we got this work of unloading of foreign origin silver ingots due to Shri Khalwadekar. Such work has to be done properly.” Khalwadekar then told them not to go anywhere for eight days and that Arolkar would inform them in advance of the work to be done. He subsequently narrates how he and Natekar was asked by Arolkar to keep this truck ready, since the landing of the silver would take place on 5.10.93. On 4th October, he and Natekar stayed at Sai Prasad hotel and Arolkar told them that the officers arrangement of customs officer at Ratnagiri is looked after by Khalwadekar and there is nothing to worry and said arrangement is made. The narrates further the curse of events of the landing of the silver and how shortly before the truck was seized, he and his driver escaped from the truck. He says that subsequently he met Arolkar on 24th October when he was told that future course of action would be decided after meeting the appellant who was to come after 2-3 days for Diwali. On the 28th October, he along with Natekar and Arolkar met the appellant to enquire of them as to how the goods were picked and information had flown to the department. The appellant cautioned them not to disclose anything to anyone. Zantye and Arolkar spoke to the appellant at his phone number at Kolhapur between 25th and 28th October (the phone was installed at the residence at Kolhapur where appellant’s brother and his parents lived). In the first week of December, Zantye and Arolkar went to meet the appellant who had met with an accident, did not discuss anything with him. After couple of days, they again went to meet him. The three of them went to a petrol pump nearby where the appellant made a phone call to Dossa at Dubai. Zantye said he would be able to identify the telephone call. When they went to meet the appellant, he gave Rs. 5000/- to Arolkar out of which Zantye received Rs. 2000/-. Subsequently, the three of them went to meet the appellant at Pune where he had been transferred. They met him on the evening of 3rd February. He said he would not give any more money. His statement recorded on 18th February does not refer to the appellant at all. By his order dated dated 18th February addressed to the Magistrate, Zantye retracted from the admission made in the statement alleging that he signed these statements without being aware of the contents. Zantye in application to the Magistrate field on 18.2.1993 retracted the contention of his earlier statement on the ground that he was made to sign them without being aware of their context. However in his further statement recorded on 1st March, 1993 he has accepted the correctness of the earlier statement. This statement was not retracted.
6. The department representative emphasizes the evidence the Commissioner had relied upon. He points to the fact that Arolkar and Batekar in their later statements had accepted the correctness of their earlier statements and therefore their retraction filed earlier has no value. Pramod Arolkar himself had told Zantye and Natekar that Mohd. Kalya had given him to understand that there was nothing worry about the customs and he had taken care of it. The closeness of Arolkar with the appellant was clear from the fact that, despite being a customs officer charged with prevention of smuggling, the unhesitatingly met him and the others after the seizure and parted with Rs. 5,000/-. The appellant was absent from Dapoli where he was posted on the date of landing of the silver. The explanation that he gave for the absence, that he had to go to Kolhapur for medical purpose is patently false and contradicts the claim made in his appeal that he had gone to Kolhapur for the naming ceremony of his son. If the latter were true, he would have stated that as ground in his leave application. The appellant had taken medical leave on account of typhoid on 30th September and this would not have been possible unless, as required by the service rules, he was pronounced fit to join duty. There was therefore no reason to obtain a medical certificate at Kolhapur certifying that he was fit and had recovered from typhoid. The suspicious conduct on his part goes against him.
7. Sunil Natekar’s statements were recorded on the same dates. He, too retracted his statement in his application to the Magistrate on 18.02.1993; he, too, however in his later statement of 1st March, 1993 accepted the correctness of his earlier statement.
8. The statements of Pramod Arolkar were recorded on 3.2.1993 and 1.3.1993. In his statement on 13.2.1993, he says that he was approached, while a the Hotel Sai Prasad at Kolhapur around the end of September of the previous year by Mohd. Kalya who offered him a job of landing silver in his village. He accepted the job and rang up Sunil Natekar who had earlier helped him in such matters too met him on 27th September in the Sai Prasad Hotel and he told them about the job for Mohd. Kalya, who was also present during the meeting; he asked Zantye to keep the truck ready. Subsequently, Mohd. Kalya met Arolkar on 3rd October and informed that the silver was to be landed on 5th October. Arolkar, Zantye and Kalya once again met on 4th October. He had briefed Natekar and Zantye about the action to be taken he passed on to them the assurance that there was nothing to worry about the customs. He described how he and Kalya reached Kudal in the early morning of 5th October, made arrangement for the labourers required to unload and load silver; picked up Natekar and Zantye and took the truck to the beach at Tak; described how the silver was landed on the beach, loaded on to the truck and the truck set off for Kudal. Arolkar, Kalya and Natekar proceeded ahead and, not finding the truck, went back to Vengurla. After a few days; Zantye and Natekar asked him for money that they were promised for the job. Since he had was no money, he took them to the appellant at Kolhapur and borrowed from him Rs. 2,000/- to give to Zantye. On being asked, he said that he knew the appellant or the last five years or so. He had met him at Sawantwadi where the appellant was posted. He one day helped him repair his car and thereafter “whenever he used to come in my area for patrolling he used to meet me”. In reply to another question, he said “Khalwadekar knows about my involvements in the landing of smuggled goods.”. In reply to a third question as to why when he had two brothers at Kolhapur he went to Khalwadekar for money, he says that “I went to Shri Khalwadekar as I was very sure, that I would get money from him side he knew me for last 4-5 years.” His further statement of 1st March, 1993 repeats having taken money from the appellant.
9. Statements of Pandarinath Arolkar were recorded on 30th and 31st March. In his first statement, this man refers to the meeting that took place between Zantye, Natekar and Pramod Arolkar. He directed Zantye and Natekar, on their enquiry to Pramod Arolkar who was sitting on a cooch near the kitchen. The three had tea together. He says, “I do not know whether there was anybody else along with Shri Natekar and Zantye. However there is a possibility of somebody waiting in the compound of the Saiprasad Hotel who had come with Zantye and Natekar.” He refers to subsequent meeting in October of these three people and says “This time I was sure that there was nobody along with them.” He says that he does not know anyone named Dhananjay Khalwadkear. In his second statement recorded the next day, he says that on the previous day he had confirmed Zantye and Natekar as the persons who visited the hotel. He says, with regard to his first meeting, “Now I remember that there was one more person sitting alongwith my brother, before the arrival of Shri Ramchandra Srikrishna Prabhusantye and Sunil Salaaram Batekar in Hotel Saiprasad and all of them had a meeting thereafter I do not know, the name of that other person who was sitting with my brother. I will not be in position also to identify, that person if shown again Shri Ramachandra Prabhuzantye and Sunil Natekar being known to me for years together; I could identify them.”
10. This is the evidence upon which the Collector has relied, in which the appellant’s name finds mention. He has dismissed the claim made by the appellant that he was falsely implicated in the case by two of his colleagues named Mahadik and Indulkar. The Collector accepts that the telephone number in the house of Mahadik was found written in a slip of paper recovered from Zantye but refers to investigation which shows that Mahadik had given numbers so that on information to the department. He notes that the appellant had not denied having given Rs. 5,000/- to Pramod Arolkar. He says that the appellant was not able to explain why Zantye, Natekar, Arolkar, Warkhandkar and Pandarinath have implicated in the case. The appellant had claim that the dates of landing the silver, he was engaged with the work in Dapoli Division and that his claim have been proved to be false. In fact he had absented himself from his place of positing and “even by misrepresenting the ground of leave”. He says that his absence from 4th October onwards and earlier was on account of the fact that he remained in touch with persons involved in smuggling operation. He says that the appellant has gone absented himself from duty after Natekar was taken to custody on 16.2.1993. He relies upon the statement of the three persons who met on 27th September, 1992. He notes that the appellant was detained under COFEFAVA and his petition before the advisory board which confirmed the detention and writ petition filed in the Bombay High Court were turned down.
11. The Collector’s conclusion that Pandarinath Arolkar, Warkhandkar have implicated the applicant in their statements is clearly erroneous. Pandarinath Arolkar referring to the meeting took place at the Sai Prasad hotel on 27.9.92 does not say that the applicant was present. His statement suggests that a third person might have been present, who, he says, might have been waiting outside the restaurant. He does not identify the third person. Nor does Warkhandkar the person who drove the truck on which the silver was loaded does not say or suggests the appellant was present or in anyway implicate the appellant. It is to be noted that no one in fact finds the presence of the appellant in the landing. This fact in our opinion has some significant bearing upon the issue.
10. The evidence that the Collector has rightly relied upon therefore are the statements of Zantye and Natekar, which squarely are against the appellant to the extent that they show his presence at the discussion on 27.9.92 at the hotel in Kolhapur relating to the landing of the silver which was in take place; their later statements in which they say that the appellant asked them to be discreet and not to speak to anyone and they being present when the appellant gave Rs. 5000/- to Pramod Arolkar; the statement of Pramod Arolkar himself, in which he refers to his having asked for and received Rs. 5000/- from the appellant and the conduct of the appellant. The evidence of the persons relating to the meeting at Sai Prasad hotel on 21st September contains significant contradiction. While Zantye and Natekar are more clearer and specific that the appellant was present and participated in the discussion, both the Arolkar brothers did not say that the appellant was present. Pramod Arolkar does not say that there was anyone present apart from himself, Zantye, Mohd. Kalia and Natekar. He does not appear to have been asked whether the appellant was present or not. Pandarinath Arolkar on being asked whether the appellant was present, says that he was not present. In fact in the identification parade which was held, while he identified Zantye and Natekar as having been present in the hotel, he was unable to do so with regard to the appellant Silence on the part of Pramod Arolkar and the contrary stand by Pandarinath Arolkar would militate against the wholehearted testimony of other two persons with regard to the presence of the appellant at the meeting. Another significant factor which works to the appellant’s advantage is the absence of clarity in the show cause notice as to his role in the smuggling of the silver which took place. The notice alleges that the appellant planned these smuggling and landing of silver with Dossa, Kalia, Pramod Arolkar, Zantye and Natekar. It does not attribute to the appellant any specific act or omission with regard to the actual act of smuggling. The planning of the smuggling is at the stage of preparation. Many acts of smuggling and other crimes are planned but not even attempted, being aborted for variety of reasons. The mere participation of the appellant in the planning of the smuggling if established, would not by itself be sufficient to render him liable to penalty under Section 112 of the Act. We have already found that it is not established beyond reasonable probability that the appellant was involved in the planning of the smuggling. The only planning that is referred to took place at the Sai Prasad hotel where the presence of which is subject to contrary testimony. The Collector in his order said that the appellant misused the influence as a custom officer in order to facilitate the smuggling and transport of the silver. He says that “the task of providing custom protection to the landing of the silver from the customs angle to the owner of the silver… was assured by the appellant.” We find absolutely no material in support of the conclusion. We have already noted that there is no evidence to place the appellant at the Tak beach at Vengurla when the silver was landed. No one says he was present there. Nor is there evidence to show that at any time spoke to or influence at the officers who were posted on or around Vengurla and were therefore concerned with the prevention of smuggling. No such allegation is made in the notice.
11. No doubt, as the Collector finds, the conduct of the appellant in some respects raises grave questions about his involvement in matters which is not consistent with the functioning as officer of customs of smuggling. We do not find it possible to accept this contention that he did not pay Rs. 5000/- to Pramod Arolkar around December 1992 or that he did not meet Zantye and Natekar at Sai Prasad hotel after the landing took place at Ram Taloa tank. Arolkar, Zantye or Natekar have not resiled from their statements to this effect. There is no reason why they should say that appellant was present at the later meeting if he was not and no reason why Pramod Arolkar should say he received Rs. 5000/- if he did not. Unlike in the case of the earlier meeting, there is no conflict in the evidence from which an inference can be drawn or evidence in his support. The fact therefore remains the appellant did advice Zantye and Natekar to be low, knowing that they were wanted by customs authorities and to avoid mentioning his name and that he gave Rs. 5000/- to Arolkar. The contention that his counsel raised that there was nothing illegal or improper is difficult to accept. Nobody in the ordinary course would give Rs. 5000/- to a person, whom he had casually met six years ago. The appellant having functioned as an officer of customs would surely have known the antecedents of Pramod Arolkar and his act of giving him money poses grave question as does his act of advising Natekar and Zantye of evading detection. It does not appear to us that the act of the appellant lending or giving what was reasonably a high sum of money to whom he knew or had reason to believe was engaged in the smuggling is consistent performance of his duty as an anti-smuggling officer. While this may be a ground for proceeding against him by the department, it does not justify the inference that the appellant was involved or had anything to do with the specific act of smuggling with which we are concerned.
12. The appeal is accordingly allowed. Consequential relief.