ORDER
S. Kalyanam, Member (J)
1. The above appeals arising out of the common impugned order of the Collector of Customs & Central Excise, Guntur, dated 20-7-1989 are directed against the absolute confiscation of 8 foreign marked gold biscuits weighing 933.120 gms. and valued at Rs. 2,94,400 recovered from appellant M.T. Chauhan on 23-6-1988; absolute confiscation of Indian currency of Rs. 3,64,000 under Section 121 of the Customs Act, 1962 besides a penalty of Rs. 25,000 on two counts on appellant M.T. Chauhan respectively tinder the provisions of the Customs Act, 1962 and the Gold (Control) Act, 1968. There is no penalty or finding against appellant Hirachand.
2. On the basis of prior information, the DRI officers and also the Central Excise Preventive officers of Vijayawada intercepted appellant M.T. Chauhan on 23-6-1988 at Vijayawada and found him in possession of 8 gold biscuits of foreign origin. Since the authorities had reason to believe that he was keeping the gold biscuits in contravention of law, they effected seizure of the same under a mahazar. The authorities also recovered a slip of paper showing the name of the lodge and room No. at Vijayawada where the said Chauhan was staying. Thereafter the authorities searched the room and recovered from a battery charger Indian currency of Rs. 3,64,000 kept concealed therein; on a reasonable belief that the same was obtained and kept in contravention of law. Appellant M.T. Chauhan gave inculpatory statement before the authorities on 24-6-1988 inter alia admitting possession of the gold biscuits seized from his person at Vijayawada and further admitting that the currency in question represented the sale proceeds of contraband gold biscuits which he had sold to one Chandra Rao at Vijayawada. It is in these circumstances, after further investigations, proceedings were instituted which eventually resulted in the present impugned order appealed against.
3. Shri Kumar, the learned counsel for the appellants at the outset submitted that he was admitting the seizure of 8 contraband gold biscuits from the possession of appellant M.T. Chauhan at Vijayawada and would only confine his plea with reference to the quantum of penalty of Rs. 25,000 on two counts on him under the Customs Act, 1962 and the Gold (Control) Act, 1968 and would only pray for leniency and reduction.
4. So far as the seizure of the currency is concerned, it was contended that there was no reasonable belief for effecting seizure of the same and, therefore, the very seizure would stand vitiated. He further submitted that at the time of seizure appellant Hirachand merely stated to the authorities that he was only expecting the sale proceeds of 8 contraband gold biscuits and, therefore, there was hardly any circumstance for the authorities to entertain or form a belief much less a reasonable one for effecting the seizure of the currency in question. He further submitted that appellant M.T. Chauhan was also examined and statement recorded only the next day i.e. 24-6-1988 and, therefore, even if he had stated in the statement that the currency represented sale proceeds of contraband gold biscuits that would not justify in law the seizure effected by the authorities the previous day viz. 23-6-1988 without there being any basis for the formation of a reasonable belief before effecting seizure. He further contended that Section 121 of the Customs Act, 1962 under which the currency in question is confiscated envisages a direct nexus between the seizure and the contraband goods and in the present case there is no evidence to hold that the currency in question was the sale proceeds of any contraband gold. In this context the learned counsel urged that even as per the statement of M.T. Chauhan the contraband gold biscuits had been sold to one Chandra Rao, who on examination by the authorities gave an exculpatory statement and even went to the extent of saying that he did not know M.T. Chauhan at all. The adjudicating authority also presumably accepted his stand and exonerated him of the charge under the impugned order. In such a situation the currency cannot be seized muchless confiscated under Section 121 of the Act. The learned counsel further submitted that notwithstanding the fact that appellant Chauhan retracted his inculpatory statement of 24-6-1988 only on 22-8-1988, after about a couple of months, the fact of retraction is there and, therefore, without some corroborative evidence the currency would not be confiscable. Finally, he submitted that appellant M.T. Chauhan was a COFEPOSA detenu languishing in jail for about 8 months. The same transaction has given rise to penal offences under two statutes and Gold (Control) Act having been repealed may not call for a separate penalty in the factual background of this case.
5. Shri Namasivayam, the learned DR, took us through the evidence and contended that the inculpatory statements are voluntary and the evidence clearly brings out the nexus between the sale of contraband gold and the currency and also drew our attention to the belated retraction after about a couple of months and urged that the retraction in the above circumstances has to be rejected as an after-thought.
6. We have carefully considered the. submissions made before us. The fact of seizure of 8 gold biscuits on 23-6-1988 from the possession of appellant M.T. Chauhan is admitted. It is only in pursuance of seizure of the chit bearing the place where he was staying the authorities searched the room in the hotel at Vijayawada and found the currency in question kept concealed in a battery charger. If substantial quantity of currency is found concealed in a battery charger kept in the room occupied by a person from whose possession the authorities had just then recovered admittedly contraband gold biscuits 8 in number, it would be idle to contend that there is no circumstance at all to form a reasonable belief to effect seizure of the currency in question. The plea that appellant Hirachand did not know anything about the currency in question and merely stated that he was expecting the sale proceeds of 8 gold biscuits is of no relevance in the context of the formation of a reasonable belief by the authorities to effect seizure of the currency in the circumstances indicated above. It may not be out of place to emphasise here that the law is well settled that the adequacy of the grounds on which the belief is entertained by an authority or officer under the Customs Act, 1962 is not justiciable and the seizure can be assailed only if it is made not on the basis of any reasonable belief but merely a chance recovery or on speculation or seizure is found to be fanciful or on imaginary grounds. We have gone through the statement of Chauhan given on 24-6-1988. It contains a plethora of factual details detailing the circumstances as to how he was dealing in contraband gold biscuits and how he got the currency in question after disposal by sale of contraband gold biscuits to one Chandra Rao. On going through the statement, we are satisfied that the same is voluntary and true meriting acceptance. As rightly contended by the learned DR, we reject the belated retraction of the same by the appellant on 22-8-1988 as an after-thought and made in an attempt to extricate himself from the clutches of law. We do not find any substance in the plea of the learned counsel that by reason of exonerating Chandra Rao, who is alleged to have supplied the gold biscuits to Chauhan, appellant Chauhan should be exonerated. It would be seen that the adjudicating authority has merely given the benefit of doubt to the said Chandra Rao and exonerated him. Even if exoneration of the said Chandra Rao on the available evidence is bad in law that would not ipso facto lend any strength to the case of the appellant, if there is evidence to prove the charge against him. Section 121 is very clear that the sale proceeds of contraband gold would be liable for confiscation. In the present case Chauhan himself has given an inculpatory statement, which we have found to be voluntary and true meriting acceptance. The currency was kept concealed in a battery charger in the room in the occupation of Ghauhan. Chauhan himself had been found in possession admittedly of 8 gold biscuits of foreign origin on the same day. These circumstances clearly bear out and establish that the currency represented the sale proceeds of contraband gold biscuits. Therefore, on consideration of the entire evidence on record, we confirm the finding of the adjudicating authority and hold that the charges against appellant Chauhan have been brought home by the evidence on record. Having regard to the large number of gold biscuits with which appellant Chauhan had been dealing in, the penalty of Rs. 25,000 under the Customs Act would only err on the side of leniency and, therefore, we confirm the same in entirety. The currency in question having been proved to be sale proceeds of contraband gold biscuits is confiscable as held by the adjudicating authority under Section 121 of the Customs Act, 1962 on the evidence on record and we, therefore, uphold the absolute confiscation of the same in terms of the impugned order.
7. Keeping in mind that the appellant was a COFEPOSA detenu in jail for about 8 months and that the same transaction has given rise to an offence under the Gold (Control) Act, 1968 as well and also having regard to the fact that the Gold (Control) Act stands repealed as on date, we are inclined to think that the interests of justice would be met if the penalty on appellant Chauhan under the Gold (Control) Act is reduced to Rs. 10,000 (Rs. Ten thousand) and we order accordingly.
8. Appellant Hirachand has not been imposed any penalty and there is no specific relief prayed for in his appeal against the impugned order. Therefore the appeal filed by Hirachand is dismissed as mis-conceived in law.
9. In the result the appeals stand dismissed as above.