ORDER
Lajja Ram, Member (T)
1. These are two appeals filed by Shri Paras Vaid–one under the Customs Act, 1962 and the other under the Gold (Control) Act, 1968, against (1) Order-in-Original No. 01/C/Customs/89, dated 15.3.1989 and (2) Order-in-Original No. 02/C/Gold/89, dated 15.3.1989, both passed by the Collector, Central Excise, Indore.
2. One Shri Dhyan Singh was apprehended by the local police of Raipur, (Madhya Pradesh) on 24.3.1985, and 8 foreign marked gold biscuits, each weighing 10 tolas, valued Rs. 1,92,000/-, were recovered from his possession. On 25.3.1985, these foreign marked gold biscuits were taken over by the Customs, and Central Excise officers under the provisions of the Customs Act, 1962, and the Gold (Control) Act, 1968. The statement of Shri Dhyan Singh was recorded on 26.3.1985 under Section 108 of the Customs Act, and Section 63 of the Gold (Control) Act, when he was released from the police custody for a few hours on 26.3.1985. In that statement, he stated that the gold belonged to one Shri Paras Vaid of M/s. Kastur Chand Mohan Chand Vaid, Sadar Bazar, Raipur.
3. Shri Paras Vaid denied any connection with the seized gold, or with Shri Dhyan Singh.
4. The Collector, Central Excise, Indore confiscated the seized gold and imposed a penalty of Rs. 1 lakh on Shri Dhyan Singh and Rs. 50,000/- on Shri Paras Vaid, the appellant, under Section 112(b) of the Customs Act. Penalty of Rs. 1 lakh on Shri Dhyan Singh and Rs. 50,000/- on Shri Paras Vaid was also imposed under Section 74 of the Gold (Control) Act.
5. In the Memo of Appeal, the appellant has made the following points:
(1) The Customs and Central Excise officers were not called by the police officers. They came to know of the seizure by the police, through local papers;
(2) According to Shri Dhyan Singh he was carrying 10 gold biscuits but only 8 gold biscuits were seized. It proves the mala fide of the police officers.
(3) Simply because Shri Dhyan Singh was earlier in the employment of the appellants, it does not mean that he was carrying any contraband on behalf of the appellant.
(4) The Collector, Central Excise has given a finding that the other person accompanying Shri Dhyan Singh was the appellant who ran away from cycle rickshaw; that was neither the case of the police nor of the department that the appellant ran away from the cycle rickshaw, and thus this finding is without any basis,
(5) According to Shri Dhyan Singh, he purchased the gold from one Mishra Ji of Calcutta, who had not been identified not his statement was recorded.
(6) There is no evidence on record that the appellant was engaged in the business of gold or smuggling of gold biscuits.
(7) Cross examination of Shri Syed Nawab who happened to be the eye witness to the checking of Shri Dhyan Singh by police, reveals that Shri Dhyan Singh was repeatedly refusing the ownership of the gold contained in the bag and there is no evidence from any independent source that there was any hand of the appellant in the above seizure case.
(8) The Customs officers did not examine the police officers nor recorded their statement during the investigation of the case.
6. The Collector, Central Excise, Indore has filed Memo of Cross Objections in which he has pleaded for rejection of the appeal filed by the appellant.
7. The case was heard on 15.4.1993 when Shri I.C Upadhyay, Advocate appeared for the appellant. Shri D.D. Bhagat, JDR represented the respondent.
8. Shri Upadhyay, the learned Advocate submitted that the statement of the alleged accomplice when he was in police custody could not be relied upon, to involve Shri Paras Vaid. He referred to the Supreme Court decision in the case of State of Maharashtra v. P.K. Pathak wherein the Hon’ble Supreme Court had observed that the retracted confessions required corroboration in material particulars by some other evidence.
9. He also relied upon the Supreme Court decision in the case of Gian Chand v. State of Punjab .
10. Shri B.D. Bhagat, the learned JDR stated that the facts were clear, the gold was foreign marked and it was recovered by the police. The statement of Shri Dhyan Singh had been recorded when he was not in police custody. He relied upon the orders passed by the Collector, Central Excise, Indore.
11. In reply, the learned Advocate stated that the alleged supplier of the foreign marked gold was one Mishra of Calcutta who had not been touched by the department.
12. We have carefully gone through the facts and circumstances of the case and the submissions made on behalf of the appellant as well as the submissions made on behalf of the respondent.
13. We find that the case against the appellant is based on the initial testimony of Shri Dhyan Singh which has been retracted afterwards.
13. Initially, the gold was recovered by the local police. There are contradictions in the version of different witnesses. The gold was recovered from the bag whose ownership was subsequently denied by Shri Dhyan Singh. There is also some confusion about the number of gold biscuits.
14. The shop and residential premises of the appellant, his family members and other partners of his firm were checked on 28.3.1985, but nothing incriminating was found. Various floors of the residential premises, including worship room, silver factory etc. had been thoroughly searched. The appellant had denied that the gold belonged to him. He has also stated that at the time of the seizure of gold, Shri Dhyan Singh was not in his service and that he had been removed from the service on 30.1.1985. He denied to have given any money to Shri Dhyan Singh. He stated that he did not know anybody by the name of Mishrajee of Calcutta.
15. Except the statement of Shri Dhyan Singh there is no evidence to link the appellant with the foreign marked gold. The statement of Shri Dhyan Singh was recorded when he was released titan the police custody for a few hours on 26.3.1985 for giving his statement before the Central Excise officers under Courts oral orders.
16. Shri Dhyan Singh on 25.4.1985 retracted from his statement.
17. The present appeal has been filed by Shri Paras Vaid on whom the allegations have been levelled on the basis of the statement of Shri Dhyan Singh. The gold was alleged to have been recovered from Shri Dhyan Singh, who had retracted from his testimony given before the Central Excise Officers during the course of interval from police custody. To our mind, the testimony of Shri Dhyan Singh is a weak testimony to implicate Shri Paras Vaid in the act of smuggling of gold
18. The foreign marked gold biscuits were initially recovered by the local police. They were seized by the police on the suspicion that they were meant for illegal sale.
19. In the case of Gian Chand and Ors. v. State of Punjab the Hon’ble Supreme Court had observed that “when the goods are delivered to the customs authorities by the Magistrate they are not taken from the possession of the persons accused in criminal case so as to throw the burden of proof on them.” They added that “when the goods were seized by the police, they ceased to be in the possession of the accused and passed into the possession of the police.
20. In the context of the Sea Customs Act, 1878, the Hon’ble Supreme Court held that when that possession is transferred by virtue of the provisions contained in Section 180, to the Customs authorities, there is no fresh seizure under the Customs Act.
21. When the gold biscuits were taken over by the Central Excise Officers on superdgi from police authorities, no statement of the police officers who had recovered the gold biscuits was recorded.
22. The statement of one of the panchas witnesses Syed Nawab during cross examinations on 11.10.1989 refers to two passengers in the rikshaw, running away of the other passenger, Shri Dhyan Singh stating that the bag did not belong to him, recovery of gold biscuits from the full pant kept in the bag etc. This version cast a doubt on the facts and circumstances as made out by the revenue.
23. The Collector, Central Excise, Indore in Order-in-Original at page No. 10 had stated that Shri Paras Vaid on reading the news of recovery of gold biscuits from Shri Dhyan Singh might have been tempted to make some false entries immediately in his book of accounts showing termination of services of Shri Dhyan Singh with effect from 30:1.1985. He had also stated that the evidence of one person running from rikshaw makes it more suspicious and tends to lead to a belief that Shri Paras Vaid himself was escorting Shri Dhyan Singh from railway station to his shop and he might have escaped from the rikshaw on seeing the police officers, leaving Shri Dhyan Singh alone to face the consequences.
24. These are assumptions and presumptions on whose basis no case could be established against Shri Paras Vaid.
25. Shri Dhyan Singh was an employee of Shri Paras Vaid with a monthly salary of Rs. 750/-. This itself is not enough to provide corrboration as to complicity of Shri Paras Vaid in the act of smuggling and violation of law. The corroboration has to be in material particulars, corroboration is an evidence which confirms or supports or strengthens other evidence. It is an evidence which renders other evidence more probable. Merely, because Shri Dhyan Singh was in the employment of Shri Paras Vaid, it cannot be said that whatever Shri Dhyan Singh stated could be treated as correct against Shri Paras Vaid
26. When this piece of evidence namely the statement of Shri Dhyan Singh is eschewed from consideration, there is no evidence to sustain the charges against Shri Paras Vaid, the appellant
27. Taking all the above discussions into account, we vacate those parts of the impugned orders which concern the imposition or penalty on Shri Paras Vaid, and accept both the appeals, with consequential relief to the appellant, if any.
28. Cross Objections filed by the respondents are hereby rejected.