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Pradeep Mahajan vs Commissioner Of Customs on 10 December, 2003

Customs, Excise and Gold Tribunal – Delhi
Pradeep Mahajan vs Commissioner Of Customs on 10 December, 2003
Equivalent citations: 2004 (92) ECC 544, 2004 (175) ELT 441 Tri Del
Author: P Bajaj
Bench: A T V.K., P Bajaj


JUDGMENT

P.S. Bajaj, J.

1. This appeal has been directed against the impugned Order-in-Original dated 26.3.2001 vide which the Commissioner of Customs had imposed penalty of Rs. 10 lakhs under Section 112(b) of the Customs Act on the appellant on account of recovery of one gold biscuit, Indian and foreign currency, besides ordering confiscation of his two cars, as detailed therein.

The facts of which the present appeal arises may briefly be summed up as under:

2. On 4.9.97, the appellant was intercepted in the area Pitampuras while going in a Maruti Esteem VX car bearing registration No. DL-6CA-1614 by the DRI officers at about 0830 hrs. On enquiry, he disclosed his parentage, address and after initially denying, later on, on persistent questioning, admitted that he was carrying in the car Indian and foreign currency which was the sale proceeds of the smuggled gold biscuits. His statement was allegedly recorded at the spot. But the search of his car was not taken there. He was brought in that car to the DRI Office and there the panchnama regarding the recovery of 48,000 pound sterling and Indian currency of Rs. 6,50,000 was prepared in the presence of two witnesses. On further enquiry, the appellant allegedly revealed to the officers that the Indian and foreign currency recovered from his car was the sale proceeds of 139 pieces of smuggled gold biscuit which he sold at the behest of Puran Singh to one Raja, near Hanuman Mandir at Chandini Chowk. Thereafter, the residence of the appellant was also searched and from there Indian currency amounting to Rs. 90,000 and one gold biscuit lying concealed under the driver’s seat in a red pouch, in the Maruti car parked at the residence was recovered and panchnama in that regard was prepared in the presence of wife of the appellant namely Anita Mahajan and which was also attested by two witnesses. Efforts were made to record the statements of Puran Singh and Raja but both could not be traced. However, the statements of the two wives of Puran Singh, namely Mrs. Baljit Kaur and Smt. Saminder Kaur were recorded on 4.9.97 wherein they denied their concern with the case and pleaded their ignorance. Puran Singh himself at that time was not available at the residence. The raid was also conducted at the transport company of Puran Singh, known as M/s. Azad Sandhu Transport Co., situated at AG-399, Sanjay Gandhi Transport Nagar, Delhi, but the same was found locked. On completion or the investigation, show cause notice was served not only on the appellant, but also on Puran Singh and Raja. During adjudication proceedings, Counsel for Puran Singh also appeared and was allowed cross-examination of the appellant on request. The appellant in the reply denied the allegations and maintained false implication. He also alleged that his alleged confessional statement was obtained under coercion and that he retracted the same through telegram followed by a detailed letter to ACMM on 17.9.97. He claimed the lone gold biscuit recovered from the car parked at his residence by alleging that the same belonged to his wife and also claimed Indian currency seized from his residence, but denied his concern with the foreign currency allegedly impounded from his Esteem car searched at the DRI Office.

3. The adjudicating authority on completion of the adjudication proceedings, ordered the confiscation of one gold biscuit, Indian and foreign currency, besides of the two cars, Maruti Esteem and Maruti 800 and also imposed penalty of Rs. 10 lakhs on the appellant. He had also imposed penalty of Rs. 12 lakhs on Puran Singh and Rs. 2 lakhs on Raja.

4. The present appeal has been filed by the appellant alone for the setting aside of the impugned order.

5. The learned Counsel has contended that there is no evidence on the record to prove that the Indian currency recovered from the Maruti Esteem car of the appellant as well as from his house, were the sale proceeds of the smuggled gold. The alleged confessional statement having been procured under duress and coercion had been retracted by the appellant before the ACMM. The Counsel has also contended that according to the Department the appellant was only a courier and the currency recovered from him was the sale proceeds of the gold biscuits which he sold to Raja at the instance of Puran Singh. But none out of these persons has come forward to corroborate this case of the Department. No presumption that one gold biscuit recovered from the Maruti car parked at the house of the appellant, was smuggled one, could be legally drawn under the law. He has placed reliance in support of his contention on the law laid down in Ramchandra v. Collector of Customs, 1992 (60) ELT 277 wherein the conditions required to be satisfied for the violation of Section 121 had been detailed.

6. On the other hand, the learned JDR has reiterated the correctness of the impugned order.

7. We have heard both the sides. We find from the record that the appellant was allegedly apprehended on 4.9.97 in the area Pitampura and his alleged confessional statement was recorded there. But strangely enough no panchnama regarding the recovery of the Indian and foreign currency from his Maruti Esteem car which he was driving at that time, was prepared there. Rather his car was brought to the DRI office and there the alleged recovery of Indian and foreign currency detailed above, had been shown in the panchnama in the presence of two witnesses namely Laluddin and Ahmed who both even have not come forward to face the cross-examination during the adjudication proceedings. Even the perusal of the panchnama shows that both the witnesses did not accept/admit that the recovery of the Indian and foreign currency took place from Maruti Esteem car of the appellant in their presence. The reading of the panchnama reveals that they both were told by the DRI officers regarding the recovery of the currency from the appellant’s car. That being so they cannot be said to be eye-witnesses to the recovery of the alleged Indian and foreign currency from the Esteem car of the appellant. Their statements cannot be used against the appellant having been recorded at his back and they themselves have not come forward to submit themselves for cross-examination to test the correctness of their statements.

8. No sufficient cause has been shown for not conducting the search of the car of the appellant at the spot where many public persons were available at that time to witness the preparation of the panchnama. When the alleged confessional statement of the appellant could be recorded at the spot, why the panchnama regarding the search of the car and the recovery of the Indian and foreign currency from it, could not be prepared. The plea of the investigating officer that the place of interception was not suitable for carrying out thorough examination of the car and for that reason the car was brought to the DRI office for search, does not appeal to the reasons. It is difficult to accept that a public place where many independent persons were available could not be found to be a suitable place for preparing the panchnama regarding the search of the car of the appellant, when his statement was allegedly recorded there. This circumstance coupled with the above detailed facts, goes a long way to throw thick cloud of doubt on the case of the Department.

9. Apart from this, there is no evidence excepting the bald retracted alleged confessional statement of the appellant that the Indian currency recovered from his Esteem car was the sale proceeds of 139 smuggled gold biscuits given to him by Puran Singh for sale to one Raja. According to the Department the appellant in his alleged confessional statement, had admitted that 139 gold biscuits were given to him by Puran Singh on 3.9.97, for delivery to Raja and in lieu thereof the payment in Indian and foreign currency was given to him by Raja, to be delivered to Puran Singh as price of those biscuits. But Puran Singh has at no stage admitted of having given any gold biscuits to the appellant. Even his statement was not recorded. His two wives named above whose statements were recorded had shown their ignorance about these facts. Puran Singh’s Counsel appeared during the adjudication proceedings before the adjudicating authority and sought cross-examination of the appellant which was allowed and in that cross-examination, he has sought to prove that Puran Singh had no such dealing with the appellant. At no stage, the adjudicating authority directed the Counsel to produce Puran Singh for recording his statement to ascertain the true facts.

10. Similarly, Raja to whom the appellant is alleged to have sold the smuggled gold biscuits and obtained the sale proceeds in Indian and foreign currency for delivery to Puran Singh, had not been examined during the investigation or adjudication proceedings. The Department has not even been able to trace him. The appellant has been booked and penalised for having worked as a courier between Puran Singh and Raja for the sale of the smuggled gold biscuits. But in the light of the above referred facts and circumstances, it could not be done for want of any tangible evidence to prove the same.

11. The alleged confessional statement could not be made the sole basis for penalising the appellant under Section 112(b) of the Customs Act. He retracted the confessional statement firstly through telegram dated 10.9.97 followed by a detailed application dated 17.9.97 before the ACMM by alleging that the same had been procured under duress and coercion from him. Even otherwise there is also no evidence on the record to corroborate his statement as observed above. Neither Puran Singh on whose behest he allegedly sold 139 biscuits to Raja had been examined, nor Raja to whom the gold biscuits were sold, had been questioned in that regard. There is no other evidence to corroborate these facts.

The appellant had denied recovery of the foreign currency from his car and no evidence has been collected to prove that it was actually recovered from his car and was the sale proceeds of the smuggled gold biscuits. The panchnama regarding this recovery was not prepared at the spot. It was rather prepared at the DRI office which was situated at a long distance from the place of his interception and both the witnesses of the panchnama named above had not come forward to prove the recovery of the foreign currency from the car of the appellant.

12. Similarly, from the recovery of one gold biscuit from the Maruti car parked at the residence of the appellant and of Rs. 90,000 from his house, no inference could be drawn that the gold biscuit recovered was smuggled one and the currency recovered was the sale proceeds of the gold biscuits. The panchnama regarding this recovery was no doubt got attested from the wife of the appellant besides two witnesses namely Sharad Malhotra and Ms Mala Sameer Khatri, but both these witnesses have not come forward to state that Anita Mahajan, wife of the appellant admitted that the money recovered from the house was the sale proceeds of the smuggled gold biscuits and that the gold biscuit seized from the car recovered was also smuggled one. No statutory presumption in that regard also could be drawn.

13. In Ramchandra case (supra) referred by the Counsel, it has been ruled that for establishing the violation of Section 121, the ingredients required to be satisfied are: (1) there must be a sales, (ii) the sale must be of smuggled goods; (iii) sale must be by a person having knowledge or reason to believe that the goods were of smuggled origin; (iv) the seller and the purchaser and the quantity of the gold must be established by the Customs authorities. None of these conditions in the instant case in the face of the evidence and circumstances detailed above, stands satisfied for holding that the Indian currency recovered from the Esteem car of the appellant as well as from his house alongwith one gold biscuit which was kept in a red pouch lying under the driver’s seat of Maruti Car parked at the residence, were the sale proceeds of the smuggled gold and that the gold biscuit recovered was also smuggled one. Moreover, regarding recovery of Indian currency of Rs. 90,000 from the residence of the appellant, his father-in-law, Babu Ram Mahajan had given an affidavit before the adjudicating authority that this amount was withdrawn by him on 7.8.97 from his account No. 015/01/29660 from the Chartered Bank, Amritsar and that he gave the same to his daughter Anita (wife of the appellant) to make purchases for the marriage of her cousin. There is no evidence on the record to suggest that the contents of his affidavit were found to be untrue after making enquiry from the said Bank and as such could not be brushed aside. No inference from the mere talks between the appellant and Puran Singh on the mobile, as mentioned in the Order-in-Original on various occasions, could be drawn that the money recovered from the appellant from his car as well as from his residence alongwith one gold biscuit, were the sale proceeds of the smuggled
gold biscuits. This was rather required to be proved by the Department by adducing cogent, convincing and tangible evidence, but had failed to do so. The ingredients laid drown in Ramctiandra case (supra) for proving the violation of Section 121 of the Customs Act, do not at all stand proved. Similarly no presumption that the one gold biscuit recovered from the car of the appellant parked at his residence was smuggled one could be drawn under the law.

14. In view of the discussion made above, the impugned order against the appellant regarding confiscation of the entire Indian currency seized from his car as well as residence, one gold biscuit and his two cars (Maruti Esteem and Maruti 800) as detailed therein and the imposition of penalty on him, cannot be sustained and as such, the same is set aside. The appeal of the appellant accordingly stands allowed with consequential relief, if any, permissible under the law.

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