ORDER
R. Jayaraman, Member (T)
1. This appeal is against the order of the Additional Collector of Customs (Preventive), Bombay bearing No. S/14-4-724/80 PINT dated 30-3-1982 imposing a personal penalty of Rs. 5,000/- on Shri S.A. Thete under Section 112 of the Customs Act
2. The findings of the Addl. Collector with regard to Shri Thete are briefly summed up below.
3. (i) It is an admitted fact that Shri Thete also comes under same panchnama which inculpated Shri Shaikh. In front of the panch witnesses, Shri Thete asked Shri Shaikh to be honest enough to admit that the brief case contained wrist watches. This knowledge on the part of Shri Thete negates straightaway his claim in his deposition that he was not aware that the brief case contained contraband wrist watches. The defence cross-examination of the panch witness Shri Gangoli made on behalf of Shri Shaikh, though helps to an extent Shri Thete, Shri Gangoli corrected himself and stated that Shri Thete had asked Shri Shaikh to be honest enough to state the contents of the black brief case. Even in the revised version of the witness, the prior knowledge of the contents of the brief case on the part of Shri Thete is evident.
(ii) The second evidence against Shri Thete is the claim made by Shri Shaikh that he has sought the help of Shri Thete and in fact had advised Shri Thete that the bag contained contraband which he sought to remove with the help of Shri Thete. Though Shri Shaikh has written a letter from the Jail contradicting his initial statement and clearing Shri Thete of the inculpation made by him in the affair, subsequently he kept on inculpating Shri Thole. The Addl. Collector has observed that despite his retraction written from the jail, it is still capable of lending some corroboration to the allegation that Shri Thete was aware of the contents of the brief case.
(iii) Three more seizures were made in the proximity of Shri Thete of which one was made from the bath room, the other from his residence and the third from the upstairs of open terrace of his residential premises In all these cases, though Shri Thete has disowned … and ownership of the goods, his very proximity in all these seizures itself lends a certain strength to the presumption that Shri Thete has something to do with these-goods. Though by itself these three independent seizures have not sufficient probative value but has remote piece of evidence, they do corroborate the knowledge and the strength of mind behind which were shown by Shri Thete before the panch witnesses at the time of seizure of the brief case. The admission made by Shri Shaikh that Shri Thete helped him itself is the point to the fact that Shri Thete was aware of the contents of the black brief case. Although on the basis of the evidence, it cannot be established with any degree of certainty that Shri Thete did acquire or did himself bring the contraband, the evidence available indicates that Shri Thete was aware of the contents of the brief case and that it was with the knowledge he has offered to transport Shri Shaikh on his scooter.
4. Thus with the above findings, the Addl. Collector has imposed a personal penalty on Shri Thete.
5. The learned Counsel for the appellant, Shri Menon sought to rebut everyone of the findings of the Addl. Collector. His arguments can be briefly summed up as below:
The allegation made in the show cause notice that Shri Thete told the Customs Officers at the point of interception “Jane do, isme lapde ka mal hai” is not established by any evidence on record. The panchnama drawn for the seizure of the wrist watches clearly indicates that in the first instance Shri Shaikh had admitted that the brief case contained wrist watches. Hence the need for prompting by Shri Thete as indicated in the latter part of the panchnama directing Shri Shaikh to be honest enough to declare the contents of the brief case as containing watches is not believable or convincing. Cross-examination of panch witnesses reveals that even this statement alleged to have been made by Shri Thete directing Shri Shaikh to declare honestly the contents of the brief case as watches has been modified to the extent that the direction was only to declare honestly the contents. Such a statement on the part of Shri Thete cannot be pitted against him as having knowledge of contents of the brief case. Though Shri Shaikh has clearly indicated in his initial statement that the suit case was collected by him from a passenger by name Abdul-la and Shri Thete was not aware of the contents, he subsequently modified to implicate Shri Thete also. His subsequent implication of Shri Thete has also been retracted by his letter dated 4-9-80 written from the jail i.e. immediately two days after his earlier statement. Hence Shri Shaikh’s subsequent stand putting the entire blame on Shri Thete is wholly unreliable and he is a co-accused in this case and even in his evidence, there is no consistency. When the adjudicating authority had already cleared Shri Thete with regard to three other seizures, it is not correct on his part to co-relate Shri Thete with the wrist watches in question and the knowledge thereof to Shri Thete. It was also submitted that in the prosecution of the case launched by the Department against the appellant he has been acquitted on merits and hence in terms of decision reported in 1987 (32) ELT 640 (Mad.) Aboobakarv. Secretary of the Govt. of India, the verdict of the court is binding even In regard to the departmental proceeding. On conclusion of his arguments, the learned counsel posed the following three issues:
(i) Is it permissible for the adjudicating authority to draw an inference from the circumstances from which the party has been absolved?
(ii) When there is no material, other than the statement of the co-accused, which itself is not consistent, whether the adjudicating authority is right in finding corroboration in the statement of the co-accused?
(iii) Whether in view of the verdict of the Criminal Court, acquitting Shri Thete on merits, the Departmental authorities can hold a different view?
6. Shri Mondal, SDR, appearing on behalf of the Collector argued that there is no dispute that Shri Thete was intercepted just outside the Airport. There is no dispute about the fact that Shri Shaikh was holding the brief case, from which wrist watches and sarees were recovered. Prior knowledge of Shri Thete is evident from the statement of Shri Shaikh. Although the Additional Collector has absolved Shri Thete of his ownership of the three seizures, his conduct is evident that even after signing the panchnama in his residential premises, he denies his presence during the search of his house. Hence the Addl. Collector is entitled to draw adverse inference with regard to three seizures having proximity of Shri Thete to the goods. Though these seizures do not have probative value fixing ownership on Shri Thete, they have proximity value and the Addl. Collector is right in drawing adverse inference about Shri Thete. He cited the judgment of the Kerala High Court in Kallathara Abbas case reported in 1984 (15) ELT 129 and also appeal No. 247/82 decided against Shri Shaikh involved in the same case by the Bombay Tribunal. He also argued that the confiscation of the scooter is justified in as much as it is admittedly owned by Shri Thete and as per the finding of the Addl. Collector, he had offered to transport the contraband in his scooter with prior knowledge.
7. We have considered the submissions made on both the sides. Before going into the issues posed by the learned counsel for the appellant, it would be necessary to set out briefly the facts of the case which are not disputed. Shri S.A. Thete was Sub-Inspector of Police doing Immigration duty and clearing the passengers at the International Airport, Bombay and Shri Shaikh was Head Constable (Writer) working along with Shri S.A. Thete. On the crucial date the officers of Customs attached to Air Intelligence Unit (AIU) intercepted Shri S.A. Thete riding on his scooter with Shri Shaikh on pillion carrying a black colour brief case. From the said brief case wrist watches of foreign origin and saree materials were recovered. As a follow-up on this recovery, residential premises of Shrt Thete were also searched which resulted in seizure of foreign liquor bottles and a blue film. Subsequently on information the terrace of the building where Shri Thete’s residential flat is located was searched which resulted in recovery of two speakers of foreign origin.
8. Now coming to the facts which are disputed they can be identified as below:
According to the Department, when the scooter was intercepted by the Customs Intelligence Officers, Shri Thete told them:
“Janedo Isme lapdeka mal hai” (in Hindi).
Shri Thete also directed Shri Shaikh before panch witness and other officers to tell the Customs Officers honestly that the brief case contained watches. Shri Shaikh, however, implicated Shri Thete as the officer whose help was sought by him to remove the brief case handed over to him by Shri Abdulla – the said Abdulla having been cleared at the Immigration by Shri Thete. The said passenger Abdulla who was traced subsequently, has dis-owned having given any brief case to any Police Officer for delivery outside.
9.1. In the context of the position of admitted facts juxtaposed with the facts not admitted by the appellant, the issues raised by the learned counsel are required to be considered:
9.2. First issue raised by the Counsel: – Is it permissible for the adjudicating authority to draw adverse inference from the circumstances from which the party has been absolved. Though this issue is raised in general terms by the counsel, in this case, as is seen from the order of the Addl. Collector, it is to be construed whether the Addl. Collector of Customs is entitled to draw an adverse inference about the conduct of Shri Thete based on his proximity to three seizures, and on that basis attribute prior knowledge on the part of Shri Thete with regard to the contents of the brief case. The Addl. Collector in his order has indicated that though by itself the three independent seizures have no sufficient probative value for fixing the ownership on Shri Thete, they have remote piece of evidence against Shri Thete with regard to the knowledge and the strength of mind which were shown before the panch witnesses at the time of seizure of the brief case. It is an admitted fact that as a sequel to the interception and recovery of wrist watches on the crucial date, three seizures have been effected – one from the toilet immediately after Shri Thete visited the same, another from his residential premises where he was taken from the Airport by the Customs Officers and the third One from the terrace of the building, where the residential flat of Shri Thete is located. In all these cases, the Addl. Collector had absolved Shri Thete of the ownership based on tbe factors discussed in the order. Ail the same, the presence of foreign goods, foreign currency etc. and recovery thereof have been held to be proximate to Shri Thete. This observation of the Addl. Collector can be taken to mean that the Addl. Collector has drawn adverse inference about the conduct of Shri Thete. We also observe that with regard to the seizure of foreign liquor bottles and blue film from his residential premises, it is seen from the records as well as from his own statement that he was taken to his residence and search was carried out. Shri Thete has also attested panchnama and the list of articles recovered. Despite this, in his statement, he has chosen to depose that they were not recovered from his residence and he also does not want to say anything about the presence of these liquor bottles. Subsequently one of his relatives files an affidavit and claims only foreign liquor bottles. The mystery of the presence of blue film still remains unsolved, and the key of the mystery can only be with the occupants of the house and Shri Thete is the owner of residential premise. Likewise in regard to other two seizures the proximity of Shri Thete is discernible, though he has totally dis-owned any connection with those goods. The same method had been adopted even in regard to the recovery of the watches covered by this appeal. However, in this case, Shri Thete has been intercepted on the spot while riding the scooter along with Shri Shaikh carrying the black brief case sitting on the pillion. Immediately thereafter in front of the panch witness and the officers of the Police as well as the Customs, he is found to have told Shri Shaikh to declare the contents of the box as watches honestly. Though this is rebutted vehemently, Shri Thete’s initial statement on this, when confronted with panchnama and on a specific question he admits that he has made this observation with a modification suggesting to Shri Shaikh to declare whether the brief case contained watches etc. In those three seizures there was no corroborative evidence even in the form of statement of accomplice In this case, the persons involved are two in number and the other person has clearly inculpated prior knowledge of Shri thete apart from owning up his own role. The question to be looked into is whether the Addl. Collector is justified in drawing adverse inference on the conduct of Shri Thete in regard to the denial of prior knowledge of the presence of watches in the brief case in this case, having regard to his conduct in denying knowledge about the goods involved in the three other seizures, where his proximity is discernible otherwise. In this context, we are reminded of the adage normally quoted for judging the conduct of a person. If a behaviour is noticed once, it can be dismissed as an accident. If it happens twice, it can be still a coincidence and if it happens thrice it can only be his habit and conduct. In this case, Shri Thete’s proximity is discernible in all the three independent cases and in the absence of corroboration, has chosen to disown his knowledge in respect of the goods to get out of the predicament. However, in regard to seizure of wrist watches, he has been apprehended at the spot along with contraband. Even then, he has the strength of mind to disown knowledge about it, which was not found acceptance by the Addl. Collector, because of other circumstances namely his own statement directing Shri Shaikh to declare honestly the contents of the brief case as watches and the deposition of Shri Shaikh clearly inculpating Shri Thete. We, therefore, are of the view that the findings of the Addl. Collector cannot be assailed on this ground and accordingly answer the issue posed by the learned counsel.
9.3. The second issue posed by the counsel whether the adjudicating authority is justified passing his adjudication order only on the statement of accomplice, which is also not consistent. In this connection, we are to again go to the admitted facts. In this case, only two persons are involved and any knowledge with regard to the contents of the brief case is within the exclusive preserve of these two persons. Of the two, Shri Shaikh has clearly inculpated Shri Thete apart from incriminating himself. It is not a case that Shri Thete was brought from somewhere else and he was implicated. He was caught at this spot while riding on a scooter carrying Shri Shaikh on a pillion with the box containing contraband. In such a situation the statement made by an accomplice in regard to the prior knowledge of Shri Thete cannot be dismissed altogether. It is argued by the counsel that this statement of Shri Shaikh was subsequently retracted, while he was in the prison through a letter to the Collector of Customs. In this letter, Shri Shaikh has exonerated Shri Thete of prior knowledge. Shri Shaikh seeks to give an explanation that this letter was written under duress under instructions of Shri Thete, while both of them were in the jail. This version of Shri Shaikh appears more probable in the facts and circumstances of the case – particularly Shri Thete did not deny his being in the jail along with Shri Shaikh. This also finds support in the subsequent stand of Shri Shaikh himself.
9.4. Moreover, the other circumstances, which in our view, lend considerable support to the prior knowledge on the part of Shri Thete can be identified as below:
(i) Shri Thete has picked up the particular immigration card of Shri Abdulla, while presenting many immigration cards bearing the name of Abdulla and indicated that was the person referred to by Shri Shaikh.
(ii) Shri Abdulla referred to be Shri Shaikh had been cleared by Shri Thete,
(iii) After clearance work was over, both of them have left the Arrival Hall – Shri Shaikh carrying the brief case, sitting on the pillion, while Shri Thete riding the scooter, taking a route which is not normal.
(iv) Their interception together along with the contraband by the officers of the Customs,
(v) Follow up seizures of foreign articles and foreign currencies showing proximity to Shri Thete,
(vi) Even in the initial statement of Shri Thete, while denying prior knowledge about the contents of the suit case, he comes out with a modified version admitting that he asked Shri Shaikh to declare whether the brief case contained watches etc. Unless Shri Thete had prior knowledge that the brief case contained watches, he would not have mentioned “watches”. He would have mentioned gold or any other contraband. Specific mention of ‘watches’ in his initial statement itself shows his prior knowledge.
In view of the aforesaid circumstances duly corroborating the version of Shri Shaikh that Shri Thete had prior knowledge about the contents of brief case, the findings of the Addl. Collector in relying on the version of the accomplice is sustainable in the adjudication proceedings. The learned S.D.R. has also referred to the judgment of the Kerala High Court in Kollathara Haji Abbas v. Govt. of India and Ors. reported in 1984 (15) ELT 129. In this judgment it has been held by the Kerala High Court that even if the statement of co-accused is liable to be criticised, they are of sufficient evidenciary value for purposes of coming to a conclusion against the petitioner in the departmental proceeding. Considering the facts and circumstances of the case as discussed above, the evidenciary value of the accomplice in this case in the departmental proceedings cannot be dismissed or overlooked and accordingly we answer the second issue that the Addi. Collector is justified in relying on the statement of the accomplice.
10. Now coming to the third issue, the learned counsel for the appellant argued that in the context of the judgment of the Madras High Court 1987 (32) ELT 640 in case Aboo Bakar v. Secretary to the Govt. of India, the verdict of the Court acquitting the accused in the criminal prosecution proceeding is to be taken as conclusive and the orders of the adjudicating authority holding a different view is not tenable. On this, we invite the attention of the learned counsel to the judgment of Division Bench of the Bombay High Court in the case of Maniklal Pokhraj Jain v. Collector of Customs (Prev), Bombay and Ors., 1986 (26) ELT 689 (Bom). This judgemsnt clearly answers this issue. This judgment is based on the judgment of the earlier Division Bench which has been approved. We would therefore prefer to extract the observations of the Division Bench as below, which squarely answers the issue reised by the Counsel:
“15. Section 112 is an express provision which authorises the levy of penalty in respect of acts or omissions referred to therein. The procedure with regard to adjudication of confiscation and penalties is expressly provided for in Section 122 of the Act. The power to be exercised by the Collector of Customs or Deputy Collector of Customs or by an Assistant Collector of Customs or by Gazetted Officer of Customs lower in rank than an Assistant Collector of Customs is in accordance with the value of the goods liable to confiscation. The procedure to deal with confiscation or imposition of penalty is prescribed in Section 124 and under that provision a notice in writing has to be given to the concerned person informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty, and he is to be given a reasonable opportunity of being heard in the matter. Then comes Section 127 which expressly provides that even though an order of confiscation and an order of penalty is made by the Customs Officer, that does not affect the liability to punishment under the provision of Chapter XVI or under any other law. We already reproduced the provisions of Section 135 which make it pointedly clear that the power to prosecute under Section 135 is without prejudice to the action which may be taken independently under the provisions relating to confiscation and penalty. Now, it cannot be the argument that while independent powers of making an order of confiscation and penalty can be made by the appropriate officer of the Customs, irrespective of a prosecution under Section 135 being resorted to or not, in case there is a prosecution and there is an acquittal, the power expressly bestowed under Section 112 must be treated as ineffective. Unless we are able to hold that even in spite of the express provisions of Section 112 and Section 127, in case there is an acquittal in prosecution instituted under Section 135, their powers cannot be exercised, the contention on behalf of the Petitioner could not be accepted. We see no warrant for the view that there is a prohibition against the Customs Officers to perform their statutory functions and exercise their statutory power under the Act because of a failure of the prosecution started under Section 135 and the acquittal of the person concerned. By its very nature, the two proceedings are independent of each other. In a given case, evidence which may be available for the purposes of proceedings under Section 112 may not be available or even if it is available, it may be admissible in regular Court of law, in which the admissibility and relevance of the evidence is determined with reference to the provisions of the Evidence Act. In a Criminal prosecution the accused need not open his mouth nor make any statement while in the proceedings for adjudication or confiscation before the Customs Department, the statement made by the person from whom the contraband articles were seized can be looked into. The scheme of the Act, therefore, clearly indicated that the two proceedings have to be dealt with independently of each other on such material as is available and permissible in these proceedings”.
11. Thus on all the three issues raised by the learned Counsel for the appellant we find that there is no merit in favour of the appellant. Accordingly, we dismiss this appeal and uphold the order of the Additional Collector imposing the penalty on the appellant.
12. Though no arguments were made with regard to the confiscation of scooter of Shri Thete during the hearing, this had been referred to in the appeal memorandum. The learned S.D.R. has argued justifying the order of confiscation in view of the fact that the Addl. Collector’s findings are to the effect that Shri Thete had offered to transport the contraband with prior knowledge. Since the confiscation of the scooter has not been contested during the hearing, we uphold the order of confiscation.
13. Before parting, we would like to place on record the fact that the counsel for the appellant, Shri Menon was informed before the commencement of the hearing that one of the Members (Shri K. Gopal Hegde) had already decided the appeal filed on behalf of Shri Shaikh and in the said order certain observations have been made with regard to the present appellant. In view of this, the counsel was informed that the member (Shri K. Gopal Hegde) would not like to associate with the proceeding and the appeal would be heared by the other Member (Shri Jayaraman). Shri Menon, however, insisted that the case may be heard by the Bench consisting of both the Members and his request was therefore complied with.