Shri P.K. Jain, Asstt. Collector … vs Ranchhod Kishandas Chhabria on 26 February, 2003

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Bombay High Court
Shri P.K. Jain, Asstt. Collector … vs Ranchhod Kishandas Chhabria on 26 February, 2003
Equivalent citations: 2003 (2) ALD Cri 90, 2003 BomCR Cri, 2004 (163) ELT 418 Bom, 2003 (4) MhLj 384
Bench: A Khanwilkar

JUDGMENT

1. This appeal takes exception to the Judgment and Order dated 3.12.1986 in Case No. 298/CW/1986. The Respondent was charged alongwith one Ramchand Girdharilal for offence punishable under Section 135(1)(a)(ii) and Section 135(1)(b)(ii) of the Customs Act, 1962. The Trial however, proceeded against the Respondent only, as Accused No. 2 remained absconding.

2. The prosecution case in brief is that on 21.8.1985 Ashok J. Ratnani Officer of Customs, Bombay (P.W. 1) and Shri S.V. Sardar, Superintendent of Customs (P.W. 2) and other officers went to the residence of the Respondent. After complying the necessary formalities, search was taken of the premises in which the Respondent was personally present. During the search, certain foreign goods were recovered. Panchanama in respect of that seizure was prepared which is marked as Exh. P-1. It is the prosecution case that while the said search was going on, Accused No. 2 Ramchand Girdharilal arrived at the premises with bag consisting of foreign goods valued at Rs. 5,928/- M.V. with a view to sell the same to the Respondent-Accused No. 1. Even those goods were seized under Panchanama Exh. P-2. According to the prosecution, the Panchanama was drawn and completed in the presence of independent panch Vijaykumar Vadhumal Dayalal (C.W. 1) and Vasant Zarapkar (C.W. 2). The Trial Court on analyzing the evidence on record eventually acquitted the Respondent of the alleged charges. The Trial Court has found that the panchas to the Panchanama were not examined by the prosecution but with a view to render just decision the Court on its own examined those persons as Court witnesses. The Trial Court further observed that there were serious infirmities in the prosecution case. In the first place, that foreign textiles or sarees alleged to have been recovered from the premises of Respondent were not shown to be notified. Besides, the Trial Court found that the prosecution has not shown that the textiles were of foreign origin or were man made or synthetics textiles. It is further observed that the case made out by the prosecution of arrival of Accused No. 2 on the scene at the residence of Respondent with foreign goods for sale is with a view to establish the fact that the Respondent was engaged in doing business of selling foreign goods at his residence. However, there was no evidence to establish the fact t hat the Respondent was engaged in selling foreign goods. Besides, the Trial Court has found that the Panchanamas prepared of seizure at the residence of the Respondent were doubtful because of the scoring and over writing on Exh. P-1. The Trial Court opined that, that was deliberately done with a view to create circumstances against the Respondent accused that the Panchanama commenced at 2.00 p.m., whereas, the earlier noting indicated that the Panchanama was prepared at 4.00 p.m. The Trial Court accordingly took the view that, on taking over all view of the matter, the prosecution has failed to establish the charges against the Respondent-Accused. In the circumstances, the Trial Court acquitted the Respondent by the Judgment and Order under challenge in this appeal.

3. Mr. Satpute for the Appellant contends that the Trial Court was misdirected in acquitting the Respondent. According to him, there was ample evidence on record to return the finding of guilt against the Respondent. He submits that the Panchanama clearly records that the gods seized at the residence of the Respondent were of foreign origin. Even the Respondent in his statement under Section 108 of the Customs Act has accepted the position that the goods seized and as mentioned in Exh. P-1 were foreign goods. The learned counsel further contends that even the P.W. No. 1 and 2 have deposed to the effect that the goods seized from the residence of the Respondent were foreign goods and there is absolutely no cross examination on the factum as to whether said goods were foreign goods or Indian origin. According to him, therefore, the charges have been clearly established beyond reasonable doubt coupled with the fact that the Respondent has failed to adduce any positive evidence to show that the said goods were not smuggled goods as required by virtue of Section 123 of the Customs Act. Mr. Satpute has placed reliance on the decision of the Apex Court reported in 1995 Supp (4) S.C.C. 663 in the case of Naresh J. Sukhawani v. Union of India and Anr., decision in the Case of Surjeet Singh Chhabra v. Union of India and Ors. to contend that the statement made before the Customs officer is not a statement recorded by a Police Officer under Section 161 of Criminal Procedure Code. But, it is a material piece of evidence collected by the Customs Officer under Section 108 of the Customs Act. He has placed emphasis on the observations made by the Apex Court that statement recorded under Section 108 of the Customs Act can be used as substantive evidence connecting the accused with the contravention in question.

4. Mr. Gadkari appearing for the State of Maharashtra has supported the above contention advanced on behalf of the Appellant. On the other hand, Mr. Dhakephalkar for the Respondent contends that the submission canvassed before this court by Mr. Satpute clearly over looks the mandate of Section 135 of the Customs Act. He submits that to attract the provisions of Section 135(1)(1)(a), it was imperative for the prosecution to establish the fact that the goods seized from the residence of the Respondent-Accused were dutiable. It is only then the presumption of evasion of duty chargeable thereon will have to be rebutted by the accused. He submits that the purport of Section 135(1)(a)(ii) has been analyzed by the Apex Court in the decision reported in (1983) 3 Supreme Court Cases 477 in the case of Asstt. Collector of Customs (Prevention), Bombay v. Babu Miya Sheikh Imam and Ors. Reliance has been placed on discussion in Paragraph 4 of this decision to contend that to attract the Section 135(1)(a) in the present case, it was necessary to establish that goods must be goods chargeable with duty and since no such evidence has been adduced by the prosecution, no conviction can be recorded in respect of the alleged charge against the Respondent. He submits that the later part of Section 135(1)(a) will also not apply to this case because the prosecution has not produced any evidence on record to establish the position that the goods possessed by the Respondent were prohibited under the Customs Act or any other law for the time being in force with respect to such goods. He further submits that, Section 135(1)(b) will also not be attracted to this case because the prosecution has not established that the possession of the goods found with the Respondent was in respect of which the Respondent knew that they were liable to be confiscated under Section 111 of the Customs Act. He submits that reliance placed by Mr. Satpute on Section 111(d) and 111(1) also cannot be countenanced because the prosecution has not proved in evidence that the goods found with the Respondent were either prohibited goods or were dutiable goods. He further submits that the reliance placed by Mr. Satpute on two Notifications purported to be dated 20th July 1984 issued in exercise of powers under Sub-section (2) of Section 123 and under Section 11(B) of the Customs Act would also be of no avail because the basic requirement to establish the charge has not been proved in evidence. Mr. Dhakephalkar further contends that this is an appeal against acquittal and the Court ought to be slow in reversing the finding recorded by the Trial Court. Merely because, this court would take a different view of the matter on analyzing the same evidence cannot be the ground for interference. He submits that, there is no manifest error in the conclusion reached by the Trial Court which would warrant interference by this Court in exercise of its appellate jurisdiction.

5. Having considered the rival contentions, I shall first, deal with Section 135(1)(a). As rightly pointed out by Mr. Dhakephalkar, said provision has been analyzed by the Apex Court in the case of Asstt. Collector of Customs (supra). In Paragraph 4 of the said Judgment, the Apex court has analyzed the said provision and observed that the same is structurally divisible into thee parts which reads thus:

“(1) If any person is in relation to any goods in any way knowing concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon, he shall be punishable with imprisonment for a term which may extend to three years or with fine or both.

(2) If any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under the Customs Act, 1962 with respect to such goods, he shall be punishable with imprisonment for a term which may extend to thee years or with fine or both.

(3) If any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under any other law for the time being in force with respect of such goods, he shall be punishable with imprisonment for a term which may extend to three years or with fine or both.”

Interestingly, in the present case, charge as framed would cover the 2nd and the 3rd ingredient which, again, is obviously improper. Inasmuch as, the evasion or attempt at evasion of any prohibition can either be under the “Customs Act” or any other law for the time being in force with regard to such goods. That, is not specifically spelt out in the charge. The charge as framed reads thus:

“That you on or about 21.8.1985 at Greater Bombay, were knowingly concerned in fraudulent evasion or attempt at evasion of the prohibitions imposed under the Customs Act and/or any other law time being in force in relation to foreign made goods as per Panchanama Exh. P-1 and value as Rs. 1,48,274/- at the local market rate seized at Bombay, and thereby committed an offence punishable under Section 135(1)(a)(ii) of Customs Act and within my cognizance.”

Be that as it may, the evidence that has been brought on record by the prosecution is only in the context of the first ingredient referred to above that the Respondent was found to be in possession of goods knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon. There is no evidence brought on record that the possession of those goods or import of those goods were prohibited by some provisions of the Customs Act or any other law for the time being in force. On this count alone the prosecution would fail.

6. We shall now examine the evidence as adduced by the prosecution to bring home the charge of Section 135(1)(a). The evidence that has been pressed into service by Mr. Satpute is of P.W. No. 1 and P.W. No. 2. In their examination-in-chief they have merely stated that the goods found in the premises of the Respondent were of foreign origin without specifying anything further. They have said that it was not a notified place. That there was no observance of accounts or the acquisition or transport vouchers or import documents. There is no assertion or even a suggestion that the Respondent was knowingly concerned in fraudulent evasion or attempt at evasion of the prohibitions imposed under the Customs Act or any other law for the time being in force relation to the goods recovered. To overcome this difficulty Mr. Satpute placed emphasis on the panchanamas and statement of the Respondent purportedly recorded under Section 108 of the Act. On close examination of Panchanama Exh. P-1, the position that emerges is that it records that during the search, foreign made textiles, cosmetics and other items were recovered as per Annexure A and B to the said Panchanama. Whereas, Annexure A and B only indicate the nature of items without giving description thereof or the name of the country where the same has been manufactured etc. Be that as it may, Mr. Satpute placed much emphasis on the statement of Respondent recorded under Section 108 of the Customs Act to the following effect:-

“During the course of search foreign Origin textiles Cosmetics etc. as detailed in the Panchanama, valued at Rs. 49,808/- CIF and Rs. 1,48,27 at M.V. were found from cupboards and suit case, which were lying in the flat.

The above said foreign origin textiles, perfumes etc. were purchased by me from various passengers who come to sell the same at my residence. These passengers regularly visit Dubai and Singapore and bring the goods in their baggage. These passengers have sold these goods to me in piecemeal….”

Even accepting the above version as binding on the Respondent, the same perse would not spell out the offence. In as much as, there is nothing in the statement or even the subsequent questions put to the Respondent that the goods which were found in his possession at his residence were dutiable goods and no duty has been paid or that he had knowledge of the prohibition and was knowingly concerned in fraudulent evasion or attempt at evasion of the prohibition under the Customs Act or any other law for the time being in force. If that is so, then going by the observations of the Apex Court in the case of Asstt. Collector of Customs (supra), the basic ingredients postulated by this provision have not been established in evidence. To put it differently, the evidence adduced by the prosecution including the statement of accused under Section 108 of the Customs Act would only establish the position that certain goods were seized from his residence and some of them were foreign made goods. That however, is not sufficient to attract Section 135(1)(a).

7. Mr. Satpute then contends that Section 12 is a charging section. Further, it clearly provides that “all foreign” made goods are dutiable. It will be apposite to advert Section 12 of the Customs Act.

“Section 12 Dutiable goods – (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from India.

(2) The provisions of Sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government.”

In the first place, the Respondent is facing charge of being knowingly concerned in fraudulent evasion or attempt at evasion of the “Prohibition” and not the first ingredient of this section referred to above i.e. evasion of any duty chargeable. Besides, on plain language of this section, it is obvious that the authorities can charge duty in respect of goods which have been so specified and at the rate mentioned in the Customs Tariff Act, 1975 or any other law for the time being in force for the goods imported into or exported from India. As mentioned earlier the prosecution has not produced any evidence on record to even remotely suggest that the goods which have been recovered from the residence of the Respondent were duty chargeable goods. In that sense, reliance placed on Section 12 of the Act will be of no avail to the Appellant.

8. Mr. Satpute then contends that Section 111 provides for confiscation of improperly brought goods and the goods which has been so recovered from the Respondent have already been confiscated by the authorities by following procedure established by law. This submission clearly over looks that the confiscation proceedings are independent of the criminal prosecution of the accused. In a given case, the goods such as in the present case can be confiscated but that does not mean that the prosecution would succeed on that basis without establishing the basic ingredients to make out the offence during the evidence in the criminal case against the accused. Reliance was placed on Section 111 Clause (d) and (1). However, even that is of no avail to the Appellant. Mr. Dhakephalkar has rightly contended that to attract Section 111(d) or for that matter Clause (1) of that section, the prosecution will have to establish that the goods were prohibited or dutiable goods under the Act or any other law time being in force. As mentioned earlier, since no evidence in that behalf has been brought on record, the question of invoking those clauses in the fact situation of the present case does not arise.

9. Accordingly, I have no hesitation in affirming the conclusion reached by the Trial Court that no offence under Section 135(1)(a)(ii) has been made out against the Respondent.

10. That takes me to the second charge against the Respondent in respect of offence under Section 135(1)(b)(ii). To attract this provision, it is necessary for the prosecution to establish that the accused is in possession or in any way depositing, harbouring, keeping, concealing, selling or purchasing in any other manner dealing with any goods which he knew or reason to believe were liable to confiscation under Section 111 of the Customs Act. To establish the charge under this provision, once again, the prosecution is required to establish that the goods recovered from the Respondent from his residence were dutiable goods or prohibited goods. It is only then the legal presumption would come into play and the burden of proving the fact that the goods so recovered are not smuggled goods would shift on the accused. In other words, the prosecution is required to establish that the goods seized from the accused are not only foreign made goods but also that they were dutiable goods or prohibited goods. In the present case, no evidence has been adduced that the goods found from the Respondent were either dutiable goods or prohibited goods in law. Therefore, even this charge is not established against the Respondent. Accordingly, the prosecution against the Respondent would fail.

11. To my mind, the Trial Court has rightly observed several infirmities in the prosecution evidence and which were striking infirmities so as to give benefit to the Respondent-accused. In view of the above reasoning, the two decisions relied upon by the Appellant to contend that statement of the accused recorded under Section 108 of the Act is substantive piece of evidence would be of no avail.

12. Taking over all view of the matter, I see no reason to interfere with the order of acquittal recorded by the Trial court in favour of the Respondent. This appeal is devoid of merit and the same would fail. Hence, dismissed.

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