Brij Kishore Prasad vs CEGAT

N.S. Singh, J.—In this Custom Reference Case No. 1 (SH) of 2000, the petitioner Shri Brij Kishore Prasad made a prayer for issuance of direction to the Customs, Excise and Gold (Control) Appellate Tribunal, the respondent No. 1 herein to refer to this Court all the questions of law raised and referred to in the petition, available in relevant paragraph of Annexure ''B'' arising out of the impugned judgment and order dated 13-3-2000 passed in Appeal No. C-191/96 u/s 130A of the Customs Act, 1962 and Rules made thereunder coupled with a prayer for quashing the entire proceedings and related orders passed by the Commissioner of Customs (Preventive) N.E.R., Shillong and the impugned judgment dated 13-3-2000 passed by the Customs, Excise & Gold (Control) Appellate Tribunal, respondent No. 1 herein. On the motion of the petitioner, this Court by an order dated 14-12-2000 issued notice upon the respondents to show cause as to why the respondents particularly, the Appellate Tribunal, would require to refer the questions of law rather, substantial questions of law as contended and raised by the applicant-petitioner in this Reference Petition but, despite of the notice served upon them, no reply is received from the respondent No. 1 and that being the position, this Court took up this matter for final disposal on its own merit keeping in view of the fact that the original custom case is of the year 1996 and, accordingly, this Reference Case is finally disposed of with the following judgment and order.

The facts of the case in a short comings are as follows :

On 18-1-1995, the officers of Customs, Shillong during surveillance intercepted one tourist taxi. Apart from the driver of the taxi, there were four other passengers. On personal search of the said four passengers, the same resulted the recovery of eight adhesive wrapped packets containing 24 Nos. of gold bars, each weighing 10 tolas, from secret cavities of the shoes worn by them. Each passenger concealed two packets one packet in each shoe and each packet contained three foreign gold bars. The gold bars were having foreign markings on them. Some incriminating documents were also recovered from one of the passengers. On enquiry, four passengers disclosed their identity as :-

(i) Shri Prem Prakash

(ii) Shri Binod Kumar Shah

(iii) Shri Anil Kumar Gupta

(iv) Shri Lal Babu Prasad

Nothing was recovered from the personal possession of the driver. As the said persons could not produce any document showing the licit acquisition and possession of the said gold bars, the same were seized by the Officers under the provisions of the Customs Act along with other incriminating documents and the adhesive tapes, the wrappers and the shoes.

During post-seizure investigations, the statements of the said four persons along with the driver were recorded. Statement of these persons were recorded while they were in the custody of the Customs Preventive Officers of Shillong right from the time (around 9.00 p.m. on 18-1-1995) of interception of the vehicle till they were produced on 21-1-1995 before the Id. Magistrate who remanded the four persons to judicial custody.

According to the Revenue, the gold bars have been purchased by one Prem Prakash from the present petitioner-applicant on payment of Rs. 12,60,000/- and the premises of the applicant-petitioner, which were under the joint occupation of the petitioner and his three brothers namely, Raj Kumar, Gopalji Shah and Ashok Kumar were searched resulting recovery of the Indian Currency of Rs. 12,60,000/- and further amount of Rs. 8,59,500/- along with some documents and records and those Indian currencies were seized by the officers on the reasonable belief that the said money represented the sale proceeds of the smuggled gold biscuits and, accordingly, these were confiscated under the impugned orders of the Commissioner of Customs and in that regard, appeals were filed by the concerned persons including the applicant-petitioner. The Appellate Tribunal, respondent No. 1 had released the Indian Currency of Rs. 8,59,500/- belonging to three brothers of the applicant-petitioner but, the learned Tribunal found that Shri Prem Prakash was the purchaser of gold biscuits in question and whereas. Shri Brij Kishore Prasad, the applicant-petitioner is the seller of the same and the value of the gold is to the tune of Rs. 12,60,000/- and, at such, the learned Tribunal imposed penalty of Rs. 1,00,000/- upon them. Being dissatisfied with the impugned judgment and order of the learned Tribunal, the petitioner-applicant filed this Reference Case.

The other parties including Shri Prem Prakash did not question the validity of the learned Tribunal''s judgment and order dated 13-3-2000. For just determination of the real points in controvercy between the parties, we took up the following questions of law.

(i) Whether the Indian Currency of Rs. 12,60,660/- is liable to be confiscated u/s 121 of the Customs Act; and whether, penalty of Rs. 1,00,000/- imposed is reasonable or not in the facts and circumstances of the case?

Mr. A. Bhattacharjee, learned Counsel appearing for the petitioner submitted that during the post-seizure, investigation, statements of various persons including the present petitioner-applicant were recorded on various dates and the applicant and his brothers along with their family members were not present in the house at the time of search of their residential premises where-from the Indian Currencies were recovered and the statements of various persons present at the time of search of the premises were recorded and all these statements were later on retracted in sworn affidavits before a Magistrate stating that the said statements were taken under threat and coercion and the caretaker Shri Ram Kishan Prasad of the applicant''s residential premises even submitted an application dated 24-1-995 to the Collector of Customs (Preventive) that various statements have been got recorded from him under duress, threat and coercion and these important facts in existence and evidences on record were not properly considered and examined by the respondents-authorities while passing the related impugned orders. The learned counsel also contended that even in the statement of Shri Prem Prakash recorded on 30-1-1995 shows that the gold biscuits in question were not purchased by him form Shri Brij Kishore Prasad, the applicant herein but the same were purchased from one Vola Prasad of Chapra. According to Mr. Bhattacharjee, learned counsel, in any case the foreign marking on the gold by itself, is not a proof of the same having been smuggled and even assuming that the goods were of foreign origin, that fact, ipso facto, in the absence of any other evidence, would not make the gold bars liable to confiscation. Supporting his contention, the learned counsel rolled upon a decision of the Gujarat High Court rendered in Assistant Collector Customs and Another Vs. Mukbujusein Ibrahim Pirjada, The learned counsel went on to contend that the findings regarding voluntary and truthful character of the statements of various persons dated 18-1-1995, 19-1-1995 and 20-1-1995 are illegal, based on surmises and conjectures and without any evidence in support of it and the learned Tribunal has also ignored answers to question to 16 in Shri Prem Prakash''s statement dated 30-1-1995, his affidavit dated 28-1-1995 and the sworn affidavit dated 11-8-1995 which refers to his complaint dated 24-1-1995 addressed to the Commissioner of Customs (Preventive), Shillong regarding extraction of statements from him under coercion, threat and duress and; the learned Tribunal had completely mis-appreciated and misconceived the evidence particularly, the statements of the (four) passengers. Supporting the case of the petitioner-applicant. Mr. A. Bhattacharjee, learned counsel contended that the learned Tribunal had completely ignored the vital evidence of retraction of Ram Kishan Prasad, and the case of the petitioner that he had left Shillong around 3 p.m. of 18-1-1995 to catch Abodh Assam Express for Chapra leaving Guwahati around 9.30 p.m. in Maruti Van of C.S. Sawhnile (sic) along with his family and his caretaker Shri Ram Kishan Prasad. There is no evidence on record for establishing the fact that the said currency of Rs. 12,60,610/- is the sale proceeds of 24 gold bars recovered from the said Shri Prem Prakash and his co-passengers and, therefore, the findings of the respondents are perverse being based on non-consideration of relevant materials and, apart from that, Revenue has simply assumed that the gold seized is smuggled because it carries foreign marking and is of high purity but there is no evidence on record not even a whisper of it that the gold in question was illegally brought into the country.

At the hearing Mr. P. Dey, learned Additional C.G.S.C. contended that the said Indian currency of Rs. 12,60,000/- is liable to be confiscated u/s 121 of the Customs Act, 1962 and the same has been rightly upheld by the Appellate Tribunal and the penalty of Rs. 1,00,000/-was imposed by the Adjudicating Authority after taking into consideration of the nature of the offence committed by the petitioner "which was also upheld by the Tribunal and there is no infirmity in it. There is sufficient materials on record to establish the fact that the said Indian Currency of Rs. 12,60,000/-is the sale proceed of 24 Nos. of gold biscuit which has been smuggled and is being termed as smuggled goods. There are corroborated statements including the voluntary statements of Shri Prem Prakash dated 18-1-1995, 19-1-1995, 204-1995 and 30-1-1995 recorded u/s 108 of the Customs Act, 1962 which establish the fact that 24 Nos. of gold bars belong to Shri Prem Prakash and he had purchased the same on 18-1-1995 from the petitioner Shri Brij Kishore Prasad on payment of Rs. 12,60,000/- and as such, this Court should not interfere with the findings of the respondents authority in the instant case.

Now this Court is to see and examine as to whether the petitioner-applicant could make out a case to justify the interference with the impugned judgment and order passed by the respondents authority or not, and whether, the petitioner-applicant is entitled to get the relief as sought for in this case or not ?

The Commissioner of Customs confiscated 24 Nos. foreign marked gold biscuit after arriving at a finding that the same were smuggled and not the Indian Currency of Rs. 12,60,610/- recovered from the residence of the applicant-petitioner. Shri Brij Kishore Prasad was also confiscated by holding the same to be the sale proceeds of 24 Nos. of smuggled gold bars and also Indian Currency of Rs. 8,89,500/- recovered from the common office premises of the three brothers mentioned above, was also confiscated being the sale-proceeds of smuggled gold and personal liabilities in the form of penalty were also imposed upon those individuals including the applicant-petitioner Shri Brij Kishore Prasad and in his case penalty of Rs. 1,00,000/- was imposed. However, the Appellate Tribunal under its related judgment and order affirmed this absolute confiscation of 24 gold biscuits and order of confiscation of Indian Currency of Rs. 12,60,610/- but confiscation of Rs. 8,89,500/- was set aside and the same had been ordered to be released and personal penalty of Rs. 1,00,000/- imposed on each of Shri Prem Prakash and Shri Brij Kishore Prasad had been confirmed and personal liabilities of Shri Binod Kumar Shah, Shri Anil Kumar Gupta and Shri Lal Babu Prasad had been reduced to a sum of Rs. 10,000/- only from Rs. 25,000/-.

The case of the Revenue is that on 18-1-1995, the officers of Customs mentioned above intercepted one tourist taxi and, on personal search of 4 (four) passengers mentioned above which resulted the recovery of 24 Nos. of gold bars which were procured by Shri Prem Prakash from the applicant-petitioner Shri Brij Kishore Prasad on payment of Rs. 12,60,000/- but the respondent''s confiscated initially Rs. 12,60,610/- plus Rs. 8,89,500/- by holding that the same to be sale-proceeds of smuggled gold. However, the Tribunal ordered for release for the said sum of Rs. 8,89,500/-. A question arises at this stage that how the respondents arrived to its conclusion that the Indian Currency of Rs. 12,60,610/- recovered from the residence of the applicant-petitioner Shri Brij Kishore Prasad in his absence from his residence, is the sale-process of 24 Nos. of smuggled gold bars and, why the respondents confiscated the said amount which is not tallied with the alleged sale-proceed of the alleged 24 Nos. of smuggled gold bar and, how the authority could recover another Indian Currency of Rs. 8,89,500/- from the possession of the individuals, concerned knowing fully well that their case is that the said Prem Prakash procured the said smuggled gold biscuits at the cost of Rs. 12,60,000/-. In our considered view, the respondents authorities had failed to establish the fact that the said sum of Rs. 12,60,610/- recovered from the residence of the applicant-petitioner has nexus or connection with the seizure of the alleged 24 foreign marked gold biscuits. It may be mentioned herein that for establishing a case against the petitioner-applicant, certain conditions are to be fulfilled which are as follows :

(A) There must be a sale,

(B) A sale must be of smuggled goods,

(C) A sale must be by a person having knowledge or reason to belief that goods were of smuggled origin; and,

(D) The seller and purchaser and quantity of gold must be established by the Customs Authority.

In this regard, a reference can be made to a decision rendered in Ramchandra v. CC, reported in 1992 (60) E.L.T. 277 Tri..

From the available materials evidence on record, it is seen that Shri Prem Prakash acquired the said gold bars from one Shri Bhola Prasad not from the present petitioner Shri Brij Kishore Prasad and the said Shri Prem Prakash specifically given the identity and address of the said Shri Bhola Prasad of village - Dahlawa, District Chapra as seen in his statement recorded by the authority on 30-1-95 which has been relied by the respondents at the time of disposal of the related cases before them. It may also be mentioned that the name of the present applicant-petitioner does not find its place in the said statement of Shri Prem Prakash recorded on 30-1-95 but the Revenue claimed that the money so far recovered from the residence of the applicant-petitioner is the sale-proceeds of the said smuggled goods/gold. Apart from this, the applicant-petitioner Shri Brij Kishore Prasad stated that the Indian Currency of Rs. 12,60,610/- which was recovered from his residential premises is the sale-proceeds of rice for the period from 18-7-1994 to 18-1-1995 and the same was to be paid to the rice-supplier, Shri Collinstar Swakmie, for supply of rice during the period from 18-7-1994 to 7- ...1994 in 17 (seventeen) consignments and according to the petitioner, the other currency note of Rs. 8,89,500/- recovered from the other room belonging to his three brothers who, accumulated it as sale-proceeds of their grocery shop. According to us, this important evidence and material on record was not properly examined by the respondents authority at the time of passing the impugned orders. It may further mentioned that Shri Ram Kishan Prasad, Caretaker questioned the validity of his statement recorded by the authority in consecutive 4 (four) days i.e. from 19-1-1995 to 22-1-1995 by way of retraction and filing complaint on 24-1-1995 along with supporting affidavit which was also not properly considered by the respondents authority. The alleged consideration price/sale proceeds as relied by the authority/Revenue is quite different from the money recovered from the premises of the applicant-petitioner. Therefore, the authority could not prove about the sale of smuggled goods i.e., the gold bars by the applicant-petitioner to Shri Prem Prakash.

The next question arises as to whether the statements of other co-accused persons recorded on 18-1-1995 and 29-1-95 can be considered as voluntary and truthful or not ?

From the available materials on record, it is also seem that they were intercepted and have been in custody of the authority from 18x1-1995 and they were produced before the Magistrate on 21-1-1995 but the authority shown the factum of their arrest on 20-1-1995 at 1400 hours and if that be the case, another subsidiary question arises namely, where those accused persons were lodged after being arrested or intercepted on 18-1-1995 at about 9 p.m. on apprehension of the said tourist taxi at Shillong. Therefore, in our considered view, the statements of these co-accused persons have lost its evidentiary value due to detention beyond 24 hours insulting vitiation of the related proceeding. In this regard, a reference can be made to a decision reported in Suaibo Ibow Casamma Vs. Union of India, In perusal of the available materials on record shows that after arrest of the above mentioned 4 (four) persons and their prolonged custody, none of them including Shri Prem Prakash was asked to specify denominations of the total currency said to be seized from the possessions and/or custody of the applicant-petitioner Shri Brij Kishore Prasad but on the following date, i.e. on 19-1-1995 the sum of Rs. 12,60,610/-was recovered by the authority from the residence of the applicant-petitioner at about 7 a.m. of the day and the denomination of currency was made to be reflected in the statement dated 19-1-1995 which obviously speaks of a device adopted by the Customs authority to tally the amount from the month of the statement giver Shri Prem Prakash. However, the fact remains that the alleged sale-proceeds is Rs. 12,60,000/- and whereas, the money recovered from the residence of the applicant-petitioner is Rs. 12,60,610/- which are not tallied. The statement of one. Shri Bimal Roy, who was not impleaded as a ''noticee party'' had been relied on and/or referred to in the order which is totally had in law and not admissible u/s 138B of the Customs Act, 1962 since he was not examined in the proceeding by the Adjudicator-Commissioner. We are also in doubt that whether the gold in question is smuggled or not as it has not been recorded in the inventory list that the gold bars seized were smuggled goods and were liable to confiscation under the related provisions of Customs Act, 1962 and in addition to it, according to the liberalised gold policy of the Government of India since 1992, imported gold diverted into market''s through legal channels and probably, the said Shri Prem Prakash acquired the goods from the said Shri Bhola Prasad whose identity has been shown in his statement recorded on 30-1-1995 which shows that the said gold was procured by Shri Prem Prakash from the said Shri Bhola Prasad but not from the applicant-petitioner.

This Court need not go more into depth as suffice is made with the above observations for holding that the said Indian Currency of Rs. 12,60,610/- recovered by the authority is the personal property of the applicant petitioner Shri Brij Kishore Prasad which was illegally recovered or seized by the authority without any justification and, the entire proceedings lodged and initiated against the applicant-petitioner Shri Brij Kishore Prasad is bad in law as the same was done without following the procedural standard of law and, accordingly, it is quashed with the direction to the respondents to return/refund the said amount of Rs. 12,60,610/- seized and recovered by the authority to the petitioner-applicant Shri Brij Kishore Prasad along with the sum of Rs. 50,000/- pre-deposited by the applicant-petitioner pursuant to the related impugned order of the Appellate Tribunal immediately. However, it is made clear that this Court is not interfering with the confiscation of the said 24 Nos. of gold bar from the possession of the other co-accused persons and the imposition of penalty etc. to other co-accused persons except the petitioner-applicant under the related orders of the Commissioner of Customs, Shillong and the Appellate Tribunal.

For the reasons, observations and direction made above, this Reference Case is hereby closed and disposed of. No order as to costs.