TMI Blog2011 (8) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 112 of the Act. The Tribunal in its order dated 10.10.2005 under appeal has partly allowed the appeal only to the extent of reducing the penalty of Shri Sanjay Soni from Rs. 10,000/- to Rs. 5000/-. 2. We have heard Shri R.R. Agarwal assisted by Shri Suyash Agarwal for the appellants. Shri Sambhu Chopra appears for the department. 3. Brief facts giving rise to the appeal are: That on 16.6.1999, at about 1850 hours, officials of Customs of Gorakhpur Division, on the basis of the alleged specific information, intercepted Maruti Van No. UP-53D-2052 near Munshi Prem Chandra Park. In the car, there were two occupant i.e. the appellant and Shri Sanjay Soni. It is alleged that the appellant was searched and seven big size and two small size pieces of gold were recovered from the front pocket of the appellant's pant and the same were of 559.700 grams and totally valued at Rs. 2,23,000/-. It is further alleged that the pieces were hammered to erase the foreign origin marking and one piece showed explicit Chinese origin marking on it and the appellant and his driver, Sanjay Soni, failed to produce any documentary evidence for lawful importation, acquisition and possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and imposed the penalty of Rs. 15,000/-under Section 112. Maruti Van UP-53D-2052 was also confiscated under Section 115(2) of the Act and option was redeem the same was given on payment of fine of Rs. 15,000/-. Against the order of respondent No. 3, bearing No. 220 (181) / 99 JC-GKP/99 dated 4.11.1999, the appeal was filed before the respondent No. 2. The appeal was adjudicated by respondent No. 2, and the findings given by respondent No. 3 were upheld by the respondent No. 2. 4. Shri R.R. Agrawal, learned counsel for the appellants submits that on the date of seizure on 16.6.1999, a panchnama was prepared and on the same day statement of Shri Gopi Chand Sonar @ Gopi Chand Soni son of Shri Sekhar Chand Soni, resident of Chowk Badhalganj-appellant No. 1 and Shri Sanjay Kumar Soni-appellant No. 2 were recorded under Section 108 of the Act. The appellant No. 1 did not make any confession of smuggling the gold from Nepal; he admitted to have purchased the gold from Urdu Bazar in Distt. Gorakhpur through a commission agent. He stated that he has purchased 560 grams of gold from the Commission Agent for Rs. 2,24,000/-. The Commission agent had told him that the gold is absolutely p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on 5.8.1999. The customs authorities also examined Shri Sada Narain Sharma, Proprietor of M/s Dhancholia Sons, 395, Chandani Chowk, Delhi, who stated that he is engaged in the business of gold and silver in wholesale. On 14.6.1999 by Bill Voucher No. 4 he had sold 11 pieces of gold to Shri Gopi Soni weighing 570.05 grams for total amount including tax for Rs. 2,36,323/-. On that day only one bill was issued. The stamp on the photocopy of the bill shows to him by the Inspector, Customs was not clear. He put rubber stamp and signed on the receipt. He could not describe Shri Gopi Soni. 7. The Joint Commissioner, Customs proceeded on the basis that Shri Gopi Chand Soni has confessed to have received the gold illicitly imported from Nepal through an unidentified broker at Urdu Bazar. The Chinese marking on the gold pieces were flattered by hammer except for one piece. Shri Sanjay Soni stated that he was aware of the dubious transactions and he was present, when the gold was purchased from broker. During his visit to and fro Gorakhpur he was driving the Maruti Van. Despite the hammering, one of the gold pieces were found to bear explicit Chinese origin markings. In their bail ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring on the adjudication order passed under the Customs Act. 9. The Tribunal found that there was no dispute that 9 pieces of gold with foreign markings on one of the pieces were recovered from possession of Shri Gopi Chand. The attempt to erase the foreign markings was made by hammering on the other pieces. Shri Gopi Chand Soni had pointed out that the gold was of foreign origin and was purchased by him through a 'dalal' (broker) from Urdu Bazar, Gorakhpur and it was intended to be sold at Badhalganj, Distt. Gorakhpur. The invoice of sale of gold by M/s Dhancholia Sons, New Delhi dated 14.6.1999 was for 11 pieces weighing 570.050 grams. If this gold was sold by 14.6.1999, there was no reason to bring it to Gorakhpur on 16.6.1999, when Shri Gopi Chand resided at Badhalganj. The weight and number of pieces of the gold shows in the bill issued by the Delhi dealer, is different than the gold seized from Shri Gop. Chand Soni. If the gold was purchased under genuine invoices, then there was no need to hammer the gold to remove the foreign markings, hence the seized gold cannot be said to be covered by the invoices issued by the Delhi dealer. The onus was on Shri Gopi Chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860). SECTION 125. Option to pay fine in lieu of confiscation.- (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit: Provided that, without prejudice to the provisions of the proviso to subsection (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under subsection (1), the owner of such goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods. 12. The Supreme Court, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act held in para 31 as follows : 31. Leave apart, even if the officers of the Enforcement intend to take action against the deponent of a statement on the basis of his inculpatory statement which has been subsequently repudiated, the officer concerned must take both the statements together, give a finding about the nature of the repudiation and then act upon the earlier inculpatory one. If on the other hand, the officer concerned bisects the two statements and make use of the inculpatory statement alone conveniently bypassing the other, such a stand cannot be a legally permissible because admissibility, reliability and the evidentiary value of the statement of the inculpatory statement depend on the bench mark of the provisions of the Evidence Act and the general criminal law. 15. Holding in categorical terms that Section 24 of the Indian Evidence Act shall apply, it was held: But suffice to say that the core of all the decisions of this Court is to the effect that the voluntary nature of any statement made either before the Custom Authorities or the officers of Enforcement under the relevant provisions of the respective Acts is a sine qua non to act on it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or order penalty in exceeding 5 times of the amount of value involved in any such contravention may be imposed. Section 71 of the Act provides for burden of proof in certain cases. Sub-section (2) of Section 71 provides for burden of proof that foreign exchange acquired by such person, has been used for the purpose for which permission to acquire was granted, shall be on such person. The Act as Special Act confers various powers under the authorities. Even if salutary principle 'mens rea' and 'actus reus' in the proceedings under the Act may not be held to be applicable, it is now a settled principle that presumption of innocence as contained in Article 14(2) of the International Covenant on civil and political rights is a human right, although per see it may not be treated to be a fundamental right within the meaning of Article 21 of the Constitution of India. Sub-section (2) of Section 71 places burden of proof upon an accused or proceedee only when the foreign exchange acquired has been used for the purpose for which permission to acquire it was granted and not for mere possession thereof. The Parliament advisedly did not make any provision placing the burden of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a Customs Officer is not an accused at that stage. He becomes an accused only when summons are issued by a competent Court/ Magistrate pursuant to a complaint lodged by the competent Customs Officer. His statement recorded under Section 108 or during confiscation proceedings is not that of an accused within the meaning of Section 24 of the Evidence Act. The Customs Officer in such case although not police officer, is an authority within the meaning of Section 24 of the Evidence Act. The evidence is admissible under Section 135 of the Customs Act, although subsequently retracted, if on facts found voluntary and truthful. Only in such case it can form exclusive basis for conviction. It is, however, a rule of prudence and practice that the Court seeks assurance from other facts and circumstances to corroborate retraction of confession. The Supreme Court held that object of the Act in empowering the Customs Officer to record evidence under Section 108 is to collect information of the contravention of the provisions of the Act or concealment of the contraband, to avoid or avoidance of the duty of excise so as to enable them to collect the evidence of the proof of contravention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch confession, which may have incriminated them, and which they subsequently retracted on 3.8.1999 on 5.8.1999 respectively, in their statements under Section 108 in pursuance to summons issued to them. The appellant No. 1 had changed his statement, in which, instead of purchasing it from commission agent in Urdu Bazar, Gorakhpur, he stated to seized gold, to be from Delhi by producing the receipt and Shri Sada Narain Sharma, the proprietor of M/s Dhancholia Sons, Chandani Chowk, Delhi. The custom authorities and the Tribunal instead of relying upon any evidence of smuggling the gold, or any corroborative evidence, tried to match the first statement recorded under Section 108, with the subsequent statement recorded under Section 108, after notice was issued to the appellants, and relied upon the retracted statement, by finding out discrepancies in the statements. 23. In our opinion the discrepancies pointed out in the subsequent statement of the appellants and the evidence led by them under Section 108, to discharge the burden of proof by itself were not sufficient, to discard the explanation, and then to rely upon the earlier statement, treating it to be inculpatory, unles ..... X X X X Extracts X X X X X X X X Extracts X X X X
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