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TMI Blog2001 (2) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... side the penalty amount of Rs. 2.50 lakhs each imposed on them, or for substantial reduction or remission in penalty amounts. 1. Brief facts of the case are that on secret information officers of Marine and Preventive Wing Customs (Preventive), Collectorate, Bombay, searched; the premises of M/s. Roop Jewellers at 143, Ground floor, Kothari Niwas, Jail Road (East), Dongri, Bombay on 3-12-1990 in the presence of two independent Panchas and also in the presence of both the appellants, and recovered (a) Foreign marked gold in various shapes like slabs, biscuits, etc. totally weighing 2782.00 gms. valued at Rs. 9,49,722.00. (b) Various shapes of silver pieces made out of silver ingots weighing 5057.00 gms. valued at Rs. 34,619.00 (c) Foreign marked palladium in biscuit shape, weighing 124.4 gms. valued at Rs. 745/-. (d) 45 pieces of wrist watches of foreign origin valued at Rs. 22,440/-. (e) 82 pieces of silver coins valued at Rs. 6,150/-. (f) Foreign currency amount to 2 lakhs, totally valued at Rs. 12,18,676.00. (g) Indian currency of Rs. 5,65,000/-. During search two persons entered the shop by name (1) Sudhakar Dhondiba Pampatwar (2) Amlokchand Shanthilal Jain. On their perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign origin, foreign marked silver coins, silver pieces made out of foreign marked silver ingots and foreign currency equivalent to Rs. 2 lakhs. Cash amount of Rs. 5,15,000/-, Rs. 2,00,000/-, Rs. 90,000/- were confiscated under section 121 of Customs Act. Maruti car, Yamaha Motor Cycle, and Kinetic Honda Scooter were confiscated under section 115(2) of Customs Act with redemption fine of Rs. 25,000/-, Rs. 8,000/-, and Rs. 10,000/- respectively. Penalty under Section 112 of Customs Act was imposed on both the appellants of Rs. 2.50 lakhs each and Rs. 20,000/- on Amlokchand and Rs. 10,000/- on Sudhakar D. Pampatwar. The appellants preferred appeal against the above order, which was dismissed under the Impugned order. Hence these appeals. 2. In support of the appeals Sri. V.S. Nankani, learned Counsel for appellant has filed the synopsis and propositions and Judgments, and has submitted his arguments as follows : Denial of cross examinations of Panchas and seizing officer is fatal. Statement when not voluntary and recorded under duress is not reliable against the maker as per 1995 (78) E.L.T. 80 in the case of Bhagwan Das Manipal v. Collector. When it is not proved as sale proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1984 (16) E.L.T. 404 (T). Retention beyond time limit is illegal and without jurisdiction (para 7). The appellants have not claimed foreign currency and balance of Indian currency. Seizure is challenged, as Panchas were from Antop Hills. Panchanama is silent from which part of shop. Recovery is made of item. J.B. Singh officer present there is, not aware of it, as per his cross-examination. Panchanama and remand application varies about its details. Rs. 5,65,000/- is not mentioned as sale proceeds of smuggled; goods. Signatures of appellant are not taken in all pages. Copy of Panchanama was delivered 2 months later on. Gold Sovereign and Silver coins are used by family member for religious pooja ceremony and had not meant for Trade or business. They were lying in appellant's house. Maruti car is owned by Jawaharlal Gandhi, who has claimed by application for release, which was granted by Additional Chief Metropolitan Magistrate, which is challenged before Session Court and pending decision. No notice was issued by Department to him before confiscation. Penalty imposed is not maintainable as neither items claimed by appellants are neither confiscable, nor Indian currency, under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is chapter unless the owner of goods or such (a) is given a notice in writing informing him of the grounds in which it is proposed to confiscate the goods or impose penalty. (b) is given opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein and (c) is given a reasonable opportunity of being heard in the matter. Even as per appellants the goods were seized on 3-12-1990 and show cause notice was given on 3-6-1991, which is within the above period. As per department it was given on 31-5-1991. As per grounds of appeal under Section 153 of Customs Act read with Section 27 of General Clauses Act. Service of notice sent by Registered Post is deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post. AIR 1963 S.C. 395 in Bachchitar Singh v. State of Punjab and AIR 1972 Gujarat 126 (DB) D. Ambalal Morarji Som v. UOI are cited. Both of them not produced. They are not available. In para 25 of the Impugned order, the same ground is discussed properly, Examining Section 153 of Customs Act and Section 27 of G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i, elder brother, Deepak Kothari, son of Pukhraj were also present. Preventive officers and staff offered them personal search, which was declined by Pukhraj - Appellant. They entered the premises, and accompanied Pukhraj and conducted a thorough search in systematic and orderly manner. Premises was one room with a loft over, measuring 120 sq. ft. Tel. Nos. 865747 and 868612 were installed. They recovered (a) Yellow metal sound to be gold in the shape of slabs, biscuits, pendals, strips and other irregular shape having different weights, (b) White metal said to be palladium in the form of biscuits, broken in two pieces, totally 8 pieces when aligned formed 4 pieces of biscuits. (c) Unmarked white metal in different shapes, said to be silver, (d) Silver coins, (e) Wrist watches of foreign origin, (f) foreign currency of different denominations and (g) Indian currency of various denominations amounting to Rs. 5,65,000.00/-. As proceeding was continuing, two persons entered enquiring Pukhraj Dhanraj Kothari. They were questioned by said officer Swaminathtan who gave their names. Amlokchand Shantilal Jain and Sudhakar Dhondiba Pampatwar, on their personal search by him Rs. 2 lakhs were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lver and palladium were also sealed. Panchas have signed on all of them. Only listed articles in annexure to Panchanama were sealed and nothing else. panchanama was concluded at 9.00 p.m. Both parties have signed on all the 9 pages and S.K. Swaminathan, Inspector has signed below "Before me" with date and designation. Pukhraj & Shantilal Jain, Sudhakar and another have signed in page 1 in the side only. From the above, it is not clear from which of the listed articles in annexure were recovered from the premises. There is no endorsement in the receipt of copy of Panchanama with annexures by appellants, with their signatures in the last page of Panchanama. As per annexure 'A' to panchanama 19 items were seized worth Rs. 21,93,676/-, out of which last three items are vehicles, and 2 items above them are currency of Indian rupees of Rs. 8,55,000/-; and of foreign equivalent to Rs. 2 lakhs. 45 wrist watches of foreign origin is shown above currency notes. 82 silver coins prior to 1939 is above it. 5057 gms. White metal said to be silver in different form are shown above it. 4 white metal of palladium in biscuit form is shown above it. Items 1 to 10 above it are yellow metal said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his father was doing business of ornaments of gold and silver in the same shop and to assist him along with Lalchand elder brother came in 1950 and assisted both one after another and tried to establish business. He owns Kothari Niwas and is getting rent in 40 tenants. At about 3.00 p.m. Swaminathan along with 2 other inspectors came to his shop and showed search authorisation and searched in the presence of two panchas and recovered. (a) Yellow metal said to be gold in the form of slabs, Biscuits, pendants, Coins, circular eloquated shape, strips lagadi, sovereign in varying weights valued at Rs. 9,49,722/-. (b) White metal said to be Palladium in the form of 2 pieces each. When aligned form biscuit of foreign marking valued at Rs. 745/-. (c) Silver different shape is valued at Rs. 34,619/-. (d) 44 wrist watches of foreign origin valued at Rs. 16,510. (e) Foreign currency of varying denomination equivalent to Indian currency of Rs. 2/- lakhs. (f) Indian Currency of Rs. 8,55,000/- of various denominations and seized under paid by a name on the reasonable belief as relevant for further investigation and are liable for confiscation under the provision of Customs Act. Subsequently off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ti Car, Yamaha Motor cycle, Kinetic Honda were used to transport the contraband goods. Statement given is true and read out sentence by sentence and it is correct. Sri. Swaminathan has written it before Superintendent (Customs). Appellant has endorsed in regional language and signed it. II. On 4-12-1990 he has given further statement that - "he has been dealing in foreign marked gold biscuits, silver and miscellaneous articles wrist watches and electric articles for the past few years. He generally buys them from passengers coming from abroad and one Mr. Farook. He purchases major parts of foreign marked gold and silver from Mr. Farook. Since he has been in this type of transaction of selling FM Silver, FM Gold and other articles of foreign origin like wrist watches for the last ten years. These passengers who generally visit foreign countries for the purpose of buying foreign goods and selling them in Indian market at premium are known to him and frequent visit to his shop regularly. He does not know their address. Farook stays near the vicinity of his shop, from whom he purchases FM Gold, Silver and other articles and sell to customers. He used to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eepak Pukhraj Kothari in his statement under Section 108 of Customs Act has stated that, he used to sit in Roop Jewellers for an hour or two, though a student and is completely aware of his father's dealing in foreign marked gold and silver and other miscellaneous goods, of foreign origin. He never took part in it." - (c) Amlokchand Shantilal Jain has stated that "he is from Madras, and has money lending, mortgaging business. For the last 2 years he is dealing in foreign marked gold/silver and used to purchase from Pukhraj of Roop Jewellers. On 3-12-1990 he had come from Madras with Rs. 2 lakhs to make payment to him for foreign marked gold purchased in earlier visit"-. (d) Sudhakar Dhondiba Pampatwar has stated that "- he hails from Nanded and cloth stores of Pampatwar. He was lured by profits in foreign marked gold in which his brother Sakharam used to deal. He started making visits to Bombay and started purchasing FM GOLD from Pukhraj Kothari. On 3-12-1990 he had come from Nanded to purchase foreign marked gold and to pay Rs. 90,000/- to Pukhraj Kothari for the purchase of foreign marked gold made on his earlier visits"-. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of 91 dated 3-1-1991 by Chief Medical Officer, Bombay Central Prison Hospital of accused Phukhraj Dhanaraj stating he examined the above prisoner on 5-12-1990 allegd assumption on 3-12-1990, injuries describing 12 injuries and 3 notes of identify with treatment - in TT BOC/for necessary action. Copy of retraction letters dated 28-12-1990 of both appellants to Collector of Customs Marine & Preventive Wing, New Custom House, Bombay are produced and original copy to Assistant Collector Customs therein. 10. Sri. N.K. Kadolkar, Superintendent, who has recorded the statements of appellants in cross examination has stated that - "he questioned them in Hindi and appellant replied in Hindi and recorded answers in English. He has put in question form and recorded the replies. He has question all about the particulars in the seizure Panchanama. He did not question about their business activity or partners of M/s. Roop Jewellers, nor any documents of the shop was taken. It was a jewellery shop. Both the appellants have confirmed their statement of 3-12-1990, on 4th to 6th Dec. 1990. Appellant resides in the same building. He does not remember whether their house was searched or not. En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given description of his personality and is ready to identify, no investigation is made to trace him, and enquire and record his statement to cover up the ingredients of Section 121 of Customs Act. In the absence of it, vague and general admission by all the above 4 persons in the statement are not sufficient to probabalise the case of department. Cross examination of officer, who has recorded the statement shows, questioning and answering took place in regional language and he knew both Hindi and English, but has recorded the statement in English, on the ground that at that time there was no officer who could write in Hindi. He has not stated he cannot write in Hindi. Further, as per her cross examination, statements were recorded after Panchanama which was concluded at 9.00 p.m. Both the appellants were in the custody of Preventive Officers. Application of Deepak Kothari before Additional Chief Metropolitan Magistrate, written submission of appellants before him, and retraction statements to Collector of Customs (Preventive), with a copy to Assistant Collector of both and medical report of Chief Medical Officer of Central Prison, shows that the Department's case regarding the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prove the seized Indian currency is the sales proceeds of the sale of smuggled gold - under Section 121 - confiscation set aside (vide para 7). So the reasonings and findings in the Impugned order is opposed to the law laid down as above by the Tribunal. It cannot be upheld. The observation therein admission in the statements prevails over retraction by appellant, immediately before jurisdictional Magistrate on production does not hold good. In view of the discussion in the above paras, and the circumstances in which statements are recorded. All the four co-noticees have retracted their statement. Retracted confession, cannot be solely based to impose penalty and confiscate seized goods. As already observed above, non accountal is taken as ground to uphold admission in statement, which by themselves do not make a clear and specific case. Retraction letter, Medical Report, Complaint of Deepak Kothari are not even narrated and discussed and decided as to why it should be ignored. So under these circumstances, findings in the Impugned order cannot be upheld. 13. Regarding the claim of Deepak Kothari of the vehicles, as observed by adjudicating authority, there is no statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is impossible to produce documents of ownership and legal import, when they are household articles for more than decades. So the conclusion arrived at in the Impugned order is not reasonable. It cannot be upheld. It is rejected. 15. Looking to the overall circumstances and facts emerging on from the records, and the fact that department was not able to establish the link of source of acquisition with clear and identifiable evidence, and has rested the whole case on the admission of noticees in their retracted confiscation, and the circumstances under which statements under section 108 of Customs Act of appellants recorded, throwing doubt about the voluntariness of the same and its truth, and the failure of the department to establish co-relation with the seized Indian currencies and smuggled gold, wrist watch, Palladium and silver, and the details of sale transaction of smuggled articles, knowingly, the Impugned order cannot be upheld. It is rejected. The appeals have to be allowed as prayed for. Hence we pass the following order. ORDER For the reasons discussed above, both the appeals are allowed, as prayed for, in para 10 of the appeals memorandum with consequential ..... 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