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Sh. Abdul Rahman Sh. Mohd Osman Versus CC & CE Hyderabad - II (Vice-Versa)

2016 (7) TMI 646 - CESTAT HYDERABAD

Department argued that department proceedings and criminal proceedings are separate and merely because there was acquittal in the latter, it would not entail in nullification of the former. - Held that:- the judgments in the criminal proceedings cited supra, will have the effect of neutralizing the order of the lower authority in respect of the two notices (appellants). We have no quarrel with the legal position that departmental proceedings and criminal proceedings are separate. However in the .....

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ecided in favor of appellant. - C/74/2005, C/245-246/2006 - Final Order No. A/30562-30564/2016 - Dated:- 22-6-2016 - Ms. Sulekha Beevi, C.S., Member (Judicial) and Sh. Madhu Mohan Damodhar, Member (Technical) Sh. P. Rama Sharma & Sh. Anand Sheshu, Advocates for the Appellant Sh K.S.G.S. Kumar, Assistant Commissioner (AR) for the Respondent ORDER The issue involved in all the above appeals being the same, they were heard together and are disposed by this common order. 2. The facts are that th .....

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earch conducted at SBI branch at arrival hall, an amount of US $ 18795 was recovered from Sh. M. Vishwanadam, SBI official. DRI officers also intercepted three passengers viz; Mohd. Osman, Mohd Saleem and Abdul Rehman who arrived by IC 592 on 29.08.1997 and found that each of them carrying 10 Kg of gold but did not possess the requisite foreign currency with them to pay the customs duty. On search of their personal baggage 85 FMG bars were recovered from each of these passengers, total 255 FMG b .....

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anadham were called upon to show cause as to why foreign currency seized from them should not be confiscated under provisions of Customs Act and FERA, in addition of imposition of penalties. 3. On adjudication, vide order dated 27.02.2004, the lower authority confiscated gold weighing 9915.25 gms valued at ₹ 45,47,500/-, foreign currency amounting to US $ 12530 and US $ 18795, and imposed penalties, interalia, on the aforesaid five persons. 4. Aggrieved by the above order, two of the affec .....

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, the adjudicating authority has ordered absolute confiscation of only 9915.23 gms (i.e. only 85 bars) valued at ₹ 45,47,500/-, without passing orders in respect of gold weighing 19830.50 gms valued at ₹ 90,95,000/- 6. During the course of the hearing, the learned advocate for the noticees pointed out that in consequence to the common judgment dated 28.06.2005 passed by the Metropolitan Session Judge, Hyderabad in the Crl.appeal nos.293/2003 and 298/2003 filed inter alia by the afore .....

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ortion of the judgments Metropolitan Sessions Judge and the Hon ble High Court. 8. In the common judgment dated 28.06.2005 the Metropolitan Sessions Judge has inter alia found as under: 35. "It is the case of the accused 1 to 3 from the beginning that all the five passengers brought with them 31325 US $ from Dubai for payment of import duty for 50 Kgs of gold. Soon after disembarkation from the Aircraft itself some officers escorted them and Al to A3 were taken to a secluded place and detai .....

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to bring challan receipts refusing to receive the US $ and the two passengers gave the names and passport numbers and the two passengers names who are present struck off and the names of three other passengers who did not come were noted and that 31,325 US $ were placed by the passengers at the counter table tendering it for payment of custom duty for 50 Kgs of gold and that was taken away by the officers concerned. The defence case is that Al to A3 and Syed Bin Hasan Sharabi and Syed Mazhar Al .....

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Dubai on 26-08-1997 by the invoices put to PW2 and confronted which was also filed along with written statements of Al to A3 while they were examined u/s 313 Cr.P.C. The defence counsel appearing for Al to A3 submitted that there was no convincing reason why passengers bringing gold would not bring with them 31,325 US $ required for payment of custom duty from Dubai when the US $ were cheap and available in plenty in open market without any restrictions in Dubai and they will not gain any benefi .....

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charge leveled against them is not correct and the same is liable to be set aside. In view of my above discussion, the finding of the learned Special Judge that the complainant has proved the guilt of A1 to A3 is not correct and it is liable to be set aside". 9. It is further seen that the Metropolitan Sessions Judge has decided as under: 39. "I decide the point that the finding against A1 to A5 by the lower court that the A1 to A5 have committed the offences u/s 135(1)(b)(i) and 135(1 .....

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d the A1 to A3 are claiming the foreign currency worth of 18, 795 US $ belongs to them and they sent the said currency to the SBI counter for payment of import duty. It is not the case of Al to A3 that the total 31325 US $ belongs to them. Hence, they are entitled for the foreign currency of 18,795 US $ and remaining foreign currency can be confiscated by the concerned officers as per the provisions of the Act and A1 to A3 are entitled to get back the gold on payment of import duty in foreign cu .....

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e Hon'ble High Court did not find any merit in the appeals filed by the department against the above order and dismissed the same. It is seen that the Hon'ble High Court has held as follows: 45. As regards A1 to A3, their defense was that they are owners of the gold and had purchased the foreign currency in question for payment of customs duty; alternatively, it is contended that even if they are not owners of gold, they had a right to declare the gold to the appropriate Officer under Se .....

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toms Act or under the provisions of the FERA. 46. I am not going into the question whether A1 to A3 are owners of the gold although the said point was argued before me. In my opinion, even the alternative plea raised by them has considerable force and is required to be accepted. 47. The trial Court at para-114 taken the view that A1 to A3 do not have any right to declare the gold in question under Section 77 of the Customs Act, 1962 since they were only carriers of the gold 48. Section 77 of the .....

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m on his leaving India; and if for any reason, the passenger is not able to collect the article at the time is of his leaving India, the article may be returned to him through any other passenger authorized by him and leaving India or as cargo consigned in his name. 49. The finding of the trial Court in para-114 of its judgment that A1 to A3 cannot be allowed to declare the gold under Section 77 since they were only the carriers, in my opinion, cannot be accepted. 11. The Hon'ble high Court .....

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I am of the opinion that A1 to A3 cannot be held guilty of the charge under Section 77 or Section 135(1)(b)(i) of the Customs Act, 1962. 12. The learned AR appearing on behalf of department argued that department proceedings and criminal proceedings are separate and merely because there was acquittal in the latter, it would not entail in nullification of the former. 13. We have considered the facts, evidence and the submissions made before us carefully. 14. We are of the considered opinion that .....

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ed at a conclusion that the two noticees only are the owners of the gold carried by them in the result the two noticees 'have been found not guilty of the offences charged against them. This finding has been unreservedly upheld by the Hon'ble High Court. This being the case in our opinion, the entire raison d'être of the impugned order will necessarily crumble and becomes redundant. We find that this view finds resonance in a number of decisions as under: (i) In Saleh Baginwan .....

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d to clear the goods only on payment of duty with the foreign exchange he brought, which was actually sufficient to cover the duty. Hence, we do not find any merit in the impugned order. We set aside the same and allow the appeal with consequential relief, if any. (ii) In S. Duraippa Vs CC& Cus Chennai [2006 (202) ELT 365 (Tri- Chennai)] We have also examined the case law cited by Id. SDR. Some of the decisions (by High Courts) cited by Id. SDR (vide K.P. Abdul Majeed, V.J.A. Flynn, etc.) ar .....

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oceedings are independent, any resulting from adjudication cannot be the allowed to stand in the face of an order of acquittal passed by the criminal court on the same set of facts and evidence. When this ruling of the Apex Court is applied to the present case, we have no option but to set aside the penalties. None of the appellants has challenged the confiscation order. Their challenge is only against the penalties. Hence we set aside the penalties Imposed on the appellants by the Commissioner. .....

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