TMI Blog1972 (1) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ck towards the signal post, excited the suspicion of the Customs authorities who appeared to have been previously alerted about their arrival. They were detained and interrogated and a search followed. One of the two persons called Sare Veerayya, was found to be carrying ten slabs of gold each weighing ten tolas. The gold slab were concealed in a cloth bag tied round his waist. His answer when he was interrogated and also his statements were recorded. He gave a detailed version of his antecedents: his employment in the firm of Ramachander and Co., his trip to Bombay along with Lakshminarayana, their errand at Bombay, the purchase of gold at that place and their return journey. It was almost at the journey's end that he was apprehended along with his companion and the search revealed the secreted gold tied to his waist. 4. The other person Lakshminarayana also set out in writing the details of the errand on which he and veerayya had set out their journey. He owns a small business in partnership with one Gyaneswar. The shop is situate in the same building in which Ramachander Co. is located. He was aware that Veerayya was ringing money given to him by a clerk of Ramachander ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 1965 was followed by a proceeding under Art. 226 of the Constitution. The Writ Petition No, 413 of 1966 was dismissed as stated above by Ekbote, J. 7. In his writ petition No. 764 of 1966 Namdev contended inter alia that the entire enquiry before the Collector of Central Excise is devoid of jurisdiction. He did not pursue his appeal to the Central Board of Excise and he failed to comply with the requirement of deposit of the amount levied as penalty. The appeal was summarily rejected and the revision petition to the Government of India evoked a negative reply. The writ petition having been dismissed, he also has preferred an appeal. 8. The third appeal before us arises out of the writ petition presented by Lakshminarayana. 9. In the judgment under appeal, Ekbote, J. pointed out that the writ petition could be disposed of on a short point. The statute provides a remedy subject to the condition, that any person desirous of appealing against the order of penalty shall, pending the appeal, deposit with the proper officer the penalty levied. The proviso to sub-section (1) of S. 129 enables the appellate authority in its discretion to dispense with such deposit, either uncon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been disposed of upon that ground, was not accepted even by the Central Government on revision. 11. The learned Judge proceeded to say that if the writ petitioners failed to avail themselves of the remedy, it was due to their own faults and it was not open to them to come to this Court and ask for a re-examination of the questions which could have been legitimately considered by the Appellate Tribunal. Having expressed his view in that form, the learned Judge, nevertheless, found that there was no merit in the contentions raised by the Writ Petitioners. However, the only contention finally urged before the learned Judge was that the Collector of Central Excise has acted in breach of the principles of natural justice. 12. As the argument before Ekbote, J., was circumscribed to the solitary submission concerning the alleged violation of the principles of natural justice, it is unnecessary for us to consider elaborately the larger question posed before our learned brother, viz., whether all or any of the other points urged in the appeal before the Central Board of Excise could be made the ground of attack in the proceeding under Art. 226. 13. The proposition of law appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id have the competence to initiate the proceedings against the appellants. The only question therefore is whether the grievances of the appellants that, there had been a breach of the rules of natural justice, are well founded. 16. The main contention urged on behalf of the appellant in writ Appeal No. 321 of 1968 is that there was a denial of a fair hearing as Lakshminarayana and Veerayya were not called to the witness stand to enable their version to be rested by cross-examination. The action was initiated under the provisions of Section 112 read with clause (b) of Section 111. The latter provision reads as follows:--- 111. The following goods brought from a place outside India shall be liable to confiscation------- x x x (b) any goods imported by land or inland water through any route other than a route specified in a notification issued under Cl. (c) of Section 7 for the import of such goods; x x x 17. Under Section 112, any person who acquired possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements were furnished to the appellant Gyanoba, no request appears to have been made to the Collector of Customs that facility for the cross-examination of the persons should be afforded. There was no intimation by counsel to the Collector of Customs that Gyanoba desired to have the version recorded in the statements tested by cross-examination. The use of the statements at the inquiry was not demurred to. There was no protest to the use of the material at the inquiry on the ground that the statements could be relied upon except after cross-examination of the persons concerned. 21. In support of his contention that the statement of Veerayya and Lakshminarayana ought not to have been acted upon, counsel called our attention to several cases of departmental enquiries in disciplinary proceedings against Government Servants. Reliance has been placed among other cases on Khem Chand Union of India, (1959)ILLJ167SC . It was held in that case that the reasonable opportunity envisaged by the provisions of Art. 311 includes an opportunity to defend himself by cross-examination the witnesses produced against him. Decisions to the same effect in other cases were also pressed into service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether a fair opportunity in this regard has been given or not would depend upon the facts and circumstances of each case. Where such opportunity has been given the proceedings will not be open to attack on the ground of procedural irregularity. 23. Where cross-examination of the person whose statement are sought to be used, the request, if rejected will offend the norms of fair hearing. In the instant case no such opportunity was asked for either in the written reply to the notice or at the inquiry. The appellant had an opportunity of explaining the adverse features in the statement of Veerayya and Lakshminarayana. The tribunal had considered the explanation as also the other material made available to it. On a consideration of the entire material the tribunal came to the conclusion that the goods in question come within the ambit of clause (b) of Section 111 and that Gyanoba was concerned with the purchase and the concealment of the goods, which he knew were liable to confiscation. 24. The criticism of learned counsel is that the statement of Veerayya and Lakshminarayana ought not to have been made part of the record of the inquiry unless they were examined afresh at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d prescribed by Section 111 and 112 of the Customs Act, 1962 (referred to herein as the Act). The primary facts about which the tribunal had to be satisfied, were firstly whether, the goods could be brought within the class specified in clause (b) of section 111 and, secondly whether the persons charged with the violation of law were concerned in carrying, purchasing, concealing or in any other manner dealing with the goods. 27. It was manifest that the gold slabs bore marks of their foreign origin. That the slabs were found concealed in a bag tied round the waist of Veerayya cannot be doubted for a moment. The admission of Veerayya and the Panchnama afford clinching proof, thereof. It was urged that the data bearing on the department's enquiries concerning the character of the gold were not made available to the appellant. During the course of the enquiry the basis on which the proceedings was initiated viz., that there was a prima facie case for holding that the gold had been illicitly brought into the country was not challenged. Neither the certificates of the mint master nor the letter of the Reserve Bank of India were questioned and the facts stated therein were implied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant took the trouble of going to the Central Excise Office soon after the seizure of goods furnishes a clear evidence of his interest in the transaction and his concern for the two persons kept in custody. The tribunal chose to accept in their entirety the statements of Veerayya and Lakshminarayana. We are unable to find any error of law or any element of perversity in the acceptance of the testimony of the two persons and in the inference drawn. The tribunal thought that even without invoking the aid of the provisions of section 123 of the Act the complicity of the appellant in the transaction was made out. We are not impressed by the criticism of the learned counsel that the view of the tribunal is vitiated by errors that call for interference. 30. Before Ekboate, J., it was contended that there has been a violation of the rules of natural justice in acting upon the statements of Namdev and Veerayya's wife inasmuch as the copies thereof were not furnished to the appellant. The learned Judge rejected the contention. Copies were not asked for during the enquiry. Apart from that, on a perusal of the order of the Collector of Customs and excise, our learned brother came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the import, if prohibited, might be penalised only under Section 23 of the Foreign Exchange Regulation Act and that Collector, Central Excise has no jurisdiction to decide whether an offence under that Regulation has been committed. It was further pointed out that Section 23(a) of the Foreign Exchange Regulation Act in the unamended form refers only to the provisions (see Customs Act) which were repealed on 1-2-1963. It was hence argued that Section 23(a) cannot be invoked in this case and that the customs authorities have no right to levy any penalty for the alleged violation of the provisions of Foreign Exchange Regulation Act. 33. The pleas set out in the additional affidavit do not appear to have been argued before Ekbote, J. The point apparently was not argued before Ekbote, J. However in the grounds of appeal a complaint appears to have been made that the learned Judge should have permitted the petitioner to raise the question regarding the inapplicability of the procedure under the Customs Act. No reference, however to the of the counsel to advance the plea or the refusal of the learned Judge to allow it to be raised is discernible from the judgment of the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt, was unconnected with the firm either as partner or as employee. But the finding of the tribunal is that he was put on the errand by Namdev at the instance of the partners. Despite the fact that the aggregate amount of ₹ 50,000/- was payable by four persons, there can be little doubt that it was virtually a levy of the penalty on the firm or on Gyanoba who represents the firm. Viewed in this light, the penalty must be held to have been imposed on a single person and in excess of the statutory limit. 36. Apart from the circumstances indicative of the excessive nature of the penalty as pointed out above, it is manifest that the levy has been made in an arbitrary fashion. One does not get any inkling into the reasons that weighed with the tribunal in determining the range of the penalty or the apportionment among the several persons concerned in the transaction. One can understand that partner being made liable for a comparatively heavier penalty. But one fails to see why Namdev who merely acted at the behest of the partners and who had no further part in the transaction should have been penalised at all. Even if there was a justification for levying penalty, the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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