TMI Blog2024 (3) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... t been retracted from. The person intercepted had also disclosed the name of the person from whom he had received the gold bars at Kolkata, who had directed him to hand over the same to the respondent, who was his employer. The statement indicated the intercepted person having confessed to his knowledge, that the gold was smuggled from Bangladesh, as told to him by one Sonu, who handed over the gold bars for onward transmission to his employer, the respondent - The retraction admits the possession of the gold bars at the time of interception. The description of which, as is found with the DRI, is also admitted to be that which was seized. There is no escape from the fact that the contraband was imported as revealed from a mere visual inspection, which discloses the markings on the gold bars. Now, the question arises as to whether the alleged owner of the goods referred to as Noticee No. 2, the respondent herein, had obtained valid possession through a legal import made by him - The First Appellate Authority found that the entire case of the Department spins around the confessional statement of the intercepted person. The First Appellate Authority found that the statement recorded u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e placed. Even if such reliance can be placed, in the present case, the gold bars; which demonstrably were manufactured and sourced from outside the country, should be proved to have been brought into the country in accordance with the provisions of the Customs Act. The orders of the Appellate Authorities set aside - the orders of the original authority restored - appeal allowed with costs computed at Rs. 5,000/- which can be recovered from the respondent by the Revenue. - HONOURABLE THE CHIEF JUSTICE K. VINOD CHANDRAN And HONOURABLE MR. JUSTICE HARISH KUMAR For the Appellants : Dr. K.N.Singh, ASG Mr.Anshuman Singh, Sr. SC, CGST CX Mr. Shivaditya Dhari Sinha, Advocate Mr. Devnath Shankar Singh, Advocate For the Respondents : Mr.Saket Gupta, Advocate Mr. Abhishek Anand, Advocate JUDGMENT ( Per: HONOURABLE THE CHIEF JUSTICE ) Two kilograms of gold, with Swiss markings, indubitably indicating its source from abroad, was seized on prior information received of the transport, based on which, proceedings were taken under the Customs Act, 1962 (for brevity the Act ), culminating in the Order-in-Original (Annexure-B), confiscating and imposing penalties under the Act. The First Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and based on irrelevant facts, arrived at a contrary finding from that of the Proper Officer; the Officer who passed the Order-in-Original. The Tribunal merely referred to the grounds of the First Appellate Authority and extracted them, thus, adopting it without any application of mind. 4. The invoices produced by the alleged owner, though dated earlier to the confiscation, admittedly, there was no consideration paid at that point of time. The consideration was paid only after the seizure and part payments made after the alleged owner was examined on oath. The very explanation offered and the facts disclosed clearly indicate that the invoice was a concocted document. There was nothing to prove the transaction of sale and the transport of the gold from the alleged seller to the purchaser. The seller and the purchaser had no prior transactions, which makes the credit granted doubly suspicious. There was sufficient corroboration for the statement under Section 108 and both the appellate authorities ignored the same. Reliance is placed on Naresh J. Sukhawani v. Union of India; 1995 Supp (4) SCC 663, Surjeet Singh Chhabra v. Union of India Ors., (1997) 1 SCC 508, K.I. Pavunny v. Asstt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and so was the production before the jurisdictional Magistrate. To repel the contention of the State regarding the evidentiary value of sworn statements under Section 108 of the Act, reliance was placed on Commissioner of Customs(Imports), Mumbai v. Ganpati Overseas through its Proprietor Shri Yashpal Sharma Anr.; (2023) 10 SCC 484. Vinod Solanki v. Union of India Ors.; (2008) 16 SCC 537 was also relied on to further buttress the grounds regarding need for corroboration of the statement recorded under Section 108, if retracted later on the allegation of coercion and threat having been employed. Reliance was also placed on a Division Bench judgment of this Court in Om Sai Trading Company Anr. v. Union of India Ors.; 2019 SCC Online Pat 2262. 8. The grounds taken by the respondent in support of the appellate orders and in challenge of the Order-in-Original, starts from the very inception; right from the time of interception. We are quite conscious of the fact that we are not in appeal from the findings on facts as recorded in the order of the appellate authorities and we, under Section 130, only look at the substantial question of law. As has been held in Chandna Impex (P) Ltd. (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the owner also indicated the name of the consignor and consignee, who were within the territory of India. The learned Single Judge dismissed the writ petition only on the ground that the laboratory report indicated the goods to be not fit for human consumption. The said report was not a valid ground for confiscation under the Act. 11. The arguments raised by the learned Additional Solicitor General, in the cited case, in supplementing the reasons for formation of reason to believe, were found to be in violation of the decision in Mohinder Singh Gill v. The Chief Election Commissioner Ors.; (1978) 1 SCC 405. The reasons to believe, in the cited case, were not available in the order and could not be supplemented in court with a counter affidavit or arguments addressed. The reason to believe was held to be not a mere suspicion, gossip or rumor. Belief should arise on an honest basis and on reasonable grounds and if the officer acts on direct or circumstantial evidence, it is with jurisdiction as held in Sheo Nath Singh v. CIT; (1972) 3 SCC 234. We have to notice that the dictum in Om Sai Trading Company (supra) was on the particular facts coming out in that case, (i) of the ownership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 47 speaks of clearance of goods for home consumption. Hence, the reason to believe is very clear from the violations alleged and in the present case, there can be no challenge to the goods being sourced from outside the country, which is evident from a mere visual inspection; the Swiss markings were crystal clear to even a layman who does not have any expertise in the matter. The gold bars apparently, from the mere inspection were not sourced from India. 14. Now, we come to the statement recorded under Section 108. The learned Counsel for the respondent specifically urged that it is impossible that the seizure memo and the sworn statement were witnessed by the very same person. We cannot but observe that there can only be alleged an improbability and not an impossibility. When any person is called as a witness by the officials and directed to accompany the officials, especially since the interception was at a far-away place, the citizen would definitely agree; more out of fear of official retaliation. Rather than discard the statement merely on the ground of impossibility raised by the respondent, we are of the opinion that the statement and its retraction are to be looked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. It is very pertinent that even the retracted statement merely states that the documents and the bill voucher which accompanied the goods were forcibly taken from him and destroyed by the DRI officials, who carried out interception. It was also stated that there was an assault made and the officials forcefully made him sign many documents. 18. We notice that the retraction, which is produced at Annexure-R/F, was made while the intercepted person was in judicial custody. He retracts from his earlier statement that he was carrying the gold from Kolkata to Raipur, as entrusted to him by Sonu at Kolkatta. In the retraction, he states that he had commenced his journey, from Raipur with the gold bars entrusted to him by his employer, and took it to Kolkatta for the purpose of manufacturing ornaments and since the goldsmith could not be traced, he was returning by the Howrah-Mumbai Mail Express. The retraction admits the possession of the gold bars at the time of interception. The description of which, as is found with the DRI, is also admitted to be that which was seized. 19. We would, for the present, assume that the story, as stated in the retracted confession, is correct. Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, can meet the standard of basic judicial principles and natural justice. It is axiomatic that when a statement is admissible as a piece of evidence, the same has to conform to minimum judicial standards. Certainly, a statement recorded under duress or coercion cannot be used against the person making the statement. It is for the adjudicating authority to find out whether there was any duress or coercion in the recording of such a statement since the adjudicating authority exercises quasi-judicial powers. 21. Applying the said principles to the instant case, we find that even if the allegation of coercion is accepted, we have to eschew from consideration, only the statement made by the person intercepted that, to his knowledge, the gold was smuggled from Bangladesh, as told to him by the person who delivered it to him in Kolkata. The delivery in Kolkata, as stated by the person intercepted, also would have to be eschewed. We are left with the admitted statement of the ownership, the possession and the interception as also the description of the seized contraband. There is no escape from the fact that the contraband was imported as revealed from a mere visual inspection, which di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Having found the intercepted person to have retracted his statement and there being no corroboration, it was held to be incapable of any reliance. Reliance was placed also on the retracted statement of the person intercepted that he was, in fact, carrying valid documents, which were destroyed by the DRI official who intercepted and later on arrested him. The retracted statement was found to have absolutely no evidentiary value 24. It was found that M/s Saheli Gems Jewelers Pvt. Ltd., a dealership owned by the Noticee No. 4, had produced relevant bills and stock register to clearly indicate the supply of the said gold bars and also substantiated the entire payments received by the seller. It was held that the Department had not gone beyond the door steps of the seller to reveal the source of the said gold bars, so as to dislodge or disprove the claim of the owner about the purchase of the gold bars from another dealer. The authenticity and genuineness of the said transactions cannot be questioned merely on presumptions that the said gold bars with foreign markings were smuggled into India, especially when the statement under Section 108 was retracted and was not corroborated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karigar Issue Slip raised as against one Sohan Verma @ Subh Karigar, which is available along with the relied upon documents, produced at Page 79 of the memorandum of appeal. The name of the Karigar is shown as Subh , in the said document dated 22.07.2017. The summons was issued on the Karigar, but the same was returned undelivered with the endorsement the addressee moved . Again, a summons was issued and a response was received from an advocate that Shri Sohan Verma did not know the respondent herein. As per the statement of the respondent; one Shri Mukesh Ganatra introduced him to Sohan Verma, whose mobile number was also furnished by the respondent. The voluntary statements of Sohan Verma and Mukesh Ganatra recorded on 15.12.2017 clearly demolished the story set up by the respondent that he had issued a Karigar Slip and sent the gold bars through the person intercepted for the purpose of manufacturing ornaments. Sohan Verma specifically said that he does not know Mukesh Ganatra or the respondent or the person intercepted and that the person intercepted never called him over telephone. Mukesh Ganatra who was also carrying on the business of gold jewelry, feigned ignorance about S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to them, the payment for the seized gold was made in installments of Rs.5,50,000/- on 02.08.2017, Rs. 32,00,000/- on 28.08.2017 and Rs.11,00,000/- on 31.08.2017. The last two of such installments having been made after the three statements of Noticee No.2, the owner/respondent, was recorded by the DRI. Noticee No.3 deposed that he had delivered the goods at the shop premises of Sri Adinath Jewellers on 21.07.2017 along with his father. He produced two sets of bills books from one of which, 5 bills were issued between 01.05.2017 to 10.05.2017. Bill books from Serial No.1-6 pertains to gold sale between 01.04.2017 to 10.09.2017 and bill books from Serial No.1-9 pertains to bullion sale from 05.04.2017 to 20.08.2017. Hence, the sales were not made serially and there was absolutely no mode by which the genuineness of the sale invoice issued on 21.07.2017 of 2 kilograms of gold to Adinath Jewellers, could have been established as that issued on the date shown therein. Both Noticee Nos.3 and 4 informed the DRI officials that they were not well acquainted with Noticee No.2, but asserted that they had given 2 kilograms of gold on credit; highly suspicious. 31. The First Appellate Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gold was validly imported into the country from abroad, in accordance with the provisions of the Customs Act. Whoever be the owner, the gold being one manufactured outside the country, if it is seized in the same form, the owner who raises a claim for release of the said gold should establish unequivocally before the Authority that it had been brought into India duly in accordance with the provisions of the Customs Act. This is the rigor placed on the person possessing or the owner of the seized goods, by Section 123, which puts the burden of proof squarely on the person from whose possession or the owner who has entrusted the said gold to the person possessing it, to establish the source from which it has been received. 34. The appellate authorities have found the findings of the original authority, regarding the absence of proof of the transaction, including the movement of the goods to be bad, only by reason of the invoice produced. We have found that the invoice is not a document on which any reliance can be placed. Even if such reliance can be placed, in the present case, the gold bars; which demonstrably were manufactured and sourced from outside the country, should be p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
