Full Judgment
2. In this case a penalty of Rs. 50,000/- was imposed on the appellant under Section 112(a) & (b) of the Customs Act.
3. Brief facts of the case are that on 30.7.1995, an information was received by the Customs authorities and the C.B.I, in respect of smuggling of gold. On this information, one Shri Ashok Kohli, who came from Dubai, was intercepted by the Customs authorities, but nothing was recovered on search. However, on rummaging of the aircraft came from Dubai, on which Shri Ashok Kohli travelled, one packet wrapped with black adhesive tape was recovered from toilet concealed beneath the toilet seat. Eighteen biscuits of gold of foreign marking and currency in the shape of 20 Pounds were found from the packet. Initially, Sh.
Ashok Kohli, denied the knowledge of this gold. The Customs & C.B.I.Officers kept watch on the aircraft and one person named was later on known as Sh. M.L. Verma, who was working as a Foreman in the Air India, entered the aircraft and went to the toilet and he was found searching the toilet seat. Shri M.L. Verma, was apprehended by the Customs Officers and confronted with Shri Ashok Kohli. On this, Shri Ashok Kolhi gave a statement under Section 108 of the Customs Act and admitted smuggling of the gold, in question, and he gave detailed account of the method for procuring and clearing the gold from the aircraft. He submits that foreign currency was concealed in the toilet by Sh. M.L. Verma and on flight he took out the currency from the toilet and from Dubai he purchased biscuits and hid the same in the toilet and the gold was being taken out by Shri M.L. Verma from the aircraft.
4. Thereafter, the investigation of the case was taken over by the C.B.I, and case was registered. During the interrogation by the C.B.I., Shri Ashok Kohli, named the appellant and two other persons. A show cause notice was issued to the appellant. Thereafter, adjudication order was passed imposing a penalty of Rs. 50,000/- under the Customs Act. The appellant filed the appeal and the same was dismissed.
5. Ld. Counsel, appearing on behalf of the appellant, submits that there was no evidence against the appellant except one disclosure memo procured by the C.B.I. i.e. after the registration of the case and in this disclosure memo, Shri Ashok Kohli, named the appellant. In the disclosure memo, Ashok Kohli only submitted that the appellant arranged the ticket and some money for the purchase of the gold. He submits that no statement under Section 108 was recorded by the Customs authorities of the appellant. He submits that statements recorded by the C.B.I.that too after registration of a case, is not a statement under Section 108 of the Customs Act. Therefore, it cannot be used against the appellant. He, further, submitted that nothing incriminating was recovered from the appellant. He, therefore, prays that the appeal be allowed.
6. Ld. J.D.R., appearing on behalf of the Revenue, submitted that Shri Ashok Kohli, before the C.B.I., disclosed the name of the appellant that he arranged some money for the purchase of the gold. He, therefore, submits that the appellant has share in the smuggled gold.He, therefore, prays that the appeal be dismissed.
8. In this case, the allegation is that Sh. Ashok Kohli smuggled the foreign gold into India with the connivance of Sh. M.L. Verma. The statements of S/Sh. Kohli and Verma were recorded under Section 108 of the Customs Act and in their statements both of them did not disclose anything incriminating against the appellant. Thereafter, the C.B.I.took over the investigation and registered the case and during the interrogation by the C.B.I., Sh. Ashok Kohli made disclosure statement and named the appellant, to this effect, in the disclosure memo. In his statement before the C.B.I., Sh. Ashok Kohli made an averment that some money was arranged by the appellant for the purchase of the gold. The contention of the appellant is that this statement, recorded by the C.B.I, after registration of the case, cannot be used against the appellant. The hon'ble Supreme Court in the case of Naresh J. Sukhawani v. Union of India andSurjeet Singh Chhabra v. Union of India and Ors. reported in 1996 (17) R.L.T. 331 (S.C.) : 1997 (68) ECR 29 (SC) held that the statement made before the Customs officers under Section 108 of the Customs Act, is not a statement recorded under Section 161 of the Criminal Procedure Code (C.P.C.) 1973. Therefore, it is a material piece of evidence collected by the Customs officers and it can be used as substantive evidence indicating the petitioner contravention of the Customs Act.
9. In the present case, no statement of the appellant was recorded under Section 108 of the Customs Act. The statements of Sh. Ashok Kohli and Shri M.L. Verma were recorded under Section 108 of the Customs Act by the Customs authorities and in these statements, nothing incriminating was stated against the appellant. Only evidence against the appellant is disclosure statement made by Sh. Ashok Kohli before the C.B.I, i.e. after registration of the case. Therefore, this evidence is not sufficient for taking penal action against the appellant. In these circumstances, the impugned order in respect of appellant is set aside and the appeal is allowed.