Full Judgment
2. We have to first deal with the preliminary objection which was raised by the both advocates for Ramesh Bachani, Anil Bachani and for Raju Jain. The objection is that the applications which were filed by the department under Sub-section () of Section 129D of the Customs Act, 1962 with regard to Anil Bachani and Ramesh Bachani are barred by limitation. The order of the Board directing the Commissioner to refer the points for determination to the Tribunal with regard to the liability to penalty on these three persons is dated 17.7.1998. An application under Section 129D(4) was first filed on 21.8.1998 in which the names of all the three respondents were cited. Subsequently, the department filed two more applications on 13.1.1999 and registered as appeals C/14/99 and C/15/99 specifically with regard to Anil Bachani and Raju Jain. The contention is that these two applications have been filed beyond three months which is specified in Section 129D of the Act for filing an application from the date of the Board's directions to the Commissioner. There being no provision to condone this delay, these applications are barred by limitation. Advocates for the respondents relied upon the order of this Tribunal in Bank of Madura Ltd. v.Commissioner of Customs (Order No. 3908-11/97-WRB dated 23.9.1997) in support of their assertion.
3. The departmental representative contended that the first application (C/809/98) was within time. It contained the names of all the three respondents and contained separate grounds related to each of them. The later two applications therefore, he says, were filed as a matter of abundant caution and they are not necessary. He also says that the reliance upon the order of this Tribunal by the respondents was misplaced. In that order, the fact was that initially the application filed by the Commissioner did not contain any grounds with regard Bank of Madura and that the respondent's name figured only in application nine months after the communication of the Board's order in Section 129D of the Act. That case, he says, therefore has to be distinguished.
4. Thereupon the advocates for the respondents did not press their objection.
5. It is necessary to recount briefly the facts before we can turn to the merits of the case. Acting on information, the Customs officers seized a total of 194 foreign mark gold bars from the possession of Lalit Jain and Raju R. Jain in the Fort area of Mumbai on the evening of 28.9.1996. The same day they recovered and seized 124 gold bars from the cabin of Afanas Yeva Natalia, a crew member on board the vessel MV Pravdinsk. In the course of further investigation, the officers recorded the statements of Lalit Jain and Raju Jain who stated that they had obtained the gold bars from Sitaram, an employee of M/s Royal Gems, situated in Shahid Bhagat Singh Road, Fort Mumbai. They had picked up these bars in pursuance of instructions received from Mukesh Jain, their employee and were waiting outside the shop as instructed by him, when the Custom officers got hold of them. The officers questioned and recorded the statements of Anil Bachani and his son Ramesh Bachani.
Each of these persons in their statements said that the gold had been delivered to them by Afanas Yeva Natalia, who came there accompanied by Udusheva Anna, another member of the crew.
6. Anil Bachani said that he was told by his father that these two women would be coming to give him 194 gold biscuits which were to be handed over to Lalit and Raju Jain by Sitaram. These two men would be bringing US $ 12000 which will be handed over to the two women. He confirmed that the women, whose photographs he identified, came to the shop, handed over the gold (50 pieces) which each he passed on to Sitaram. Thereafter they left and returned once again when 94 pieces of gold. In between Sitaram was delivered US $ 12000 from Anil and Ramesh which he passed on to these women. Subsequently, shortly after 9.00 at night Ramesh phoned Anil to say that the two men had picked up the gold. Ramesh confirmed his participation as explained by Anil. He also added that on 29.7.1996 a person named Hameed (or possibly Amit) phoned from Dubai that he has sent gold through two members of the ship MV Pravidinsk, describing them as a fat woman and a thin woman. The gold was to be given to Mukesh who would send him US $ 12000 with Ramesh.
Based on this statement and statements of other persons such as the employees of Royal Gems, notices were issued proposing confiscation of the gold, the ship and penalty under Section 112(a) on the two Russian women, Lalit Jain and Raju Jain and the two Bachanis.
7. In his order, the Commissioner found that there was no case for imposition of penalty on Udusheva Anna. He found that she merely accompanied the other woman Afanas Yeva Natalia without being aware that she was carrying gold which was smuggled. He imposed a penalty on Raju Jain, whom he found was "under employed youth" who had no knowledge that the gold in question was contraband. The Commissioner declined to accept the statement of Anil Bachani and Ramesh Bachani, to be voluntary. He noted that they were retracted by the next day, on the ground that they were obtained under duress. He found this claim to be correct on the basis of evidence which showed that Anil Bachani has been subjected to durests by the officers of the Directorate of Revenue Intelligence (DRI). He did not find sufficient evidence otherwise against these two persons. On the other hand, he found contradictions in the versions of various participants to the transaction which showed that these two persons could not have been involved in the smuggling of the gold. He did not impose any penalty on their, or order confiscation of the ship. The Commissioner in the first application, had not questioned the Commissioner's finding with regard to Udusheva Anna. He requires the Tribunal to determine the legality or propriety of the order not imposing penalty on Anil and Ramesh Bachani and on Raju Jain.
8. The grounds of the applications which were explained by the departmental representative with regard to Bachanis, father and son are these. The Bachanis are owners of the office in which the gold was delivered on 29.9.1996. It is not credible that Sitaram their low paid employee would receive such a large quantity of gold without the employer's consent and directions of the Bachanis. They did not want to reveal the address of Sitaram because by doing so, they would have been implicated. The results of the investigation leads to a reasonable conclusion that they were involved in smuggling. They have the vicarious liability for the acts of Sitaram. They are a "non absencee owners of the premises which were used for smuggling activities." The Commissioner's view that there is no motive shown, in the absence of any financial benefit to accrue for the Bachanis who engaged in smuggling is not proper. There are various probabilities as to their role. They could, for example, be partners with Mukesh in smuggling business. Royal Gem is near the dock and has come on record that most of its employees speak Russian and indulge in smuggling with the crew members.
9.These averments are sought to be rebutted by advocate for Bachanis on the following grounds. The appeal does not question the Commissioner's conclusion that the statement of Anil and Ramesh cannot be relied upon and having been obtained under duress. That being the case, there is no direct evidence against the two Bachanis. Neither the crew members nor Raju and Lalit say that they spoke to, or they receive the gold either from the Bachanis or had any dealings with them with regard to the gold. He further points out that there are significant contradictions in the versions of the statements of other persons which would render any of them not worthy of credence, which he details.
10. It is not necessary for us to record the details of the contradictions that are pointed out. The department, in its application, does not question the view of the Commissioner that the statements of Bachanis, father and son, are not to be relied upon, for the reason that they have been shown to be recorded under duress. What now has to be considered is, whether the grounds in the department's application are to be accepted so as to show that the Commissioner's order is not proper or legal.
11. The first ground is that the fact of delivery of gold in the office of the Raj Gem having been established, it must follow that the Bachanis are involved. The reason is that Sitaram, a low paid employee, would not have received such a large quantity of gold "without the implied consent and direction of the Bachani family". It is stated that Bachani has deliberately suppressed the address of Sitaram, 12. The question that then arises is whether the department was dependent upon the willing co-operation of the Bachani family to complete its investigation against them, by implicating Sitaram. It is axiomatic that no person would, in the ordinary course, willingly co-operate with the investigating authority in an investigation directed against him. No one would willingly put a noose around his own neck. The complaint that Bachanis did not furnish Sitaram's address is therefore ingenuous. It is a function of the investigating agency to get evidence, and generally get it against an active role of the person being investigated to implicate him in the matter which is being investigated. The department doubtless had other means of obtaining Sitaram's address. The Bachanis themselves were interrogated to a point they give statements incriminating themselves. Records of the company were available with the investigating agency, as of the other employees who could have been questioned. We agree, as claimed on the ground that Sitaram's involvement "points a needle of suspicion" to Bachanis. We however have equally to agree with their advocate that 'Needle of suspicion" is not enough. Clear evidence is required.
13. It is not possible for us to agree, as claimed in this ground, Bachanis have "vicarious liability" for Sitaram's acts. We are not aware of any provision in the Customs law nor does the departmental representative points to anything that fastens a quasi criminal liability on one person for the acts of another. Nor is it possible to conclude, solely on the ground that the Bachanis are the owners of the premises, that their mens rea can be inferred "continued smuggling activity of Sitaram". No such continued smuggling activity had been established, or their awareness of, or participation in, such activity.
14. The next ground seeks to assail acceptance of the Commissioner the plea raised before him by Bachanis, that no motive have been demonstrated on their part to participate in the smuggling activity of gold and no financial benefit accruing to them. It is contended that there could be many possibility as to the role of Bachanis. Bachanis could have been the financier between Mukesh and other persons in the racket. Alternatively, Bachanis and Mukesh would be partners.
15. All these are nothing other than speculation. It is true that motive is not an essential ingredient to establish an offence under the Customs Act. Although it may be a factor to be taken into consideration. The appeal however does not seek to find a motive by evidence, but, as we have noted, speculating on the possible role of Bachanis. It seeks to back up of such speculation by claiming without any evidence whatsoever that it is on record most of the "people" (presumably employees) of Raj Gems speak Russian and indulge in smuggling through Russian crew members. The department was not able to produce any such records. The contention that the financial benefit available to the Bachanis would have come to light if Mukesh, Sitaram or Anil have been apprehended by the DRI, invites a question as to why they have not been apprehended, again apart from being speculative in nature.
16. The statement that the results on the investigation discussed in the notice points towards Bachanis and their guilty minds is too general to be accepted. The Commissioner has given detailed reasons for his view including the contradictions that are referred to by their advocate. We are not impelled to accept the broad, general unsupported statement concluding the recitation of allegation clearly either speculative or unsupported by evidence to overturn his conclusion.
17. The application with regard to Raju Jain contends that he had admitted that he was to get Rs. 5000/- for carrying the gold and that he had gone to Royal Gem in pursuance of the instructions given to him by Mukesh. It emphasizes that he was not given any Customs receipt for the gold and therefore ought to have known that the gold was smuggled.
The departmental representative emphasises that Raju Jain does not stand on a different footing from Lalit Jain in this respect. He says that the distinction made by the Commissioner between Raju and Lalit cannot be justified.
18. The Commissioner's finding that Raju Jain was carrying the gold on behalf of his friend Lalit Jain is not in fact justified by evidence.
Raju Jain, in his statement, says that he and Lalit both of whom were working for Mukesh, were and asked by him to go to collect the gold.Lalit also makes the same statement. It is therefore not possible to say that Lalit and Raju stand on a different footing. Advocate for Raju Jain emphasises the fact that the amount of Rs. 5000/- paid to Raju Jain was not excessive if it was for carrying legally imported gold.Neither side was able to give us details of such payments or on the basis of which they are made. However, it certainly appears to be excessive, having regard to the general statement of union for each of the two persons to be given Rs. 5000/- to go to a shop, pick up legally imported gold and wait outside that shop.
19. We must note that the Commissioner, in his findings, does not take this view about Lalit. In virtually identical circumstances, he found Lalit guilty. No doubt Lalit Jain had, in the reply to the show cause notice, claimed ownership of the gold in question, unlike Raju Jain who did not. We do not however see how this justifies the distinction made by him between the two parties.
20. On merits therefore it would have to be held that the distinction made by the Commissioner between the role Raju Jain and Lalit Jain were not justified. It would follow that Raju Jain is liable to penalty.
21. There is however an obstacle to ordering this. Advocates for both the respondents point out that the applications seek imposition of penalty on all three persons under Clause (a) of Section 112 of the Act. We cannot accept the departmental representative's stand that this was a typographical error and what was meant was for Clause (b) of Section 112. The order of the Board under Section 129D(1) itself refers to Clause (a) of Section 112 explicitly with regard to Raju Jain, Ramesh and Anil Bachani. The Commissioner's application also refers to this clause. If, indeed, this was an error, presumably made by the Board and carried through by the Commissioner, it ought to have been corrected. We cannot, at this stage, accept this plea.
22. Clause (a) of Section 112 of the Act will not apply either to Anil Bachani, Ramesh Bachani or Raju Jain. It would only apply to the persons who imported the gold. The notice to show cause does not cite Clause (a) of Section 112 with regard to these three but to Clause (b).
The departmental representative does not dispute that penalty could not be levied on these persons under Clause (a) of Section 112.
Accordingly, it will have to be held that the application with regard to Raju Jain fails on this score.
23. The departmental representative says that he has been instructed to pray for an order for holding that the ship on which the gold was smuggled, was liable to confiscation. He says that the application for early hearing refers to this issue. That may be so. In the total absence of any material in the application with regard to confiscation of the ship, we have to reject this plea out of hand.