Full Judgment
During the course of the search one Shri Harish B. Jain entered those premises. The person of Shri Harish Jain was searched by the Customs Officers resulting in the recovery of 11 foreign marked gold biscuits totally valued at Rs. 5,83,000. Since Shri Harish Jain could not produce licit document for the import/ possession of the 11 gold marked biscuits the same were seized. A statement was recorded from Shri Harish Jain under Section 108 of the Customs Act, 1962 on the spot in which he deposed that his uncle Shri Shantilal L. Jain had given him the stated packet containing gold biscuits and he had asked him to deliver the same to Shri Phoolchand Jain of M/s. K.K. Chain. He deposed that his uncle had told that foreign gold biscuits were smuggled and same should be carried carefully. He further stated that he could not produce any documents to show legal Import/possession of the said gold biscuits. The Customs Officers endeavoured to contact Shri Shantilal Jain but he was stated to be absconding. Shri Harish Jain was arrested and produced before the Court. The Court remanded him to judicial custody and later on he was released on bail. Shri Harish Jain filed a retraction of his statement dt. 21.8.97 and submitted a photocopy of the bill No. 217 dt. 18.8.97 from M/s. Sanghvi Enterprises. A statement was recorded from Shri Sunderlal Jain of M/s. Sanghvi Enterprises on 20.8.97. In this statement he deposed that Shri Shantilal Jain had come to the premises of M/s.Sanghvi Enterprises and told him that he wanted a bill for 11 gold biscuits, that he would pay sales tax in cash and in addition he would also pay Rs. 100 per biscuit as commission amounting to Rs. 1100. He stated that as per the instructions of Shri Shantilal Jain, he made a bill from the bill books of M/s. Sanghvi Enterprises for 11 gold biscuits on 20.8.97 but in the bill he put the date as 18.8.97. He handed over this bill to Shri Shantilal Jain. He affirmed that he had given to Shri Shantilal Jain only a bill and no foreign marked gold biscuits were given by him. He also stated that he had not received the amount of Rs. 5,80,000 reflected in the Bill No. 217 dt.
18.8.97. Shri Sunderlal Jain however, filed an affidavit dt. 29.8.97 in the Court and retracted his statement. He was issued summons on 27.8.97, 5.9.97 and 22.9.97 for recording his statements but he failed to comply with the summons. A statement was also recorded from Shri Phoolchand Jain (the proposed recipient of the goods) on 19.8.97. He stated that the 11 foreign marked gold biscuits recovered from Shri Harish Jain were sent by Shri Shantilal Jain; that Shri Shantilal Jain had informed him (Phoolchand) on telephone that he was sending Shri Harish Jain with 11 foreign marked gold biscuits.
2. The proceedings were initiated against Shri Harish Jain, Shantilal Jain, Sunderlal Jain, and Phoolchand Jain which culminated in Deputy Commissioner of Customs (Prev.) Marine and Preventive Wing, Mumbai passing an order dt. 3.5.99/5.7.99 in which he ordered for absolute confiscation of the stated 11 foreign marked gold biscuits under Section 111(d) of the Customs Act, 1962. He further imposed a penalty of Rs. 50,000 (Rupees Fifty Thousand Only) on Shri Phoolchand Jain of M/s. K.K. Chains, a penalty of Rs. 1,00,000 (Rupees One Lakh only) on Shri Harish Jain and a penalty of Rs. 2,00,000 (Rupees Two Lakhs only) on Shri Shantilal Jain under Section 112 of the Customs Act, 1962.
3. All the above noticee parties filed appeals before Commissioner of Customs (Appeals). Air Port, Mumbai. The Commissioner (A) however, vide his order dt. 17.1.2000 dismissed their appeals upholding the order passed by the original authority.
4. The present appeal is filed by the aforestated appellants against the order of the lower appellate authority. The matter is today listed for hearing the stay petitions filed by them. I have heard Shri N.B Sonawane Consultant for the appellants and Shri B.K. Choubey JDR for the respondents. The Ld. Consultant for the appellants is laying great emphasis on the bill No. 217 dt. 18.8.97 issued by M/s. Sanghvi Enterprises for the sale of impugned gold biscuits which is stated to be covering the legitimate transaction. It is contended that the original authority has not verified the particulars reflected in the bill and in the absence of the verification of the same the findings arrived at by him are not sustainable in law specially when gold is not a notified commodity and its import is freely allowed under certain conditions. In support of his contention, the Ld. Consultant is relying on the Tribunal decision in the case of Daroga Singh Prop. Vijay Stores v. Collector of Customs . The reliance is also placed on the decision in the case of Santosh Gupta v. Union of India . In both of these decisions it is held that without verification of the purchase bills produced by the concerned noticee parties the confiscation of the goods under Section 111(d) of the Act, even though of foreign origin is not justified and in these cases such confiscation had been set aside. The emphasis is also laid by the Ld.
Consultant on the fact of retraction of the inculpatory statements given by different noticee parties and it is submitted that the retracted statements would not be admissible as evidence without any corroboration. With regards to the penalty imposed on Shri Phoolchand Jain, it is further contended that he is not the owner of M/s. K.K.Chains that he was only sitting in the shop and had yet not received the impugned gold biscuits. The gold biscuits were seized from Shri Harish Jain even before they were delivered to Shri Phoolchand Jain and therefore the letter would not have been aware of the contraband nature of the goods if at all ultimately they are held to be of smuggled nature. Shri B.K. Choubey, JDR for the Revenue on the contrary reiterates the finding arrived at by the lower authorities in their respective orders and states that each of the noticee parties had given inculpatory statements under Section 108 of the Customs Act, 1962, which are admissible as evidence in terms of the judgments of Hon'ble Supreme Court in the case of Naresh J. Sukhwani v. Union of India .
5. I have carefully considered the submissions made before me. The fact of the recovery of the 11 gold biscuits valued at Rs. 5,83,000 from the person of Shri Harish Jain on 19.8.97 is not in dispute. It is also not disputed that Shri Harish Jain was not in possession of any document covering the legitimate import/purchase or possession of the said gold biscuits. Shri Harish Jain in his statement recorded on the date of seizure itself had admitted that the said gold biscuits were given to him by his uncle Shri Shantilal Jain, who had also cautioned him to carry them with great care since the same were smuggled ones.
Subsequently Shri Shantilal Jain produced bill No. 217 dt. 18.8.97 stated to be issued by M/s. Sanghvi Enterprises covering the sale of the said biscuits to him. However, Shri Sunderlal Jain of M/s. Sanghvi Enterprises in his statement dt. 27.8.97 negated the contents of the said bill and stated that the bill was prepared and issued at the instance of Shri Shantilal Jain on his request and undertaking to pay Rs. 100 per biscuits as commission and the sales tax in cash. He also stated that neither the gold biscuits were given by him to Shri Shantilal Jain nor had he recovered the amount of Rs. 5,80,000 reflected in the stated bill. Though the statements given by Shri Harish Jain and Shri Sunderlal Jain were retracted later but during the course of the hearing, when specifically asked, the Ld. Consultant for the appellants failed to produce any evidence of their first statements being recorded under threat or coercion.
6. In view of the above facts, it is felt that the appellants Shri Harish Jain and Shri Shantilal Jain have not been able to make out a prima facie case in their favour. As regards their financial position, it is submitted that Shri Harish Jain is only a young man and is not doing anything whereas the monthly income of Shri Shantilal Jain is only Rs. 6,000. However, no supporting evidence has been produced before me in support of the stated financial position of these two appellants. With respect to the case of Shri Phoolchand Jain, I find force in the contentions that he had yet not received any part of the gold biscuits. He has though admitted that he was to receive the gold but the mere fact that he was waiting to receiving the gold in itself would not establish his knowledge about the contraband nature of the gold. I therefore hold that prima facie Shri Phoolchand Jain has made out a case in his favour.
7. In view of the above analysis, I direct Shri Shantilal Jain to deposit a sum of Rs. 50,000 and Shri Harish Jain to deposit a sum of Rs. 25,000 on or before 22.1.2001. On making such deposit the balance amounts of penalty imposing on them shall stand waived and its recovery stayed till the disposal of their appeals. The matter will be called for reporting compliance on 26.1.2001.
The deposit of the penalty of Rs. 50,000 imposed on Shri Phoolchand Jain is hereby waived and its recovery stayed till the disposal of his appeal.