Full Judgment
2. The appeal was initially filed by Shri A.N. Agarwal, appellant, against whom a penalty of Rs. 1 lakh had been imposed under Section 112 of the Customs Act and his claim for release of 7 gold biscuits (out of total 19 seized gold biscuits) had been declined. He, however, during the pendency of the appeal died and his widow, Smt. Mamta Agarwal, was brought on record.
3. The facts are not much in dispute. On 18-3-2000, the police officers of Rath (Hamirpur) conducted search of the residential premises of Shri Rakesh @ Kallu and effected recovery of 19 gold biscuits of foreign origin and Indian currency of Rs. 9,37,722/-. They, later on, informed the Customs Authorities and on receipt of the information, the Customs Officers took possession of the seized biscuits and the Indian currency on 31st March, 2002 after drawing proper Panchnama. At the time of recovery, the police also recorded statement of Shri Rakesh @ Kallu wherein he stated that the goods recovered belonged to Shri Tulsidas Agarwal, neighbour, who had kept the same with him due to security reasons. Thereafter, the Customs Officers also recorded his statement wherein he disclosed that the goods were left at his house by Smt.
Susheela Devi, wife of Shri Tulsidas Agarwal and his daughter Smt.
Suman Agarwal, for security reasons, and that he came to know the contents, and the nature of the goods which were in the trunks, only when the police opened those trunks. He also disclosed that Shri Tulsidas Agarwal was known to him for more than 10 years and was not only a cloth merchant and also doing some money lending business.
Thereafter, the Customs Authorities summoned Shri Tulsidas Agarwal, who claimed the biscuits and the Indian currency, being the owner. He further disclosed that he had purchased the biscuits from the market and the Indian currency seized was his income from the business transactions. Statement of Shri Tulsidas Agarwal was recorded again on 26-8-2000 wherein he claimed 12 biscuits for having purchased the same from M/s. Brijwasi Distributors, Lucknow, under invoices during the period 7-1-2000 to 6-3-2000. He also produced the photo copies of those invoices along with the affidavit He further in his statement disclosed that the other 7 biscuits belonged to his son, Shri A.N. Agarwal (now deceased), who purchased the same from M/s. Dhan Cholia Sons under the cover of invoices. Thereafter, Shri A.N. Agarwal, also appeared before the Customs Authorities and made a statement vide which he claimed the 7 biscuits and produced the copies of 4 invoices vide which he purchased the same from M/s. Dhan Cholia Sons, Chandni Chowk, Delhi.
4. The Adjudicating Authority, however, did not accept the version of Shri A.N. Agarwal, and his father, Shri Tulsidas Agarwal, and ordered absolute confiscation of all the 19 gold biscuits by holding the same to be smuggled one, besides imposing penalty of Rs. 1 lakh each on them.
5. The present appeal, as observed above, was initially filed by Shri A.N. Agarwal, who had claimed 7 biscuits and on whom penalty of Rs. 1 lakh had been imposed by the Adjudicating Authority. After his death, his widow has been brought on record being his heir and entitled to claim the seized biscuits.
6. I have heard both sides and gone through the record. The learned Counsel has contended that since the recovery of the gold biscuits was initially effected by the police, the provisions of Section 123 of the Customs Act were not attracted and as such no presumption that the seized biscuits were smuggled one, could be legally drawn. The burden to prove that the seized gold biscuits were smuggled goods was on the Department, but the Department had failed to discharge the same. In support of his contention, he has placed reliance on the ratio of the law laid down by the Apex Court in the case of Gian Chand v. State of Punjab - 1983 (13) E.L.T. 1365, which has been followed by the Tribunal in the case of Jai Narain Verma v. CC, New Delhi -1994 (72) E.L.T. 567 (T), wherein it has been observed that provisions of Section 123 of the Customs Act will not be attracted for drawing the presumption where the recovery of the foreign origin gold biscuits had been effected by the police.
7. The learned Counsel has also contended that Shri A.N. Agarwal had adduced sufficient evidence to prove the legal and valid purchase of the seized biscuits from M/s. Dhan Cholia Sons of Chandni Chowk and the copies of the invoices produced by him had been wrongly ignored without any evidence that those were fake/bogus. Even no statement of any partner/employee/representative of M/s. Dhan Cholia Sons, was recorded and as such the genuineness of the invoices could not be doubted. The impugned order, according to the learned Counsel, to the extent to which it has been challenged in the present appeal, deserves to be set aside.
8. On the other hand, the learned JDR, has reiterated the correctness of the impugned order.
9. I have heard both sides and gone through the record. It remains undisputed that recovery of the gold biscuits in question was effected from the house of one Shri Rakesh @ Kallu by the police. The recovery effected was in all of 19 gold biscuits of foreign origin, besides the Indian currency. But he disclosed that these gold biscuits belonged to his neighbour, Shri Tulsidas Agarwal, father of Shri A.N. Agarwal (deceased). Even, Shri Tulsidas Agarwal, in his statement recorded on 5-9-2000 claimed his personal ownership of 12 biscuits which he purchased from M/s. Brijwasi Distributors and produced the copies of the invoices. Regarding the remaining 7 gold biscuits, he disclosed that these belonged to his son, Shri A.N. Agarwal who has purchased the same from M/s. Dhan Cholia Sons. Shri A.N. Agarwal in his statement also claimed the ownership of 7 seized biscuits (with which we are concerned in the present appeal) and disclosed that he had purchased it from M/s. Dhan Cholia Sons. Prior to making of his statement on 5-9-2000, he even supplied photo copies of the invoices through which he made the purchase on different dates, to the Customs Authorities on 1-9-2000. The copies of those invoices have been also placed on the filed. There is nothing on the record to suggest if any partner/employee/representative of the said firm came forward to disown the sale of 7 gold biscuits to Shri A.M. Agarwal and the issuance of the invoices. The Adjudicating Authority has ignored these invoices by simply observing that the shop of M/s. Dhan Cholia Sons normally remained closed and was opened occasionally and as such it could not be accepted that purchase of the biscuits was made by Shri A.N. Agarwal from that concern. This view of the Adjudicating Authority for ignoring the invoices, cannot be legally sustained. No attempt was made to contact any partner/employee of that firm in order to doubt the correctness of the version put forth by Shri A.N. Agarwal. In the absence of any evidence to doubt the correctness of the invoices, the plea of Shri A.N. Agarwal of having purchased the biscuits in question from the above said firm against payment, could not be brushed aside, rather it should have been accepted by the Adjudicating Authority.
10. Moreover, there is not an iota of evidence on the record to suggest if the gold biscuits in question were smuggled goods. No presumption regarding their smuggled character could be drawn in view of the ratio of the law laid down by the Apex Court and then followed by the Tribunal in the above referred cases. It was for the Department to prove the smuggled character of the seized gold biscuits, but they had failed to do so. Much importance could not be attached to the fact that there was a difference of 285.07 gms. in actual weight of the 7 gold biscuits claimed by Shri A.M. Agarwal and the weight recorded in the invoices. In fact, Shri A.N. Agarwal's father Tulsidas in his statement had clearly explained this difference and even in the show cause notice, the statement made by him, has been reproduced. He in his statement clearly stated that 285.07 gms. gold from the biscuits was given by him to his brother-in-law, Shri Jagdish Agarwal for making ornament for his daughter-in-law, Smt. Mamta Agarwal, His explanation could not be, therefore, overlooked, especially when there was no evidence to contradict the same. Moreover, for this minor difference in weight, no presumption could be drawn that the gold biscuits were smuggled biscuits in the light of the discussion made above.
11. In view of the discussion made above, the impugned order of the Adjudicating Authority regarding confiscation of 7 gold biscuits belonging to Shri A.N. Agarwal and imposition of penalty of Rs. 1 lakh on him is set aside. The seized gold biscuits (seven in number) are ordered to be released to his widow, Smt. Mamta Agarwal.
12. The appeal accordingly stands accepted in the above terms with consequential relief, if any, permissible under the law.