Ranjana Desai, J.
1. In this writ petition filed under Article 226 of the Constitution of India, the petitioners have prayed for quashing of Order dated 3/12/1992 passed by respondent 5 i.e. the Collector of Customs (Preventive), Bombay (for short, 'the Collector of Customs') being Order No. 48/92 and Order dated 29/12/1995 passed by the Customs Excise and Gold (Control) Appellate Tribunal (for short, 'the CEGAT') in appeals arising therefrom.
2. It is necessary to begin with the facts. Petitioner 1 claims to be a broker and dealer in diamonds. He is also a partner of M/s. Sudit Gems, a firm carrying on business at Navsari. Petitioner 2 is also a broker and a dealer in diamonds.
3. Pursuant to specific information, the officers of M & P Wing of Customs visited, on 21/3/1991, the business premises of M/s. M. Ambalal & Co. at S.V. Road, Bombay, and apprehended one Rajendra @ Raju, who was standing outside the premises with a cloth bag in his hand, which, on subsequent examination was found to contain 7390.82 carats of diamonds valued at Rs. 79,40,506.25. They were claimed by the firm, but no accounts were found to have been maintained for the same. Inside the premises, one Dayabhai Patel, partner in the firm as also, Ukabhai Patel and Himatbhai Thedi were present, and while search was in progress, Dharmendra Shah, Shailesh Jogani i.e. petitioner 1 and Pankaj Jogani i.e. petitioner 2 entered the premises. The search of the premises resulted in recovery of 410.18 carats of diamonds valued at Rs. 4,20,324.50 not duly accounted for and also of some loose papers, suspected to be the accounts of diamonds not recorded in the account registers of the firm. Personal search of the other persons in the premises resulted in recovery of 127.17 carats of diamonds valued at Rs. 61,854/- from Ukabhai J. Patel, 66.64 carats of diamonds valued at Rs. 1,53,272/- from Himatbhai Thedi, 27.87 carats of diamonds valued at Rs. 97,545/- from Dharmendra Shah, 2.57 carats of diamonds valued of Rs. 4,455/- from petitioner 2, 223.75 carats valued at Rs. 4,56,618/- from petitioner 1. In addition, the officers also recovered 83.01 carats of diamonds from petitioner 1, but released the same on his providing due explanation. The officers also recovered unaccounted diamonds weighing 866.49 carats valued at Rs. 12,997/- from Locker No. 303 in the name of Maganbhai Dayabhai and diamonds weighing 6681.01 carats valued at Rs. 4,11,294.66 from Locker No. 1073 of Ravjibhai Ambalal. Another business premises of M/s. M. Ambalal at Parekh Market were also searched and 4206.56 carats of unaccounted diamonds valued at Rs. 3,93,386.87 were recovered. The diamonds recovered were seized and statements of the persons concerned were recorded and on completion of the investigation, show cause notice dated 12/9/1991 followed by the corrigendum dated 28/8/1992, notifying the change in the adjudicating authority, were issued.
4. The petitioners contested the show cause notice. On behalf of the petitioners, the investigating officer and the jewelery appraiser were cross-examined. It was urged that by mere physical examination even the experts cannot say with certainty that the diamonds are of foreign origin; that the goods are not notified under Chapter IVA; that there is no statutory requirement of maintaining documents/records; that non availability of documents like Jhangad, etc. is at best an irregularity but not an illegality; that the petitioners are not concerned with M/s. M. Ambalal & Co.; that their presence in the premises was a mere coincidence and therefore, there is no reasonable belief for effecting the seizure of diamonds from them; that the Superintendent although physically present could not have supervised the recording of seven different statements; that identical language has been used in the statements and these statements should have more appropriately been recorded under Section 107 of the Customs Act, 1962 and the provisions of Section 123 of the Customs Act, 1962 are not applicable to the case and that there is no evidence to justify the confiscation of diamonds and imposition of penalty.
5. The Collector of Customs upon considering the relevant material and the submissions advanced on behalf of the noticees ordered confiscation of seized diamonds from Rajendra Bhamra and M/s. M. Ambalal & Co. He gave option to redeem the said diamonds. He ordered payment of appropriate duty on the said diamonds. So far as petitioner 1 is concerned, he ordered confiscation of 223.75 carats of diamonds valued at Rs. 4,50,618/-. He gave option for redemption of the said diamonds on payment of fine of Rs. 3 lakhs. He ordered confiscation of 2.57 carats of diamonds valued at Rs. 4,955/- from petitioner 2. He gave him an option to redeem the said diamonds on payment of Rs. 2,500/-. He imposed penalty under Section 112(b)(i) of the Customs Act, 1962 on petitioner 1 and ordered him to pay Rs. 40,000/-. He also imposed penalty on petitioner 2 under the same provision and ordered him to pay Rs. 1,000/-.
6. The said order was challenged by the petitioners along with M/s. M. Ambalal & Co. before the CEGAT. The CEGAT by order dated 29/12/1995 allowed the appeal filed by Rajendra Bhamra and Dharmendra Shah. The CEGAT partly allowed the appeal filed by Himatbhai Thedi so far as the personal penalty is concerned. The CEGAT, however, rejected the appeals of the petitioners and confirmed the order of the Collector of Customs (Preventive) Bombay. Being aggrieved by the said orders, the petitioners have preferred this appeal.
7. We have heard Mr. Kanuga, learned Counsel appearing for the petitioners. We have also carefully perused the written submissions filed on behalf of the petitioners.
8. Gist of the arguments of Mr. Kanuga, learned Counsel for the petitioners:
a) There is an error apparent on the face of order of the Collector of Customs and the order of the CEGAT as they have proceeded on the footing that the burden of proving that the diamonds were not smuggled into India was on the petitioners. The proceedings under the Customs Act being penal in nature, the burden of proving its case is always on the Department except where the goods are notified under Chapter IV-A or Section 123 of the Customs Act, 1962 which is not the case here. Sections 106 and 114 of the Evidence Act have no application as the onus is on the Department to prove that the goods are tainted.
b) The Collector of Customs as well as the CEGAT have misread the judgment of the Supreme Court in Collector of Customs, Madras and Ors. v. D. Bhoormall : 1975CriLJ545 . The CEGAT has observed that it is held in that judgment that since it is exceedingly difficult, if not impossible for the prosecution agency to prove the facts which are specifically within the knowledge of the opponent, the prosecution is not obliged to prove them as a part of its primary burden. On the contrary, in that case, the Supreme Court has held that even if a person who is to be proceeded against has a special or peculiar knowledge of facts, the Department is not relieved of its burden to establish that the goods have entered into the country illegally and the said goods were smuggled. This view is followed by the Division Bench of this Court in Commissioner of Customs v. Shri Ganesh Enterprises 2006 (73) RRT 320 and the Commissioner of Customs v. Akash Enterprises in Customs Appeal No. 11 of 2006 decided by Division Bench of this Court [R.M. Lodha & J.P. Devadhar, JJ.] on 8/3/2006.
c) The CEGAT has wrongly observed that petitioner 1 had no documentary evidence to substantiate his case that he had purchased the seized diamonds from a trader in Navsari. In fact, by letters dated 2/4/1991 and 24/4/1991, he retracted his statements dated 22/3/1991 and 23/3/1991 and explicitly stated that the diamonds were not smuggled and that he was willing to produce and give accounts and information. He gave names of suppliers - Ramesh T. Shah and Mayank Diamonds Private Limited and others. He addressed several letters to the Customs praying for release of the diamonds.
d) The finding of the CEGAT that only after issuance of show cause notice, names of the parties were specifically furnished for part quantity of diamonds and no details were furnished for the balance quantity is wrong. Letters dated 2/4/1991 and 24/4/1991 establish this. Besides the petitioners made personal visits seeking opportunity to produce documents. Letter dated 3/9/1991 was addressed to the Department expressing readiness to show all original documents. The petitioners addressed letters forwarding documents and ledger accounts showing that polished and cut diamonds are not of foreign origin. The Department did not verify the documents. The Department did not obtain any expert's opinion. The finding recorded by the Collector of Customs that incorrect and improper details claimed by the petitioners have not been specified in the letter and that the petitioners have not denied that the diamonds were of illicit nature is wrong because in letter dated 2/4/1991 and in subsequent letters the petitioners have specifically stated that the diamonds are not contraband. The CEGAT committed an error when it stated that the documents were not produced when in fact they were produced.
e) Both the petitioners are carrying on business in diamonds at Navsari. They had given their addresses. Petitioner 1 has a workshop. Diamond business is his ancestral business. He had given names of suppliers. Petitioner 2 is a broker and goods found with him were hardly worth Rs. 4,000/- and were freely available. Both the petitioners have nothing to do with M/s. Ambalal & Co. They are not it's employees. When they entered the premises of M/s. Ambalal & Co., their search was conducted and diamonds were recovered. The officers of the Customs could never have had reasons to believe that they were carrying smuggled goods. The seizure is therefore illegal as reasons to believe were not based on any cogent material. Buying of rough diamonds, getting them polished and selling them is not prohibited in law.
f) The alleged confessional statements of the petitioners were recorded when they were detained for three days and three nights. They are involuntary and false statements. They are hit by Section 24 of the Indian Evidence Act. Initial burden of proving that the confession is voluntary is on the Department. Alleged confessional statements and retractions have not been considered in their proper perspective. Judgment of the Supreme Court in Vinod Solanki v. Union of India : 2009(233)ELT157(SC) completely supports the petitioners.
g) In the circumstances, the impugned orders deserve to be set aside.
9. Gist of the arguments of Mr. Desai, learned Counsel for the respondents.
a) The petitioners have not been able to produce any documents to prove the legitimate origin of the diamonds.
b) Identity of the sellers is not established. There is no account of the seized diamonds. There are no vouchers to establish that they are not smuggled diamonds. Only after show cause notice was issued, some particulars were supplied but they were not satisfactory. The documents subsequently produced could not be linked to seized diamonds.
c) In this connection, judgment of the Supreme Court in Shah Guman Mal v. State of A.P. 1980 SCC (Cri.) 432 is important. In that case, it is held by the Supreme Court that if the accused failed to disclose identity of the person who gave him the smuggled gold it was open for the court to presume under Sections 106 and 114 of the Evidence Act that the gold in his possession was smuggled and imported without permission.
d) Judgment of the Supreme Court in Bhoormall's case (supra) supports the respondents. In that case, it is held that on the principles underlying Section 106 of the Evidence Act, the burden to establish facts relating to smuggling which remain in the special knowledge of the person concerned in smuggling, is on him and if he fails to explain those facts, adverse inference of fact may arise against him.
e) The judgment of the Supreme Court in Vinod Solanki's case (supra) has no application to this case because there the Supreme Court was dealing with FERA. That judgment must be restricted to it's peculiar facts.
f) Apart from the judgment in Bhoormall's case, the respondents are relying on the following judgments:
i) State of Maharashtra v. Natwarlal Damodar Soni : 1980CriLJ429 .
ii) Union of India v. Harshad Doshi 2006 206 ELT 4.
iii) KTMS Mohammad and Anr. v. Union of India : 1992CriLJ2781 .
iv) K. Pavunny v. Asstt. Collector of Central Excise : 1997(90)ELT241(SC) .
g) In view of the above, the concurrent view of the authorities below does not deserve to be disturbed.
10. Before we deal with the rival contentions it is necessary to have a look at the Supreme Court's judgments in Bhoormall's case and in Vinod Solanki's case because while the respondents are heavily relying on Bhoormalls' case, the petitioners' case rests on Vinod Solanki's case.
11. In Bhoormalls's case, according to the Customs Department smuggled goods were recovered from the premises of M/s. Shah Rupaji on a search conducted by the officers on the basis of information. One Baboothmull, who was present replied that he was not the owner of those goods and somebody next door had left the goods there. Later one Bhoormall turned up to claim the goods. Adjudication proceedings were held in which Bhoormall's solicitor participated. The Collector while conceding that the burden of proving the goods to be smuggled goods rested on the Department, held that such burden prima facie stood discharged, as the circumstances irresistibly led to the conclusion that the goods had been illicitly imported. Appeal filed against the said order was dismissed by the Central Board of Revenue. Learned Single Judge dismissed the writ petition filed challenging the said order. In Letters Patent Appeal, the Division Bench of the High Court held that the onus to prove that the goods had been smuggled was on the department and that it had not shifted on Bhoormall. The Supreme Court referred to Section 178A of The Sea Customs Act, 1878 which is similar to Section 123 of the Customs Act with which we are concerned here. We will quote Section 178-A as well as Section 123 of the Customs Act because that will show that the ratio of Bhoormall's case is applicable to the present case also. Section 178-A reads thus:
178A.
(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.
(2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, cigarettes and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf.
(3) Every notification issued under Sub-section (2) shall be laid before both Houses of Parliament, as soon as may be after it is issued.
Section 123 of the Customs Act reads thus:
123. Burden of proof in certain cases. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be (a) in a case where such seizure is made from the possession of any person,
(i) on the person from whose possession the goods were seized; and
(ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person;
(b) in any other case, on the person, if any, who claims to be the owner of the goods so seized.]
(2) This section shall apply to gold [and manufactures thereof] watches, and any other class of goods which the Central Government may by notification in the Official Gazette, specify.
12. The Supreme Court observed that Section 178-A applies to goods specified in Sub-section 2. With regard to those goods, if they are seized in the reasonable belief that they are smuggled goods, the burden of proof that they are not such goods shall be on the person from whose possession they were seized; but with regard to any other goods the rule in Sub-section (1) of Section 178-A would not apply unless the Central Government had applied the same by notification in the Official Gazette. Since no such notification was issued in the case before it, the Supreme Court observed that in respect of such goods the basic canons of criminal jurisprudence and natural justice would apply. The Supreme Court observed that in proceedings for imposing penalties under Section 167(8) of the Sea Customs Act to which Section 178-A does not apply the burden of proving that the goods are smuggled goods is on the Department. However, the law does not require the prosecution to prove the impossible. The Department has to establish its case with such a degree of probability that a prudent man may on its basis believe in the existence of the fact in issue. The Supreme Court further observed that since it is difficult for the prosecution to prove facts which are especially within the knowledge of the accused it is not obliged to prove them as part of its primary burden. Paragraph 32 of the judgment is material. It reads as under:
32. Smuggling is clandestine conveying of goods to avoid legal duties. Secrecy and stealth being its covering guards, it is impossible for the Preventive Department to unravel every link of the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the persons concerned in it. On the principle underlying Section 106, Evidence Act, the burden to establish those facts is cast on the person concerned, and, if he fails to establish or explain those facts, an adverse inference of fact may arise against him, which coupled with the presumptive evidence adduced by the prosecution or the Department would rebut the initial presumption of innocence in favour of that person, and in the result, prove him guilty. As pointed out by Best (in Law of Evidence' 12th Edn. Article 320. page 291), the 'presumption of innocence is, no doubt, presumptio juris; but every day's practice shows that it may be successfully encountered by the presumption of guilt arising from the recent (unexplained) possession of stolen property, though the latter is only a presumption of fact. Thus the burden on the prosecution or the Department may be considerably lightened even by such presumptions of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden, to discharge which, very slight evidence may suffice.
13. Thus the Supreme Court accepted that in respect of goods which are not specified in Sub-section 2 of Section 178-A and in respect of which no notification is issued by the Central Government the burden of proving that they are not smuggled goods lies on the Department. Referring to Section 106 of the Indian Evidence Act, which states that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him, the Supreme Court observed that failure to establish facts by a person which are within his special knowledge will lead to an adverse inference being drawn against him which coupled with the presumptive evidence adduced by the Department would rebut the initial presumption of innocence in favour of that person. But the Supreme Court clarified that the special or peculiar knowledge of the person proceeded against will not relieve the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden to discharge which very slight evidence may suffice.
14. In Vinod Solanki's case, the Supreme Court affirmed its view in Bhoormall's case and went on to consider what would be the effect of a retracted confession for the purpose of levy of penalty under FERA. It is the contention of the respondent that since this case deals with the provisions of FERA, it is not applicable to the present case. In our opinion, though the provisions of FERA were involved in Vonod Solanki's case, the general principles as regards evidentiary value of a retracted confessional statement laid down therein can be considered in the present case also. In that case the appellant's office premises were searched. Search resulted in the recovery of Indian Currency of Rs. 265,000/-. The appellant was detained. He made confessional statements confirming that all the transactions in the name of the two firms had been made by him but no import of goods had taken place in the name of the said firms. He confessed that he was responsible for remittances of the foreign exchange. He was, therefore, arrested for alleged violation of Sections 8(3) and Section 9(1)(a) of the FERA. He retracted his confessional statement. Show cause notice was issued to him. He contended that no reliance should be placed on the retracted confession unless it is corroborated substantially in material particulars by some independent evidence. The appropriate authority relying on the confessional statement imposed penalty on the appellant. The Tribunal confirmed the said order. The Tribunal placed the burden of proving that the confession was voluntary on the appellant. On appeal the High Court concurred with the Tribunal's view. The Supreme Court disagreed with the High Court. The Supreme Court referred to Section 71(2) of the FERA and observed that the burden of proof related to use of the foreign exchange for the purpose for which permission was granted to acquire it and not to possession. There was no reverse burden and no presumption of commission of an offence under the FERA. The Supreme Court observed that the evidence brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidence. The Supreme Court further observed that initial burden to prove that the confession was voluntary in nature would be on the Department. In the context of Section 106 of the Indian Evidence Act, the Supreme Court restated what it had stated in Bhoormall's case that the special and peculiar knowledge of the person proceeded against would not relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of the fact in issue. It may only alleviate the burden to discharge and very slight evidence may suffice. The Supreme Court further observed that to arrive at a finding as to whether the retracted confessional statement is voluntary or not, the court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant features. The Supreme Court further went on to say that mere retraction of a confessional statement may not be sufficient to make the confessional statement irrelevant, but the court is obligated to take into consideration the pros and cons of the confession and retraction made by the accused.
15. The principles which can be deduced from the above judgments for the purpose of deciding the present case can be summarised as under:
(1) Where any goods which are specified under Sub-section (2) of Section 123 of the Customs Act, 1962 are seized under the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods are seized. Such goods would obviously include goods which are specified by the Central Government by notification in the Official Gazette.
(2) In case of other goods which are not covered by Sub-section 2 of Section 123 and in respect of which no notification is issued the basic cannons of criminal jurisprudence and natural justice will apply. The burden of proving that the goods are smuggled will be on the Department.
(3) However, the Department has to establish its case with such a degree of probability that a prudent man may on its basis believe in the existence of the fact in issue.
(4) The Department is not obliged to prove facts which are especially within the knowledge of the proceedee as part of its primary burden because under Section 106 of the Indian Evidence Act, the burden of proving facts which are specially within the knowledge of a person is on him.
(5) However, the special or peculiar knowledge of the person proceeded against will not relieve the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden, to discharge which very slight evidence will suffice.
(6) The evidence brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidence.
(7) Initial burden to prove that the confession was voluntary in nature is on the Department.
(8) To arrive at a finding as to whether the retracted confessional statement is voluntary or not, the court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant features.
(9) The mere retraction of a confessional statement may not be sufficient to make the confessional statement irrelevant, but the court is obliged to take into consideration the pros and cons of both the confession and the retraction made by the accused;
16. We shall examine this case in the light of the above principles. It is true that diamonds are not notified under Chapter IV of the Customs Act nor are they notified under Section 125 thereof. Therefore, onus of proving that the diamonds are of foreign origin and are smuggled into India is on the Department. However, the Department has not to prove the impossible. It has to establish it's case with such a degree of probability that a prudent man may on it's basis believe in the existence of the fact in issue (Bhoormall's case).
17. None of the persons present at the office premises could satisfactorily explain from whom the diamonds were purchased. They did not give particulars of the sellers from whom the diamonds were purchased. These facts were within their special or peculiar knowledge, which the Department cannot prove and is not expected to prove. In view of the non-disclosure of facts which were within the special knowledge of the persons from whom the diamonds were seized, the burden to prove that the diamonds were smuggled which undoubtedly rested on the Department is alleviated. Very slight evidence is, therefore, sufficient to discharge it. The circumstances which the Department is relying on to discharge this burden need to be now examined. There are certain glaring circumstances which discharge the alleviated burden resting on the Department. It is pertinent to note that large quantity of diamonds valued at Rs. 79,40,506.25 was found in the search. The diamonds were not covered by vouchers. Loose chits were recovered by the officers. They contained accounts of diamonds. But the seized diamonds were not reflected in the normal books of accounts of the firm. There was a big discrepancy in the physical stock, stock ledger and the books of accounts. Mr. Mahendra Gandhi, the accountant of M/s. Ambalal & Co. stated that the diamonds were recovered under REP licence. However, no duty paying documents were forthcoming to establish the legitimate nature of the diamonds. It is pertinent to note that even under searching cross-examination seizing officer Shri Sanar has maintained that he was not acting merely on the basis of information but the attending circumstances were so overwhelming and strong as to give rise to a reasonable belief that they were smuggled into India. The employee of the firm, Raju, who was standing outside the shop with huge quantity of diamonds tried to run away. He had to be apprehended. He stated that he had instructions to run away. All these circumstances in our opinion, are sufficient to substantiate the case of the Department that the diamonds were smuggled and the argument that their origin was not established by their examination, must be rejected.
18. We must now go to the confessional statements. Apart from the above circumstances, there are confessional statements of the proceedees in which they have admitted that the diamonds were smuggled into India. Since the confessional statements have been retracted the initial burden to prove that they are voluntary in nature is on the Department. But to arrive at that finding the court has to bear in mind the attending circumstances. The Department can rely on the attending circumstances to show the voluntary nature of the confessional statement. The court has to weigh the pros and cons of the confession and retraction. It must evaluate both. It must find out whether confessional statement is substantially corroborated by other cogent evidence. If there is such corroboration, it can be relied upon.
19. We have already narrated the circumstances which substantiate the Department's case. They provide the needed corroboration to the confessional statements. Besides from the order of the Collector of Customs, it is apparent that he has considered the confessions as well as the retractions. After going through the confessional statements of Maganbhai Patel and Ambalal Patel and their retractors, he has observed that there was no denial of the fact that Rajesh Bhamre alias Raju, the employee of the firm who was standing outside the premises with a bag of diamonds had instructions to run away in case he finds the Custom Officers approaching. It has also not been denied that the diamonds valued at Rs. 79,40,506.25 were recovered from him and no document regarding their illicit acquisition was produced. Ownership of these diamonds was claimed by Maganbhai Patel.
20. So far as the retraction of the appellant Shailesh is concerned, the Collector of Customs has rightly observed that he has stated that 'Therefore the veracity of the statements are disputed and the said statements with regard to incorrect/improper details are duly retracted'. This is a very vague retraction. The incorrect/improper details claimed by him have not been specified by him in the letter. He has also not specifically denied the illicit nature of the diamonds. In the facts and circumstances of the case, we are not inclined to accept the submission of Mr. Kanuga that the confessional statements were recorded while the appellants were in detention and they are involuntary. There is enough corroborative evidence on record to establish that the confessional statements are voluntary statements and that the retractions are clearly an afterthought.
21. Mr. Kanuga contended that the CEGAT has wrongly observed that petitioner 1 had no documentary evidence to substantiate his case that he had purchased the seized diamonds from a trader in Navsari. Mr. Kanuga submitted that he had given the names of the suppliers. Both the petitioners had forwarded letters to the Department along with documents but the Department did not verify them.
22. We have no hesitation in rejecting this submission. The bonafides of the Department can be seen from the fact that the Department released diamonds unconditionally where petitioner 1 submitted documents to support legal acquisition. However, where he could not produce such documents, those diamonds were seized. It is also pertinent to note that the Commissioner of Customs has stated that he had gone through the documents belatedly supplied by the petitioners. He has stated that invoices of M/s. Mayank Diamonds Private Limited for 110.8 carats had reference to jhangad slip dated 14/3/1991 and a copy of jhangad slip is also available. He has further observed that the quantity shown under jhangad slip dated 14/3/1991 and invoice dated 30/3/1991 is covered in 5 packets whereas the corresponding consignment under seizure was covered in 16 packets. He has observed that segregation of diamonds is made on the basis of quality and it is unlikely that the said documents related to diamonds under seizure. He has further observed that the documents produced could not be linked to the consignment of diamonds under seizure and that the said documents are not genuine documents. These observations are not disturbed by the CEGAT. We concur with this view. In our opinion, apart from the fact that the documents produced by the petitioners do not bear out the petitioners' case, the time taken to furnish them reflects on their authenticity.
23. Belated attempt made to reconcile the stock of diamonds by enclosing copies of documents by M/s. Ambalal & Co. vide their letter has also rightly been repelled by the Collector of Customs. Mr. Kanuga's case that the petitioners have nothing to do with M/s. Ambalal & Co. can never stand the scrutiny of the court in view of the fact that they entered the premises of M/s. Ambalal & Co. with diamonds which could not be accounted for.
24. So far as M/s. Aakash Enterprises case (supra), is concerned in that case this Court has reiterated what the Supreme Court has said in Bhoormall's case that in case of non-notified goods even if a person who is to be proceeded against, has a special or peculiar knowledge of facts, the Department is not relieved of its burden to establish that the goods have entered into the country illegally and that the said goods were smuggled. The Supreme Court has clarified that special knowledge only alleviates that burden, to discharge which very slight evidence will suffice. We have examined the present case in the light of this observation and come to a conclusion that the Department has discharged the burden. M/s. Aakash Enterprises case, therefore, does not help the petitioners. For the same reasons, judgment of this Court in Shri Ganesh Enterprises' case (supra) also does not help the petitioners.
25. In the ultimate analysis we are of the view that the concurrent finding of fact recorded by the authorities below does not call for interference. In this connection, we may again refer to Bhoormall's case. In that case, the Division Bench of the High Court felt that the circumstantial evidence was not adequate enough to establish the smuggled character of the goods, beyond doubt and, hence, it interfered with it in its jurisdiction under Article 226 of the Constitution of India. Disapproving the High Court's approach, the Supreme Court observed as under:
37. Even if the Division Bench of the High Court felt that this circumstantial evidence was not adequate enough to establish the smuggled character of the goods, beyond doubt, then also, in our opinion that was not a good ground to justify interference with the Collectors order in the exercise of the writ jurisdiction under Article 226 of the Constitution. The function of weighing the evidence or considering its sufficiency was the business of the Collector or the appellate authority which was the final tribunal of fact. 'For weighing evidence and drawing inferences from it', said Birch, J. in R. v. Madhub Chunder (1873) 21 WR Cr. 13, 'there can be no canon. Each case presents its own peculiarities and in each common sense and shrewdness must be brought to bear upon the facts elicited'. It follows from this observation that so long as the Collector's appreciation of the circumstantial evidence before him was not illegal, perverse or devoid of common sense, or contrary to rules of natural justice, there would be no warrant for disturbing his finding under Article 226. The Collector's order was not of this kind.
26. In this case, the Collector's appreciation of evidence appears to us to be unassailable. It is neither illegal, nor perverse or devoid of common sense or contrary to rules of natural justice. It is confirmed by the CEGAT. Concurrent finding of fact deserves to be upheld. In our opinion, the petitioners have made out no case warranting our interference with the impugned orders. Hence, the petition is dismissed.