Judgment:
ORDER
1. This petition under Section 482 Cr.PC seeks quashing of the order passed by the learned Special Judge for Economic Offences, Hyderabad dismissingthe petition filed on behalf of the petitioners for discharging them.
2. The prosecution case may be summarised as follows :
On 22-7-1987 the Officers of the Directorate, Revenue Intelligence, Madras assisted by the Central Excise Officers, Hyderabad intercepted A2 and A4 (not the petitioners) while they were alighting from an auto rickshaw before the petrol bunk of M/s. M.K. Agencies, Secunderabad on a reasonable belief that the said persons were clandestinely transporting smuggled gold. Both of them when subjected to metal detection test in the presence of witnesses admitted that they were carrying five gold bars each concealed in their rectums and voluntarily ejected and handed them over to the Officers. They also admitted that the sender of gold was a person from Fort Market, Bombay whose details they could not furnish. They further stated that they were asked to wait near Aryanivas Lodge where some persons would pick up the gold from them. The Officers seized the gold biscuits. They also recorded the statements of A2 and A4 under Section 108 of the Customs Act (hereinafter called 'the Act') on 27-7-1987 and 28-7-1987 respectively.
3. It is stated that the investigation disclosed that A3 was acquiring clandestinely foreign marked gold biscuits and he was having dealings with A1, who is a gold dealer, and in pursuance of their understanding A3 sent 10 gold biscuits on 17-7-1987 through A2 and A4, which was delivered to Al. Again on 27-7-1987 A3 sent 10 gold biscuits, which were seized by them. On the basis of these allegations in the complaint the learned Special Judge for Economic Offences, Hyderabad has taken the case on file as CC No.3 of 1997. The trial was taken up and PWs.l to 5 were examined and Exs.P1 to P12 were marked. At this stage, before framing charges, thepetitioners herein filed an application for discharge on various grounds. The learned Special Judge dismissed that application on 9-2-2000.
4. It is stated that adjudication proceedings were initiated against A2 and A4 after issuing show-cause notice. The Collector of Customs, Central Excise, Hyderabad by his order dated 16-1-1990 confiscated 10 gold biscuits seized from A2 and A4 under Section 111(d) of the Act and imposed a penalty of Rs. 15,000-00 on each of the said accused on two counts under Section 112(b) of the Act and under Section 74 of the Gold Control Act. Against the said orders A1 filed an appeal before the Customs Excise and Gold (Control) Appellate Tribunal, Madras (hereinafter called the CEGAT). The appellant authority by its order dated 9-4-1994 remanded the matter to the Collector of Customs and Central Excise, Hyderabad. After remand the Commissioner of Customs and Central Excise, Hyderabad by his order dated 19-3-1995 imposed a penalty of Rs.3,00,000/-against Al under Section 112(b) of the Act. Aggrieved by the said order A1 again preferred an appeal to CEGAT, Madras. The said appeal was allowed on 23-3-1999 setting aside the order dated 19-3-1995 passed by the Commissioner, Customs and Central Excise,
5. The proceedings in the CC are sought to be quashed on two grounds. Firstly, it is contended by the learned Counsel for the petitioners Sri C. Padmanabha Reddy that in view of cancellation of the penalty by the appellate authorities i.e., CEGAT, the criminal proceedings cannot be continued further inasmuch as the criminal complaint itself is based upon the adjudication order passed by the Collector, Customs and as the adjudication proceedings have been set aside by the appellate authority, the proceedings in the criminal prosecution cannot continue.
6. It is secondly contended that at any rate there is no material implicating the petitioners except the alleged confessional statements made by A2 and A4 recorded under Section 108 of the Act and even these accused had retracted from their earlier statements. Thus, it is contended that in view of Section 30 of the Evidence Act the confession of the accused cannot be used against a co-accused as substantive evidence and under these circumstances, the proceedings must be quashed.
7. The learned Standing Counsel for Customs and Central Excise Mr. V. Gopala Krishna, on the other hand, contends that the appellate order passed by the CEGAT would reveal that, what the Tribunal held was, after remand the primary Tribunal could not have imposed a penalty higher than the original penalty which has been appealed against and in which appeal the matter was directed to be remanded. There is some substance in this contention. Para 4 of the order of the CEGAT passed in appeal C/865/98, dated 19-3-1995 may be extracted.
'The short point to be decided is as to whether higher penalty can be imposed in remand proceedings. It is well settled law that in remand proceedings a greater burden cannot be placed upon the person than the one, which was already placed in the original order prior to remand. Having regard to this legal position I find substance in the learned Counsel's submission that the remand order is bad in law, since it imposes a penalty of Rs.3,00,000/- while the original order of 1990 imposed penalties of Rs.15,000-00/-each under the Customs Act and Gold (Control) Act.
In view of the above, I set aside the impugned order and allow the appeal.'
8. Thus, it is obvious that what the appellate Tribunal held was that the primaryauthority's imposition of a penalty of Rs.3,00,000-00 as against the penalty of Rs.15,000/- originally imposed is illegal. By no stretch of imagination can it be said that the appellate authority found on any ground that the entire proceedings are liable to be set aside. The finding of the appellate authority is based on the principle that when the matter is remanded to the primary authority the said authority on hearing the remanded matter cannot subject the litigant to higher burden than the one imposed under its original order. The mere fact that in the conclusive part of the order the appellate authority has purported to set aside the impugned order, does not change the character or nature of the order passed by the appellate authority. It is not a case where the appellate authority has held that no case was made out against the persons concerned to justify imposition of any penalty. The mere statement by the appellate authority that the impugned order is set aside does not help the petitioners herein to contend that inasmuch as adjudication proceedings have been set aside there is no point in continuing the prosecution of the criminal case.
9. At any rate, it has been held by the Supreme Court in the case of Assistant Customs Collector, Bombay v. L.R. Melwani, : 1970CriLJ885 , that dropping of adjudication proceedings does not bar prosecution for an offence under Section 135 of the Customs Act. It has been followed by this Court in the case of K. Neelakana Rao and other v. the State of A.P. Rep. by the Special Public Prosecutor for Central Excise, Crl. P No. 1444 of 2000, dated 11-4-2000 (unreported). Thus, it is apparent that successful conclusion of adjudication proceedings for confiscation of goods under Section 111 and imposition of penalty under Section 112 of the Act against the accused is not sine qua non for launching prosecution against him for an offence under Section 135 of the Act. Thus, the criminal proceedings cannot be quashed on that ground.
10. The second contention urged by the learned senior Counsel for the petitioners Sri C. Padmanabha Reddy is that in this case except the alleged confessional statement of accused No.2 and accused No.4 recorded under Section 108 of the Customs Act, there is no other evidence incriminating the petitioners and inasmuch as such a confessional statement in regard to co-accused does not constitute substantive evidence under Section 30 of the Evidence Act, there is no possibility of the prosecution ending in conviction and it will be abuse of process of law if the proceedings are continued.
11. The learned Standing Counsel for the respondent Sri Gopala Krishna counters this contention by pointing out that a statement recorded under Section 108 of the Customs Act is not hit either by Section 25 or Section 26 of the Evidence Act and is a perfectly admissible piece of evidence for proving an offence under Section 135 of the Customs Act. The learned Counsel cites the judgment of the Supreme Court in the case of K.L Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, : 1997(90)ELT241(SC) , in support of his contention. The fact that a person suspected of an offence under Section 135 of the Customs Act whose statement is recorded under Section 108 of the said Act does not acquire character of an accused at that stage and that a customs officer is not a police officer and that a statement recorded by a customs officer of that person is under statutory compulsion and such statement if voluntarily offered by the said person is admissible in evidence is beyond any pale of controversy or doubt and the decision cited by the learned Counsel above referred vouchsafes for this position of law.
12. In fact, the learned Counsel for the petitioner Sri C. Padmanabha Reddy does not deny that a statement of a personsuspected of an offence under the Customs Act recorded under Section 108 of the Act is admissible in evidence. His contention is entirely on a different footing. The contention is that as far as a co-accused is concerned, such a statement does not constitute a substantive piece of evidence within the meaning of Section 3 of the Evidence Act. At best, according to the learned Counsel, Section 30 of the Evidence Act permits the Court to take into consideration such confession as against a co-accused.
13. The law relating to the use of a confession of an accused against co-accused is enshrined in Section 30 of the Evidence Act, As held by the Supreme Court, such a confession can be used against a co-accused only upon satisfaction of certain conditions as stipulated under Section 30 of the Evidence Act. As held by the Supreme Court in the case of Kalpanath Rai v. State, 1998 Crl.LJ 369, the first condition is that there should be a confession i.e., inculpatory statement. Any exculpatory admission is not usable for any purpose whatsoever as against a co-accused. The second condition is that the maker of confession and the co-accused should necessarily have been tried jointly for the same offence. In other words, if the co-accused is tried for some other offence, though in the same trial, the confession made by one is not usable against the co-accused. Third condition is that the confession made by one accused should affect himself as well as the co-accused. In other words, if the confessor absolves himself from the offence but only involves the co-accused in the crime, while making the confession, such a confession cannot be used against the co-accused.
14. The Supreme Court further held that even if these conditions are satisfied 'the use of confession as against co-accused is only for limited purpose i.e., the same can be taken into consideration as against suchother person. The Supreme Court further held that the confession made by one accused is not substantive evidence against co-accused and that it has only a corroborative value.
15. Here, it may be pointed out that this judgment was cited before the learned Special Judge and the learned Special Judge held that this decision was not applicable to the facts of the case inasmuch as it was rendered with reference to the confessions recorded under Section 15 of the Terrorist and Disruptive Activities (Prevention) Act, 1987 (for short TADA Act) and whereas in the present case, the statements were recorded under Section 108 of the Customs Act. This difference in facts in no way has any bearing as to the law laid down by the Supreme Court on the question of admissibility of a confession as against co-accused under Section 30 of the Evidence Act.
16. Section 15 of the TADA Act in fact enacts an exception to the general rule laid down under Section 25 of the Evidence Act under which a confessional statement made to a police officer has been declared as inadmissible in evidence. Section 15 of the TADA Act removes this disability and confessional statement recorded by an officer of rank of Superintendent of Police has been rendered admissible in evidence. In this case, as noted above, there is no controversy as to the admissibility of the statement of the accused recorded under Section 108 of the Customs Act. Just as a statement recorded under Section 108 of the Customs Act is admissible in evidence, a statement of an accused recorded by the Superintendent of Police under Section 15 of the TADA Act is also admissible in evidence.
17. In the case of Haricharan Kufrmi v. State of Bihar, : 1964CriLJ344 , it has been held that while dealing with acase, the Court cannot start with the confession of co-accused and it must begin with other evidence adduced by the prosecution and after it has formed its opinion with regard to the quality and effect of the said evidence, then it is permissible to turn to the confession in order to receive assurance to the conclusions of the guilt which the judicial mind is about to reach on the said other evidence. The following observations in that judgment are of significance :
'Thus, the confession of a co-accused person cannot be treated as substantive evidence and can be pressed into service only when the Court is inclined to accept other evidence and feels the necessity of seeking for an assurance in support of its conclusion deducible from the said evidence.'
18. The real question is that what is the probative value of the confession of an accused for establishing the criminal liability of his co-accused. In the judgment of the Supreme Court cited above, the law on this aspect with reference to Section 30 of the Evidence Act has been laid down. I am unable to agree with the opinion of the learned Special Judge that simply because in the facts of that case, a confessional statement was recorded under Section 15 of the TADA Act, the law laid down is not applicable to the present case.
19. The complaint filed against the petitioner herein would show that as per the facts brought to light by the confessional statement of accused Nos.2 and 4, accused No.3 Champalal Shah gave foreign marked gold slabs to A2 and A4 at Bombay for being delivered to A1 at Secunderabad and that both A2 and A4 after taking the gold slabs from A3 travelled in a bus and got down from the bus at Lakadi Ka Pool and while they were going to Secunderabad in an auto, they were intercepted by an officerand interrogated. The statements were duly recorded by the Customs Officer under Section 108 of the Customs Act and they were said to have furnished the telephone numbers of accused Nos.l and 3. When confronted accused No.2, identified accused No.1 while A1 claimed that he did not know these persons and that he never saw them earlier.
20. The complaint as filed in the Court does not disclose that any other piece of evidence has been collected during the investigation except the statement of A2 and A4 to the above effect. In view of the law laid down by the Supreme Court, it is obvious that a confession as against co-accused is only of a limited use i.e., the same can be 'taken into consideration' as against the co-accused. It has been held as stated above that the confession made by one accused is not substantive evidence against co-accused and that it has only a corroborative value. When the confessional statement of co-accused is the only piece of evidence which prosecution seeks to rely upon and the complaint does not disclose any other piece of evidence, which can be considered as a substantive in nature or any piece of evidence which can even be used for corroboration of the confessional statement of the co-accused, then the result is that there is no substantive evidence incriminating the accused which is available with the prosecution. The real position is that the confession of a co-accused can be pressed into service only for lending assurance to other evidence brought on record by the prosecution against the accused. Thus, the confession of co-accused cannot constitute the sole basis for convicting an accused on a criminal charge.
21. In fact, during the course of arguments, in an answer to a query, the learned Standing Counsel for the Customs Department has stated that except this evidence by way of a confessional statementof a co-accused, the Customs Department has been unable to secure any other evidence connecting the petitioner with the alleged offence. At any rate, the complaint which I have read carefully does not disclose any other evidence which appears to be available against the accused.
22. In the result, it is futile to expect that any criminal Court would be able to record a conviction against the petitioners on the basis of the evidence consisting solely of a confessional statement of a co-accused.
23. The learned Standing Counsel for the Customs Department, Sri Gopala Krishna, however, made a feeble attempt to contend that the confessional statement of one or co-accused (accused No.2) is corroborated by a similar statement by another co-accused A4. It is well settled that tainted evidence cannot boost or enhance the evidentiary value of another piece of similarly tainted evidence.
24. Thus, considering the special circumstances of this case, there is no escape from holding that in the absence of any evidence apart from the confession of the co-accused connecting the petitioners with the alleged offence, it will be abuse of process of law to continue the criminal proceedings against the petitioners.
25. In the result, this petition is allowed and the proceedings against A1 and A3 in CC No.3 of 1997 on the file of the Special Judge for Economic Offences, Hyderabad are quashed.