Judgment:
1. Since the above appeals arise out of the common impugned order of the Collector of Customs, Cochin, dated 3.5.1989, they are consolidated and disposed of by a single order.
2. The appeals are directed against the penalty of Rs. 5.000 on appellant Selvam under two counts and Rs. 10,000 on two counts on the other appellants respectively under the provisions of the Customs Act, 1962 and the Gold (Control) Act, 1968.
3. On 6.1.1988 at about 10.00 AM, the Inspector of Central Excise, Special Customs Preventive Division, Calicut, along with his party intercepted one N. Selvam at Palayam Bus stand, Calicut, and found him in possession of 49 gold biscuits of foreign origin. Out of the 49 gold biscuits, 40 gold biscuits were found to have the markings "CREDIT SUISSE 999.0 10 TOLAS ESSAYAR FONDEUR" and the remaining 9 gold biscuits had the markings "UNION BANK OF SWITZERLAND 10 TOLAS MELTER ASSAYER 999.0". The total weight of the 49 gold biscuits was found to be 5713.400 gms. each biscuit weighing 116.6 gms. Since the said Selvam could not account for the licit possession and acquisition of the same, the authorities effected seizure of the same under a mahazar as per law. Selvam gave a statement before the authorities on 6.1.1988 and 10.2.1988 inter alia stating that he was employed under the other appellants and he was asked by appellant Krisbnamurthy to go to Calicut and obtain gold biscuits from one Salim and that be went to Calicut and waited for Salim in the auto-stand and Salim came there at 9.30 A.M.and handed over the gold biscuits. He further stated that he was a carrier for appellant Krishnamurthy and was paid Rs. 500 per month and the appellant Krishnamurthy gave him Rs. 400 for going to Calicut. The authorities also in a follow up action recorded statements from appellant Krishnamurthy on 6.1.1988 and 25 2.1988 and the second statement on 25.2.1988 was inculpatory in nature. Appellant Mohan also gave an inculpatory statement on 19.2.1988. It is in these circumstances proceedings were instituted against the appellants resulting in the impugned order appealed against.
4. Shri Sabapathi, the learned Consultant for the appellants, at the outset submitted that the appellants are totally denying the case of the Department and contended that they have nothing to do whatever with the gold biscuits under absolute confiscation under the impugned order.
The learned Consultant submitted that there was no need for the authorities to record two statements from appellant Selvam on 6.1.1988 and 10 2.1988 and Selvam also retracted the statements. It was urged that the statement of appellant Krishnamurthy on 6.1.1988 is exculpatory in nature and, therefore, the inculpatory statement recorded from him on 25.2.1988 has no evidentiary value It was further submitted that while Selvam retracted his inculpatory statement on 1.2.1988 and 1.4.1988, Krishnamurthy retracted on 3.3.1988 while Mohan retracted his inculpatory statement of 19.2.1988 on 29.2.1988.
5. Shri Sabapathi, the learned Consultant, submitted that in view of subsequent retraction the inculpatory statements do not have any evidentiary value in law. The learned Consultant further urged that there was no need for the authorities to record a second statement and the very recording of second statement indeed is suspicious to discredit the statement as not voluntary. The learned Consultant placed reliance in this context on the ratio of the Division Bench ruling of the Gujarat High Court in the case of Motilal Lalchand Shah v. L.M.Kaul and another to contend that subsequent improved version in the second statement cannot be accepted in law. Shri Sabapathi submitted that in the show cause notice the precise sub-section of the charge relating to the penal provision has not been set out resulting in prejudice to the appellants in the conduct of the defence. It was urged that except a bare mention of Section 112 it is not set out in the show cause notice as to whether the offence alleged to have been committed by the appellants was within the mischief of Sub-section (a) or Sub-section (b) and this vital omission, it was contended, would vitiate the impugned order. In this connection the learned Consultant placed reliance on the ruling of the Madras High Court in the case of B. Lakshmichand v. Government of India, reported in 1983 ELT 322 (Mad ). The learned Consultant also submitted that the ratio of the Madras High Court ruling has been followed by the Special Bench of the CEGAT in the case of Collector of Cus. and Central Excise, Chandigarh and Anr. v. Ajit Singh and Anr.
. The learned Consultant further submitted that the various statements recorded from the persons bristled with material contradictions Mer se and, therefore, the statements are not entitled to any credence, ft was further urged that since all the appellants are in the position of accomplices and since they retracted their confessional statements the same cannot be relied upon in law in the absence of corroboration in material particulars and in this connection reliance was placed on the ruling of the CEGAT West Regional Bench in the case of Moti Meghraj Gehi v. The Collector of Customs, Bombay, . Finally, it was contended by the learned Consultant that there is absolutely no evidence against appellant Gopinath and the evidence on record against appellant Krishnamurthy is very flimsy and would not warrant the imposition of penalty on him. It was submitted that all the inculpatory statements were recorded under threat and coercion and the mahazar witnesses have given a complete go by to the version recorded in the statements as well as in the tnahazar in cross-examination. The learned Consultant in particular specifically drew our attention to that part of the cross-examination where the mahazar witnesses have stated that their signatures were taken in the office and the be containing the gold biscuits was picked up by one of the mahazar witnesses from the road and handed over to the authorities. The learned Consultant also assailed the impugned order on the ground that the adjudicating authority has not on proper application of mind adverted to the various facts in favour of the appellants and given a finding thereon.
6. In regard to the penalty under the Gold (Control) Act, it was contended that except mentioning the infraction under Section 8(1) of the Act, no specific allegation in regard to the offence committed by the appellants has been set out and, therefore, it was urged that the penalty is not sustainable in law. It was contended that under Section 70 of the Gold (Control) Act the authorities are under a statutory obligation to furnish the persons concerned with the copy of the statement immediately on demand and non-compliance of the same was in this case responsible for the belated retraction which would not militate against the appellants in the facts and circumstances of the case.
7. Shri Bhatia, the learned Senior D.R., submitted that the recovery of substantial quantity of gold biscuits of foreign origin is established not only by the mahazar but also by the recovery of the gold biscuits themselves. The learned Senior D.R. submitted that the inculpatory statements contain a plethora of factual details which would only establish that they are voluntary and true. The learned Senior D.R.submitted that the plea of coercion in recording the statements has not been substantiated much less even probablised.
8. We have carefully considered the submissions made before as. On going through the facts and evidence we are satisfied that on 6.1.1988 at or about 10.00 A.M. 49 gold biscuits of foreign origin with foreign markings were actually recovered from the possession of appellant Selvam. Even assuming for the purpose of arguments that the testimony of the mahazar witnesses cannot be relied upon to sustain the charge that would not ipso facto prove that the appellants were not concerned with the gold biscuits in question. Even if the mahazar witnesses have turned hostile the testimony of the seizing officer, which is not admittedly challenged in the cross -examination in the present case, is entitled to credence and acceptance. We have gone through the inculpatory statements recorded from Selvam and we are satisfied that they are voluntary and true and would merit acceptance. Likewise, we are also satisfied that the statements of appellant Krishnamurthy on 25.2.1988 and Mohan on 19.2.1988 are voluntary and true and would merit acceptance. The plea of the learned Consultant that copies of the statements were not given with the result there was a delay in retraction is not acceptable. To a specific query the learned, Consultant admitted that the statements have been written by the appellants themselves in their own hand and it cannot be pretended that the appellants did not know the nature of the statements, which they had recorded in their own hand and subscribed to the same before the authorities in connection with the seizure of the gold biscuits of foreign origin. There was no initial reaction at all on the part of the appellants and such inaction is only consistent with the conduct of a guilty mind in the facts and circumstances of the case. The plea or the learned Consultant that non-mention of the sub-section of the penal provision under Section 112 of the Customs Act, 1962 would vitiate the impugned order is not tenable in the circumstances of this case. The purpose of a charge or a show cause notice is only to put the affected party on notice of the various circumstances appearing in evidence against the party and to afford the party in conformity with the principles of natural justice a reasonable opportunity of defence and in the present case the show cause notice is very elaborate and sets out all the necessary ingredients of the charge. The appellants also at no point of time expressed any difficulty in construing the nature of the allegations levelled against them in the show cause notice or expressed any want of understanding with reference to the charges they were called upon to meet much less put forth any plea in regard to any alleged vagueness or ambiguity in the content thereof. Therefore, the ratio of the Madras High Court ruling in the case of B. Lakshmichand v.Government of India, cited by the learned Consultant, has no application to the facts and circumstances of this case.
9. The plea of the appellants that the appellants being in the position of accomplices their evidence should be corroborated in material particulars and there is want of corroboration in the present case is also not correct. The recovery of gold biscuits of substantial quantity would itself afford adequate corroboration to the statements of the appellants and it it a settled proposition of law that in adjudication proceedings as in criminal case the retracted confession does not call for corroboration in material particulars and if the circumstances by way of some corroboration lend assurance to the conscious (sic) of the Court it would be sufficient enough to accept the statements of persons who may be placed in the position of accomplices. The belated retraction, which were referred to above, would assume considerable significance in the context of acceptability of the incriminating statements recorded from the appellants in their own hands. Merely because the Departmental authorities recorded a second statement from that circumstance alone it cannot be contended that the second statement is an improved version and would not merit acceptance. As a matter of fact appellant Mohan, who is the brother of appellant Krishnamurthy and Goomath has given a statment detailing his connections and the connections of his brothers with the gold under seizure on 19.2.1988 about 1 month after the seizure and there is no reason as to why he should have given this incriminating statement containing very many factual details unlen it was true. Though the plea of coercion was put forth before us, admittedly it was not substantiated or even probabilised for that matter and the officer who is alleged to have practised the coercion was not even cross-examined.
The learned Consultant to a specific query from us specifically stated that the appellants are not making any grievance or putting forth any plea of prejudice on the ground that the seizing officer was not made available for cross-examination and indeed gave up that contention before us. It is fairly well-settled that if a person sets up a plea of coercion or undue influence, the various circumstances in regard to the same should be specifically pleaded and probabilised and excepting the vague allegation there is nothing on record with reference to the nature of coercion or compulsion alleged to have been practised out the appellants by the authorities in bringing about the statements in question. The facts in the case of Motilal Lalchand Shah v. L.M. Kaul and Anr. of the Division Bench ruling of the Gujarat High Court, cited supra, are clearly distinguishable and have no application to the facts of the present case.
10. The plea of the appellants that there was no specific charge of contravention under the Gold (Control) Act is also not acceptable in the light of the evidence on record.
11. Therefore, on consideration of the entire evidence on record, we hold that the charges of contravention under the Customs Act and Gold (Control) Act have been clearly brought home against the appellants Selvam, Krishnamurthy; and Mohan. We, therefore, confirm the findings of the adjudicating authority in regard to these appellants: 12. So far as appellant Gopinath is concerned, he has not given any inculpatory statement nor is he implicated in the statements of the other persons and, no doubt, on going through his statement, it engenders in out mind a grave suspicion about Gopinath and suspicion however grave it might be can scarcely take the place of proof in proceedings which are penal in nature. We are, therefore, inclined to give appellant Gopinath the benefit of doubt in the facts and circumstances of this case and by giving the same exonerate him of the charges and set aside the penalty levied on him under the Customs Act and Gold (Control) Act.
13. Shri Sabapathi at this stage pleaded for reduction in the quantum of penalty on the other appellants. Having regard to the fact that the appellants were concerned in the seizure of 49 gold biscuits of foreign origin weighing 5713.400 gms. valued at Rs. 20,28,257 we do not think that the penalty on the appellants under the Customs Act warrants any reduction. We, therefore, confirm the penalty imposed on the appellants under the Customs Act in entirety. But so far as the penalty under the Gold (Control) Act is concerned, since the same circumstances technically give rise to an offence under Gold (Control) Act. 1968, we are inclined to think that the interests of justice would be met if the penalty on appellant Selvam is reduced to Rs. 500 (Rs Five hundred) and on the other appellants reduced to Rs. 1,000/- (Rs. One thousand) each.... But for the above modifications, the appeals of appellants Selvam, Krishnamurthy and Mohan (Appeal Nos. C/641/89; C/643/89; C/615/89 and G/524/89; G/526/89 ft G/509/89) are otherwise dismissed and the appeals by appellant Gopinath (C/642/89 and C/525/89) are allowed.