Judgment:
1. These appeals are against the order of the Collector of Customs, Central Excise, Trichy dated 6.12.1991. Under the impugned order the appellant has been penalised both under the Customs Act and under the Gold (Control) Act, in connection with the seizure of 80 gold bars of foreign origin valued at Rs. 29,93,261/-. The appellant has been penalised for dealing in smuggled gold and for attempting to appropriate the same along with some other police constables and one Ganesan, after two persons, viz., Shri Thangadurai and Shri Murugesan who were travelling by train were found by the constables to be carrying foreign marked gold. Proceedings in the case started with the seizure of 30 gold bars of foreign origin from Room No. 208 of the Barani Lodge, Tirunelveli which was under the occupation of two police constables, viz., S/Shri Thisayaveerapandian and P. Sankaran.
Statements were recorded from the said two police constables and they explained the circumstances under which they came in possession of 30 foreign marked gold bars. As seen in para 2 of the learned lower authority's order, the statement recorded from Shri Thisayaveerapandian is as under: ...that while he was at the railway station, Tirunelveli-Junction on 22.10.1989, an unknown person approached him and showed two suspected persons wearing lungies and having two bags and sitting in the unreserved compartment of Nellai-Madras Express bound for Madras; that one of the said two persons was brought down by him and the other person who was having the two bags was put under the control of the Mobile Police Head Constable Shri Gnanathilakar; that on interrogation, the person who was brought down by him, stated that he was indulging in the smuggling of gold and was proceeding to Madras; that he had delivered gold thrice at Madras by contacting phone No. 32324; that his name was Shri Thangadurai and the 2 bags, which were in their possession contained gold bars with foreign markings; that by that time, the train had left the platform that with the help of another constable Shri Sankaran, he engaged a taxi bearing Registration No. TCT 8383 and proceeded to Madurai with the said Shri Thangadurai, Shri Sankaran and the above said unknown persons; that he brought down the other associate of Shri Thangadurai from the train (Nellai-Madras Express) at the Madurai Railway Station; that they returned (5 persons) to Tirunelveli from Madurai by the same taxi; that on reaching Nellai booked the Room No. 208 at Barani Hotel, Tirunelveli; that he further enquired Shri Thangadurai, who showed him 80 bars of gold, which were kept in 8 packets; that the said Shri Thangadurai offered him 30 bars of gold for leaving them (Shri Thangadurai and his associate); that Shri Thangadurai kept three big packets under the cot occupied by him; that he dropped Shri Thangadurai at Pudukottai (Tuticorin) by the said car; that the plasters were removed by him and the 30 Nos. of gold bars covered in a towel was placed under the cot of the said room by him; that the name of the associate of Shri Thangadurai was Shri Murugesan.
Likewise the other constable Shri Sankaran admitted to the knowledge that two persons, viz., Murugesan and Thangadurai were indulging in gold smuggling and he proceeded to Madurai along with Thisayaveerapandian and corroborated the version of Thisayaveerapandian about the circumstances under which they acquired and possessed the gold bars. Appellant Gnanathilakar, however, stated as under: ...while he was on duty with two constables in the Mobile Police Station on the Madras bound Nellai Express Train, Shri Thisayaveerapandian @ Pulipandian met him; that Shri Pulipandian requested him to arrange reservation of a seat to a person (viz.) Shri Murugesan, who was known to him (Pulipandian) in the said Train; that accordingly he arranged a seat No. 58 in S2 on payment of Rs. 2/- by the said Shri Murugesan, who was in possession of a rexin bag, the contents of which he did not know; that on reaching Madurai at 21.20 hrs., the said Shri Pulipandian came to the compartment and took the said Murugesan with him telling that said Shri Murugesan need not go to Madras; that on reaching Madras he was asked to appear before the Directorate of Revenue Intelligence Officers.
Shri Thangadurai gave a detailed statement in which he has not only implicated himself, but others also and has also set out the manner in which the gold carried by him was apportioned between him and the police constables as a part of the settlement to let them get away with 50 gold bars which were recovered buried under a palmyra tree. The details given by Shri Thangadurai, as set out in the learned lower authority's order are reproduced below for the purpose of convenience: ...at the instance of one Shri Susai of Srilanka he used to indulge in smuggling of foreign gold for commission offered by him; that he took a consignment of gold sent by said Shri Susai landed at Pullaveli Shore near Tuticorin went to Madras and handed over the same to an unknown person, by contacting him over phone number given by said Shri Susai; that he would get Rs. 15,000/- as commission from Shri Susai; that on 21.10.89, he landed 9 plasters each containing 10 gold bars with foreign markings in a bag at Pullaveli shore and got into a bus at Tuticorin on 22.10.89 bound for Tirunelveli; that one Shri Murugesan of Dovipuram used to help him in his smuggling activities; that they purchased tickets for Madras, occupied seats 117 unreserved compartment in Nellai Express bound for Madras; that a policeman in uniform examined the bag possessed by Shri Murugesan and took said Shri Murugesan to the reserved compartment after making arrangements for guarding the said Shri Murugesan; that he alighted him (Thangadurai) from the Train, and started bargaining with him with another person, who appeared to be a Policeman; that he was told by them that they could let him free if he agreed to give amount either equal to half of the value of the gold possessed by him; that he came to know the person in uniform was Shri Gnanathilakar and the other person was Shri Thisayaveerapandian; that by the time the train left the platform; that Shri Thisayaveerapandian detained him in the platform and allowed Shri Murugesan to travel in the said train under the guard of Shri Gnanathilakar, Rajagopalan and Sakthivel to Madras; that Shri Pulipandian fetched another policeman Sankaran, fixed a taxi to go to Madurai; that the said two police constables, and another unknown person and himself boarded the taxi and went to Madurai; that the said two constables brought Shri Murugesan with two bags possessed by him from the train at Madurai; that they all returned to Tirunelveli, booked a room at Hotel Barani, Tirunelveli; that at the lodge the bags were opened, found to contain 8 plasters containing foreign marked gold bars; that both the constables asserted that they never opened the bag after alighting Shri Murugesan from the train; that they took three plasters containing 30 gold bars with foreign markings and gave 5 plaster to him that the said 30 gold bars were secreted under the bed of the cot placed in the room; that he and Shri Murugesan were dropped at Pudukottai (Palayankottai-Tuticorin Road) by the same taxi, by the said two constables; that Shri Murugesan left for Tuticorin and he (Thangadurai) buried the 50 gold bars near No. 1 Palm Tree on the northern side of the trunk road near the western side of the Mani Crushers; that fearing seizure by the Customs Officer, he concealed the gold bars underneath the ground; that Susai gave the phone No. 32323 at Madras this time and promised him Rs. 20,000/- as commission; and that he admitted the offence.
2.9. Vide his statement dated 26.10.89 Shri Thangadurai identified Shri Gnanathilakar, Head Constable who had been referred to by him (Thangadurai) in his statement dated 25.10.89.
Shri Ganesan, who was referred to as a stranger by Shri Thisayaveerapandian has corroborated all the details given by Shri Thangadurai. He has referred to the discussion that took place between Shri Thisayaveerapandian and the appellant and also the close association of the appellant in examining the packets carried by the suspects in which the gold was recovered and his own role in trying to work out a settlement between Thangadurai, Murugesan and the police personnel. The extracts of his statements are reproduced below for the convenience of reference: ...that he brought Shri Thisayaveerapandian on seeking two persons found to be heavy in weight and both the said persons were behaving in a suspicious manner; that they occupied seats in the second class unreserved compartment of Nellai Express; that Shri Thisayaveerapandian who was not in the uniform met Shri Gnanathilakar, duty Head Constable of the Nellai Express, had talks with him; that Gnanathilakar examined the bags possessed by the said two persons and brought one of the said two persons to the reservation compartment, with the said bags, that he made arrangements for guarding the said person; that in the meanwhile he (Ganesan) informed the other persons, who was in the unreserved compartment; that he (Ganesan) would solve the problem, if any, by having talks with Police personnel; that Shri Gnanathilakar came and took the said person also with him; that Shri Thisayaveerapandian and Shri Gnanathilakar had talks with the said persons; that from their talks he (Ganesan) came to know the names of the said persons as Thangadurai and Murugesan and they were smuggling foreign gold and the person, who was taken to the reservation compartment was Murugesan; and that S/Shri Rajagopalan and Sakthivel of Railway Police, Tirunelveli were found along with the said Shri Gnanathilakar. Shri Ganesan further corroborated the statement of Shri Thangadurai regarding his bringing of Shri Sankaran, Police Constable, after getting the address from Thisayaveerapandian in a chit, to the Tirunelveli Railway station, their departure to Madurai by Taxi TCT 8383, bringing of Murugesan with his bags by Shri Thisayaveerapandian and Shri Sankaran from Nellai Express Train at Madurai Railway station, their returning to Tirunelveli by the same taxi with Shri Murugesan, booking of Room No. 208 at Hotel Barani, Tirunelveli by Thisayaveerapandian. He further added that at the room No. 208, they (Pulipandian, Sankaran and Thangadurai) opened the bags, brought by Shri Murugesan, who was kept in the custody of Shri Gnanathilakar and 2 other constables in the train, found 8 plasters containing foreign marked gold. At the time Shri Thangadurai told that he had brought 9 plasters containing 90 gold bars for that Shri Sankaran and Shri Thisayaveerapandian replied that they have opened the bags only then (at the time). It was found to contain 8 plasters only; that they asked Shri Thangadurai to give 30 Nos. of gold bars to them. He (Thangadurai) agreed and kept 30 Nos. of gold bars under the bed of the cot found in the said room.
He dropped S/Shri Thangadurai and Murugesan at Pudukottai (Tuticorin) by the said taxi TCT 8282 and returned to Tirunelveli.
Shri Thisayaveerapandian asked him (Ganesan) to meet him in the morning. He returned home thinking that he would get a share on the value of the said 30 gold bars.
The appellant was issued a show cause notice and was afforded an opportunity of personal hearing. In their reply to the show cause notice the appellant denied the allegations against him. He also pleaded that the statement recorded from him was under threat and coercion and denied any association with Shri Thisayaveerapandian and Thangadurai. The learned lower authority has however treated the statements given by the appellant and others as voluntary and has also noted that the allegation of threat and coercion have been made by the appellant for the first time on 22.10.1990, while replying to the show cause notice, almost a year after recording the statement. Further he had not probabilised his version by cross examination of officers who had recorded the statement from him, nor produced any evidence in support of his plea that the statement was recorded under coercion.
Taking into consideration the statement given by various persons and the evidence available on record the learned lower authority has held that the appellant is liable to penalty under Section 112 of the Customs Act and also under Section 74 of the Gold (Control)) Act and levied a penalty of Rs. 20,000/- and Rs. 4000/- under each of the two enactments respectively.
2. The learned Advocate for the appellant pleaded that there has been a denial of principles of natural justice inasmuch as the adjournment request for personal hearing had not been allowed by the learned lower authority. It was pointed out to the learned Counsel that the learned lower authority has clearly recorded in the order that though ample opportunities were given for the purpose of personal hearing, they have not availed of the same. He could not establish with the help of any date chart showing that the learned lower authority has indeed been indifferent to the requests of adjournment. Pleading on the merits of the case, he pleaded that the appellant had been let off in the prosecution proceeding and that would go to show that the evidence against the appellant was Very tenuous which was not sufficient to prove the charge against him. He further pleaded that the appellant had not given any inculpatory statement and what all he stated was only that he arranged for reservation for Shri Murugesan and that could not be a reason enough for penalising the appellant under Section 112 of the Customs Act, 1962 and Section 74 of the Gold Control Act. It was pointed out to the learned Advocate that the appellant was a Head Constable and the other persons involved only constables and his role has been brought out not only by the persons who have been held as carriers of gold but also by the police personnel from whom 30 bags of gold were recovered and also an outsider, Shri Ganesan.
3. Shri learned D.R. pleaded that the statement of various persons clearly shows that the appellant was involved in settling this matter regarding the smuggled gold and he took active part in apportioning the gold between the police personnel and the carriers of the gold. He pleaded, the appellant's belated plea that the statements were recorded from various persons under coercion has been dealt with by the learned lower authority that the retraction was belated and the plea of coercion has not been probabilised by any evidence, nor the appellant had chosen to cross examine those persons who have implicated him.
4. I have given a careful thought to the pleas made by both the sides.
It is seen that the proceedings in the case started with the recovery of gold from a room in occupation of two police constables, viz., Shri Thisayaveerapandian and Shri Sankaran. In their statements given before the Customs officers the two police constables came out clean as to how they came in possession of the said gold and gave the details of the interception of the two persons viz., Shri Thangadurai and Murugesan from the train at the behest of Shri Ganesan and the subsequent role of the appellant Shri Gnanathilakar, who was a Head Constable in charge of mobile railway party. The constables being Govt. officials and also being parts of law enforcement force could not have implicated themselves when they fully knew the consequences of the statements that they were giving, unless it was true. There is nothing on record to show that these statements given by them were not voluntary. Their belated plea of any coercion has not been probabilised. As observed by the learned lower authority they did not complain to the Magistrate before whom they were produced for the purpose of remand about any threat or coercion. Obviously, having been found in possession of foreign marked gold bars, they had no explanation and came out clean with the facts. They have clearly implicated the appellant and his role in the whole sordid affair. The appellant was a Head Constable and in that capacity he could have stopped the whole affair from developing into a settlement between the smugglers and the police and should have handed over the gold to the Customs authorities. Instead of that he has succumbed to the temptation and became a part of the deal which has landed not only him but others also in trouble. He kept a guard over Murugesan and associated himself fully with other police constables and Ganesan in hushing up the whole affairs by becoming a shareholder in the booty kept by the police constables. There is no reason why Shri Ganesan should implicate the appellant. It is seen that the versions of the police constables, Shri Ganesan, Shri Thangadurai and the Taxi driver all tallied as to the movement of the appellant from one station to the other and finally dropping the smugglers after they were let off and after the apportioning of the smuggled gold had been settled between the appellant and other police constables and the smugglers. In view of the above, I hold that the learned lower authority has rightly held the appellant liable for penalty under Section 112 of the Customs Act for having been concerned in sharing the smuggled gold and dealing with the smuggled gold. The penalty, in the facts and circumstances, Rs. 20,000/- under the Customs Act and Rs. 4000/- under the Gold (Control) Act cannot be considered excessive or harsh and therefore, I uphold the same. The appeals are, therefore, rejected.