1. The Revenue has preferred the above appeals against the order of the Collector (Appeals), Central Excise, Chandigarh by which she has directed release of Indian currency of Rs. 2,28,600/- recovered on 1-1-1991 from Room Nos. 7 and 22 of National Hotel, Amritsar occupied by several persons including the respondents herein, to the respondents and set aside the personal penalty of Rs. 10,000/- imposed upon them by the adjudicating authority.
2. On 1-1-1991, Lahore-Amritsar express train standing in the railway yard of Amritsar Railway Station, was cordoned off by the Customs (Preventive) staff, Amritsar and three persons moving near the rake were challenged and stopped. The three persons were Shri Naseem Ahmed, Sh. Mohd Sadiq and Sh. Jabbar. On questioning them they admitted that they had come to take out the smuggled silver which was concealed in the battery boxes of the said train. Two independent witnesses were called on the spot and all the abovesaid three persons separately identified the place of concealment of the contraband silver and as per their identification, four bandoliers of cloth containing something heavy were recovered from the two battery boxes of the fifth bogie from rear side bearing No. 11003. These bandoliers were opened and examined in the presence of the witnesses and the abovesaid three persons and were found to contain 294 assorted pieces of silver bars which were taken into possession under a recovery-cum-seizure memo on the spot in the presence of the said independent witnesses and the above three persons. On demand they failed to produce any documentary evidence showing the legal import and lawful acquisition of these 294 pieces of silver which were as such seized under Section 110 of the Customs Act, 1962, in the reasonable belief that the same has been imported/smuggled into India illegally in violation of the provisions of Import Control Order No. 17/55, as amended issued under Section 3(i) of the Imports and Exports (Control) Act, 1947 read with Section 11 of the Customs Act, 1962 and Section 13(i) of FERA, 1973 and the same were liable to confiscation.
3. On further interrogation, they revealed that they were staying in National Hotel, Amritsar where two of their companions were staying.
Room Nos. 7 and 22 occupied by the above-mentioned three persons and their companions were searched and Shri Gulshar Ahmed (brother-in-law of Mohd Sadiq) and Sh. Altaf were apprehended and Indian currency amounting to Rs. 2,28,600/- were recovered from the Hotel rooms. Sh.
Nasim Ahmed, Sh. Mohd. Sadiq and Sh. Jabbar revealed that the Indian currency in question was the sale proceeds of smuggled silver disposed of by them earlier.
4. The Addl. Collector of Customs, Amritsar vide order dated 17-9-1992, absolutely confiscated the silver bullion, Indian currency and imposed penalties of Rs. 50,000/- each on S/Shri Naseem Ahmed, Jabbar and Mohd.
Sadiq and penalties of Rs. 10,000/- each on the respondents herein for abetment in keeping/possessing the sale proceeds of smuggled goods.
The Collector (Appeals), Chandigarh held that there was no substantial evidence to conclude that the Indian currency represented the sale proceeds of smuggled silver and directed release of the Indian currency to the present respondents on the basis that they had borrowed the money from various persons who had filed affidavits before the Adjudicating authority and also set aside the penalty. Hence these appeals.
5. Shri K.N. Gupta, learned SDR contends that the respondents have not established their claim to the seized Indian currency and in fact, in their initial statements recorded on 2-1-1991, the respondents had disclaimed the currency and it is only at a very late stage of about 9 months after the seizure that they have come forth with the affidavits of persons who claim to have lent the money to the respondents. He further submits that from the statement of Sh. Gulsher Ahmed, it is brought out that he is only a cot repairer and that he and Sh. Altaf used to prepare food for Sh. Naseem Ahmed, Sh. Jabbar and Sh. Mohd.
Sadiq and therefore, it is highly improbable that anybody would lend large amounts of money to such persons. He submits that Shri Altaf only makes wooden articles and he also used to stay in National Hotel Amritsar and cook food for Sh. Jabbar and others and the explanation that the Indian currency recovered from the Hotel was borrowed by him and Sh. Gulsher Ahmed, is not plausible. Further, most of the persons who have sworn to affidavits regarding lending of money to the respondents, have not made any corresponding entries in their Account books. Shri Gupta further submits that the lower Appellate Authority has erred in holding that the Addl. Collector has not given any reason as to why the affidavits filed by the respondents are not acceptable and in this connection, he draws our attention to internal page 12 of the Adjudication order, recording a finding that the affidavits cannot be accepted as they are belated and appear to have been procured through local influence.
The learned SDR relies upon the statements of Shri Jabbar, Sh. Naseem Ahmed and Sh. Mohd. Sadiq to support his plea that the Indian currency represents sale proceeds of smuggled silver and therefore, the penalty has been rightly imposed upon the present respondents, who had abetted the offence. He therefore, prays that the order of the Collector (Appeals) be set aside and the appeal allowed.
6. Opposing the prayer, Shri J.S. Agarwal, learned Advocate draws our attention to the findings of the Adjudicating authority and in particular, to the factum of retraction of statements by Shri Gulsher Ahmed and Shri Altaf on the very next date i.e. 3-1-1991 in bail application filed by them before the Chief Judicial Magistrate, Amritsar. He also submits that during the course of cross examination, one of the panch witnesses, namely Shri Surinder Kumar had stated that the respondents had stated in his presence that they had brought the Indian currency in question for doing wooden business and therefore, the claim to the same is not belated as it has been staked at the earliest point of time. The learned Counsel however, has no explanation to offer regarding the delay in filing the affidavits of the persons from whom the respondents had borrowed the money. In view of the above, he submits that the department has not satisfactorily made out a case of abetment of offence by the respondents and therefore, prays that the impugned order may be confirmed and the department's appeals rejected.
7. We have heard both the sides and carefully considered their submissions. It appears from a reading of the statements of the respondents recorded on 2-1-1991 that intially they did not claim the currency and on the other hand, they had categorically stated that the currency does not belong to them. Sh. Gulsher Ahmed has stated that his brother-in-law Sh. Naseem Ahmed, revealed to the Customs Officers that the currency was the sale proceeds of silver disposed of at Delhi after smuggling from Pakistan. Sh. Altaf also stated that his maternal uncle Naseem Ahmed had told the Customs Officers that the money represented the sale proceeds of smuggled silver. It is pertinent to note that even in the bail application filed by the respondents before the Chief Judicial Magistrate at Amritsar on 3-1-1991, there is no claim to the currency. The Adjudicating authority has recorded his finding on the currency as follows:- "So far as the seized Indian currency is concerned, I find that the submission of Gulsher Ahmed and Altaf that they had brought money for conducting wood business at Amritsar with the partnership of Gulzar Ahmed of Amritsar and the money was to be invested for the purchase of shop and goods and it was acquired from relatives and friends on returnable basis is not tenable because of the reason that both of them in their original statements as referred to above have denied the ownership of the seized Indian currency and its source of acquisition and disposal. Their subsequent claim lodged after a gap of about 9-10 months after the seizure is an afterthought. Had it been true they would have lodged this claim at the time of recovery or immediately after the seizure was effected which they have failed to do so. I find further though all the deponents during verification of sworn in affidavits in their respective statements have confirmed to have advanced the money to them on returnable basis but none of the transactions has been duly accounted for in any of the account books. I do not give any credence to these affidavits as these appear to have been procured through local influence. The submissions of the party that currency was neither counted nor sealed in the presence of the witnesses is of no significance because they have claimed the ownership of the same at a belated stage. I have seen the depositions of Sh. Subash Chander and Surinder Kumar, Panch withnesses wherein Subhash Chander has confirmed the recovery of Indian currency in his presence. Their depositions that the persons concerned had informed that they had brought the Indian currency for conducting wood business is not believable as they have been won over and gone hostile. Had it been so they could have disclosed this fact before the higher authorities and nobody was going to prevent them to do so." 8. Even at this stage, the respondents have not put forth any explanation as to the delay of about nine months in obtaining affidavits from several persons who are alleged to have lent the Indian currency to them. In view of the belated claim to the currency and the earlier disclaimer thereto by the respondents, the statement of Shri Surinder Kumar Panch witness during cross-examination that the respondents had stated in his presence that they had brought the money for doing wooden business, pales into insignificance. We see force in the learned SDR's contention that the respondents have not established their title to the currency and accordingly set aside its release to the respondents.
9. The next question to be considered is whether the department has discharged the onus under Section 121 of the Customs Act, 1962 to prove that the respondents are concerned in the abetment of smuggling of silver by keeping/possessing sale proceeds thereof and therefore, liable to penal action. We find that the statements of Shri Naseem Ahmed, Jabbar and Mohd. Sadiq have been relied upon to conclude that the seized Indian currency was the sale proceeds of smuggled silver.
However, what is relevant for the purpose of these appeals is whether the respondents can be said to have abetted the smuggling of silver by possessing its sale proceeds. The currency has been recovered from two rooms in National Hotel, Amritsar occupied by the respondents alongwith Shri Naseem Ahmed, Zabbar and Mohd. Sadiq. Both the respondents have stated at the earliest that they know nothing about the currency and that Shri Naseem Ahmed had revealed to the Customs Officer that the currency was the sale proceeds of smuggled silver after smuggling it from Pakistan and that Shri Naseem Ahmed had not told the respondents anything about the smuggling. It cannot therefore, be said that the department has discharged the burden of linking the respondents with smuggling of silver and establishing that they had abetted the smuggling of silver. Accordingly, we extend the benefit of doubt to the respondents and uphold the setting aside of personal penalty imposed upon the respondents.
10. In the result, we set aside the finding of the lower Appellate authority directing release of the seized Indian currency to the respondents and uphold the order relating to setting aside of the penalty. The appeals are disposed of in the above terms.