Aftab Alam Verus Director of Enforcement - Court Judgment

SooperKanoon Citationsooperkanoon.com/1114859
CourtAppellate Tribunal for foreign Exchange New Delhi
Decided OnJul-13-1992
Case NumberAPPEAL NO. 899 OF 1990
JudgeR.L. MEENA, CHAIRMAN
Advocates:S.N. Bhatnagar for the Appellant. Shamsuddin for the Respondent
Excerpt:
foreign exchange regulation act, 1973 - section 8 - comparative citation: 1993 (66) taxman 402 (ferab)1. this appeal arises against the adjudication order no. adj/68/90/ 9594 dated 26-9-1990 whereby a penalty of rs. 44,000 was imposed on the appellant for violation of the provisions of section 8(1) of the foreign exchange regulation act, 1973 ('the act'). 2. briefly stated, the facts are that the appellant was travelling in air india flight no. a-i 742 from dubai to bombay on 17-7-1989. pursuant to an information that certain persons travelling from dubai to bombay via delhi in the said flight were carrying foreign exchange/documents in violation of the provisions of the act, the passengers were checked at delhi airport. as a result of the search of the person and baggage of the appellant, shri aftab alam and the seat no. 53-j occupied by him, three gold button shaped pieces lying beneath the seat no. 53-j, one gold ball pen and two gold rings and some documents were recovered from the appellant and seized. the quantity of the seized gold was 225 gms. the appellant disclosed in his statement dated 17-7-1989 that he borrowed from his uncle, shri sultan khan, uae dhirams 400 which he spent while he was in dubai and that he borrowed foreign exchange equivalent to rs. 53,000 from shri irfan khan with which he purchased the gold. as the above facts disclosed contravention of section 8(1) of the act, a show-cause notice (memo no. t4/24/a/up/1990/8272-1973 dated 17-5-1990) was issued to the appellant, alleging that the appellant, a person resident in india other than an authorised dealer in foreign exchange, without the previous general or special permission from the rbi, acquired/borrowed foreign exchange to wit. uae dhirams 400 and foreign exchange equivalent to rs. 53,000 for purchasing foreign gold and other goods and thereby contravened section 8(1). as the explanation of the appellant was not found satisfactory, adjudication proceedings were drawn against him. the adjudicating officer found the appellant guilty of having contravened the provisions of section 8(1) and imposed the penalty mentioned above. 3. i have heard the counsel of the parties and have perused records of the case. 4. the counsel for the appellant submits that while the rings and the ball pen belongs to the appellant, the three button shaped pieces of gold recovered from beneath the seat did not belong to the appellant, that the appellant neither borrowed 400 dhirams from his brother nor borrowed the foreign exchange equivalent to rs. 53,000 from shri irfan khan of dubai, that the confessional statement dated 17-7-1989 was obtained under threat and that the said statement was neither voluntary nor true. the counsel for the appellant further submits that the confessional statement was recorded after the appellant was arrested and that a statement obtained during arrest cannot be said to be voluntary. it was also contended on behalf of the appellant that the appellant's statement dated 17-7-1989 has to be read as a whole as also along with his subsequent statements dated 24-7-1989 and 14-5-1990. the counsel for the appellant also submits that the confessional statement dated 17-7-1989 was retracted by the appellant at the earliest opportunity and it is not legally permissible to rely on a retracted statement unless it is corroborated. the counsel further contends that the entire case is based on a concocted story and that the adjudicating officer had not considered the fact that another passenger was occupying the seat no. j-53 when the appellant boarded the aeroplane at dubai and the appellant was not even given opportunity to examine the air hostess who on the request of the appellant, asked the another passenger to vacate the seat no. 53-j. the counsel placed reliance on p. mansoor mohd. ali jinnah v. dy. director [1989] 42 taxman 126 (mad.) (corp. mag.), kishore chand v. state of himachal pradesh air 1990 sc 2140, palvinder kaur v. state of punjab 1953 scr 94, hanumant govind nargundkar v. state of mp air 1952 sc 343, bhagwan singh rana v. state of haryana air 1976 sc 1797, roshan beevi v. joint secretary to the government of tamil nadu [1984] 15 elt 289 (mad.)(fb), hindustan steel ltd. v. state of orissa [1972] 83 itr26 (sc) and shri krishnadas tikara v. state of m.p. air 1977 sc 1691. 5. the counsel appearing for the respondent submits that all the statements of the appellant are to be read together in order to ascertain the truth and that when so read together clearly indicate that the confessional statement of the appellant would undoubtedly appear to be voluntary. 6. in roshan beevi's case (supra), the full bench of the madras high court has held that a person summoned under section 107 or section 108 of the customs act can neither be said to be under the custody of the custom officials nor can be deemed to have been arrested. in view thereof, since the appellant had appeared before the e.o. for giving the statement dated 17-7-1989 in pursuance of the summons issued to him, the appellant cannot be deemed to be under arrest. as such, mere appearance will not amount to taking a person into custody. further, it may be stated that as the enforcement officers are not "police officers" within the meaning of sections 25 and 26 of the evidence act, a confessional statement made before an enforcement officer will not become inadmissible in evidence merely because it is made before him. the ratio laid down by the supreme court in kishore chand's case (supra) would apply to a case where one makes an extra judicial confession before a police officer in terms of section 25 of the evidence act or while one is under the police custody in terms of section 26 thereof. 7. there is nothing on record to indicate that the appellant had appeared before the e.o. in pursuance of the said summons after the office hours. on the other hand, as the appellant appeared before the e.o. in pursuance of the summons issued to him, the appellant will be deemed to have appeared before the e.o. during office hours unless contrary is established. when the statements of the appellant dated 17-7-1989, 24-7-1989 and 14-5-1990 are read together, it would appear that there is nothing in any of the statements amounting to exculpatory matter which, if proved, would negative the contravention confessed. even otherwise, it is now well settled [vide bhagwan singh rana's case (supra)] that it is permissible to believe one part of the confessional statement and to disbelieve another if there is other evidence to prove the correctness of inculpatory part thereof. 8. the appellant has admitted that he was occupying seat no. 53-j in the said flight ai-742. however, the contention of the appellant is that while the two rings and the ball pen belongs to the appellant, the three pieces of gold recovered from beneath that seat did not belong to him (vide para 2 of the memorandum of appeal). as the gold was recovered from beneath the seat occupied by the appellant, the plea that the said pieces of gold did not belong to the appellant does not seem to be believable. 9. the confessional statement dated 17-7-1989 was retracted by the appellant vide the bail application submitted in the concerned court next day, i.e., 18-7-1989 through his counsel, in which it was stated that the statement was obtained under force, and coercion. it may be stated that a confession cannot be regarded to be involuntary or untrue merely because it is retracted either at the first available opportunity or thereafter if it otherwise appears to be voluntary and true. if a retracted statement is proved to be voluntary and true, it can be acted upon as was held by the supreme court in kishore chand's case (supra). 10. the appellant has confessed in his statement dated 17-7-1989 that he borrowed uae dhirams 400 from his uncle, sh. sultan khan of dubai which he had spent while he was in dubai and that the gold seized from him as also from beneath his seat no. 53-j was purchased by him with the foreign exchange equivalent to rs. 53,000 borrowed from sh. irfan khan of dubai. the above statement of the appellant receives corroboration from the panchnama/seizure memo dated 17-7-1989 whereby 225 gms of gold in the form of button shaped pieces, rings and ball pen was seized. the panchnama and the seizure memo were signed by the independent witnesses, sh. b.s. madan, jsa, air india security and sh. k.s. mehta, security guard, air india. further, the fact that the appellant was occupying the seat no. j-53 in the air india flight no. ai-742 is not in dispute. it is also not in dispute that the appellant was travelling from dubai to bombay via delhi on 17-7-1989 by the said flight. it is also not in dispute that the appellant was going to bombay, whereas he belongs to muradabad. the explanation given by the appellant in this regard in his subsequent statement dated 24-7-1989 is not convincing. that apart, the fact that the two gold rings and one gold ball pen were recovered from the appellant's person is not disputed. the recovery of three gold pieces from beneath the appellant's seat is also not in dispute. what the appellant disputes is that the gold recovered from beneath his seat no. 53-j did not belong to him. the very fact that the seized gold was found under the appellant's seat would render the appellant's denial unacceptable in the absence of any convincing evidence indicating the contrary. to take a view other than the above on the basis of mere conjectures/assumptions/ presumption such as "the gold might be belonging to another passenger who was earlier occupying the said seat, etc., would be legally unsustain able. it appears to me that the above circumstantial evidence also goes to lend corroborative support to the appellant's statement dated 17-7-1989. the retraction of the appellant vide his bail application filed in the court through his counsel appears to be afterthought. 11. the principle laid down by the supreme court in the hindustan steel ltd.'s case (supra) applies where one has acted under a bona fide mistaken impression/belief. such is not the case here. 12. a perusal of the adjudication order reveals that the appellant was afforded opportunity of personal hearing. hence, the question of breach of the principle of natural justice does not arise. further, as the air hostess's statement was not recorded and relied upon by the prosecuting agency, the question of affording opportunity to the appellant to examine/cross-examine her would not arise. the burden to prove a defence plea lies on the person taking such a plea. 13. the material on record does not indicate that the confessional statement of the appellant dated 17-7-1989 was not voluntary. that statement appears to be voluntary as also true. 14. keeping in view the above discussion and after carefully considering the material on record and the submissions advanced on behalf of the parties, it appears to me that the findings arrived at by the adjudicating officer are correct. the contravention of section 8(1) is established against the appellant. 15. coming to the question of quantum of penalty imposed on the appellant, it may be stated that according to the appellant he had spent uae dhirams 400 abroad itself. as regards the foreign exchange, equivalent to rs. 53,000, borrowed by the appellant from shri irfan khan of dubai, the appellant had stated that he had utilised the same in purchasing the seized gold. it, therefore, follows that government had, in fact, got the foreign exchange equivalent to rs. 53,000 recovered in the form of gold seized from the appellant. however, as the appellant had spent uae dhirams 400 in dubai itself, there is a direct loss of foreign exchange to the government to that extent. keeping the above position in view, it appears to me that the penalty of rs. 44,000 imposed on the appellant is highly excessive. it would meet the ends of justice if a penalty of rs. 8,500 (eight thousand five hundred only) is imposed on the appellant. 16. in view of the above, i reduce the penalty to rs. 8,500 as against rs. 44,000. the adjudication order is modified to that extent. 17. in the result, the appeal is dismissed, subject to the reduction of the penalty to rs. 8,500.
Judgment:

1. This appeal arises against the adjudication order No. ADJ/68/90/ 9594 dated 26-9-1990 whereby a penalty of Rs. 44,000 was imposed on the appellant for violation of the provisions of section 8(1) of the Foreign Exchange Regulation Act, 1973 ('the Act').

2. Briefly stated, the facts are that the appellant was travelling in Air India Flight No. A-I 742 from Dubai to Bombay on 17-7-1989. Pursuant to an information that certain persons travelling from Dubai to Bombay via Delhi in the said flight were carrying foreign exchange/documents in violation of the provisions of the Act, the passengers were checked at Delhi airport. As a result of the search of the person and baggage of the appellant, Shri Aftab Alam and the seat No. 53-J occupied by him, three gold button shaped pieces lying beneath the seat No. 53-J, one gold ball pen and two gold rings and some documents were recovered from the appellant and seized. The quantity of the seized gold was 225 gms. The appellant disclosed in his statement dated 17-7-1989 that he borrowed from his uncle, Shri Sultan Khan, UAE Dhirams 400 which he spent while he was in Dubai and that he borrowed foreign exchange equivalent to Rs. 53,000 from Shri Irfan Khan with which he purchased the gold. As the above facts disclosed contravention of section 8(1) of the Act, a show-cause notice (Memo No. T4/24/A/UP/1990/8272-1973 dated 17-5-1990) was issued to the appellant, alleging that the appellant, a person resident In India other than an authorised dealer in foreign exchange, without the previous general or special permission from the RBI, acquired/borrowed foreign exchange to wit. UAE Dhirams 400 and foreign exchange equivalent to Rs. 53,000 for purchasing foreign gold and other goods and thereby contravened section 8(1). As the explanation of the appellant was not found satisfactory, adjudication proceedings were drawn against him. The Adjudicating Officer found the appellant guilty of having contravened the provisions of section 8(1) and imposed the penalty mentioned above.

3. I have heard the counsel of the parties and have perused records of the case.

4. The counsel for the appellant submits that while the rings and the ball pen belongs to the appellant, the three button shaped pieces of gold recovered from beneath the seat did not belong to the appellant, that the appellant neither borrowed 400 Dhirams from his brother nor borrowed the foreign exchange equivalent to Rs. 53,000 from Shri Irfan Khan of Dubai, that the confessional statement dated 17-7-1989 was obtained under threat and that the said statement was neither voluntary nor true. The counsel for the appellant further submits that the confessional statement was recorded after the appellant was arrested and that a statement obtained during arrest cannot be said to be voluntary. It was also contended on behalf of the appellant that the appellant's statement dated 17-7-1989 has to be read as a whole as also along with his subsequent statements dated 24-7-1989 and 14-5-1990. The counsel for the appellant also submits that the confessional statement dated 17-7-1989 was retracted by the appellant at the earliest opportunity and it is not legally permissible to rely on a retracted statement unless it is corroborated. The counsel further contends that the entire case is based on a concocted story and that the Adjudicating Officer had not considered the fact that another passenger was occupying the seat No. J-53 when the appellant boarded the aeroplane at Dubai and the appellant was not even given opportunity to examine the Air Hostess who on the request of the appellant, asked the another passenger to vacate the seat No. 53-J. The counsel placed reliance on P. Mansoor Mohd. Ali Jinnah v. Dy. Director [1989] 42 Taxman 126 (Mad.) (Corp. Mag.), Kishore Chand v. State of Himachal Pradesh AIR 1990 SC 2140, Palvinder Kaur v. State of Punjab 1953 SCR 94, Hanumant Govind Nargundkar v. State of MP AIR 1952 SC 343, Bhagwan Singh Rana v. State of Haryana AIR 1976 SC 1797, Roshan Beevi v. Joint Secretary to the Government of Tamil Nadu [1984] 15 ELT 289 (Mad.)(FB), Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR26 (SC) and Shri Krishnadas Tikara v. State of M.P. AIR 1977 SC 1691.

5. The counsel appearing for the respondent submits that all the statements of the appellant are to be read together in order to ascertain the truth and that when so read together clearly indicate that the confessional statement of the appellant would undoubtedly appear to be voluntary.

6. In Roshan Beevi's case (supra), the Full Bench of the Madras High Court has held that a person summoned under section 107 or section 108 of the Customs Act can neither be said to be under the custody of the Custom officials nor can be deemed to have been arrested. In view thereof, since the appellant had appeared before the E.O. for giving the statement dated 17-7-1989 in pursuance of the summons issued to him, the appellant cannot be deemed to be under arrest. As such, mere appearance will not amount to taking a person into custody. Further, it may be stated that as the Enforcement Officers are not "police officers" within the meaning of sections 25 and 26 of the Evidence Act, a confessional statement made before an Enforcement Officer will not become inadmissible in evidence merely because it is made before him. The ratio laid down by the Supreme Court in Kishore Chand's case (supra) would apply to a case where one makes an extra judicial confession before a police officer in terms of section 25 of the Evidence Act or while one is under the police custody in terms of section 26 thereof.

7. There is nothing on record to indicate that the appellant had appeared before the E.O. in pursuance of the said summons after the office hours. On the other hand, as the appellant appeared before the E.O. in pursuance of the summons issued to him, the appellant will be deemed to have appeared before the E.O. during office hours unless contrary is established. When the statements of the appellant dated 17-7-1989, 24-7-1989 and 14-5-1990 are read together, it would appear that there is nothing in any of the statements amounting to exculpatory matter which, if proved, would negative the contravention confessed. Even otherwise, it is now well settled [vide Bhagwan Singh Rana's case (supra)] that it is permissible to believe one part of the confessional statement and to disbelieve another if there is other evidence to prove the correctness of inculpatory part thereof.

8. The appellant has admitted that he was occupying seat No. 53-J in the said flight AI-742. However, the contention of the appellant is that while the two rings and the ball pen belongs to the appellant, the three pieces of gold recovered from beneath that seat did not belong to him (vide para 2 of the memorandum of appeal). As the gold was recovered from beneath the seat occupied by the appellant, the plea that the said pieces of gold did not belong to the appellant does not seem to be believable.

9. The confessional statement dated 17-7-1989 was retracted by the appellant vide the bail application submitted in the concerned Court next day, i.e., 18-7-1989 through his counsel, in which it was stated that the statement was obtained under force, and coercion. It may be stated that a confession cannot be regarded to be involuntary or untrue merely because it is retracted either at the first available opportunity or thereafter if it otherwise appears to be voluntary and true. If a retracted statement is proved to be voluntary and true, it can be acted upon as was held by the Supreme Court in Kishore Chand's case (supra).

10. The appellant has confessed in his statement dated 17-7-1989 that he borrowed UAE Dhirams 400 from his uncle, Sh. Sultan Khan of Dubai which he had spent while he was in Dubai and that the gold seized from him as also from beneath his seat No. 53-J was purchased by him with the foreign exchange equivalent to Rs. 53,000 borrowed from Sh. Irfan Khan of Dubai. The above statement of the appellant receives corroboration from the panchnama/seizure memo dated 17-7-1989 whereby 225 gms of gold in the form of button shaped pieces, rings and ball pen was seized. The panchnama and the seizure memo were signed by the independent witnesses, Sh. B.S. Madan, JSA, Air India Security and Sh. K.S. Mehta, Security Guard, Air India. Further, the fact that the appellant was occupying the seat No. J-53 in the Air India Flight No. AI-742 is not in dispute. It is also not in dispute that the appellant was travelling from Dubai to Bombay via Delhi on 17-7-1989 by the said flight. It is also not in dispute that the appellant was going to Bombay, whereas he belongs to Muradabad. The explanation given by the appellant in this regard in his subsequent statement dated 24-7-1989 is not convincing. That apart, the fact that the two gold rings and one gold ball pen were recovered from the appellant's person is not disputed. The recovery of three gold pieces from beneath the appellant's seat is also not in dispute. What the appellant disputes is that the gold recovered from beneath his seat No. 53-J did not belong to him. The very fact that the seized gold was found under the appellant's seat would render the appellant's denial unacceptable in the absence of any convincing evidence indicating the contrary. To take a view other than the above on the basis of mere conjectures/assumptions/ presumption such as "the gold might be belonging to another passenger who was earlier occupying the said seat, etc., would be legally unsustain able. It appears to me that the above circumstantial evidence also goes to lend corroborative support to the appellant's statement dated 17-7-1989. The retraction of the appellant vide his bail application filed in the Court through his counsel appears to be afterthought.

11. The principle laid down by the Supreme Court in the Hindustan Steel Ltd.'s case (supra) applies where one has acted under a bona fide mistaken impression/belief. Such is not the case here.

12. A perusal of the adjudication order reveals that the appellant was afforded opportunity of personal hearing. Hence, the question of breach of the principle of natural justice does not arise. Further, as the Air Hostess's statement was not recorded and relied upon by the prosecuting agency, the question of affording opportunity to the appellant to examine/cross-examine her would not arise. The burden to prove a defence plea lies on the person taking such a plea.

13. The material on record does not indicate that the confessional statement of the appellant dated 17-7-1989 was not voluntary. That statement appears to be voluntary as also true.

14. Keeping in view the above discussion and after carefully considering the material on record and the submissions advanced on behalf of the parties, it appears to me that the findings arrived at by the Adjudicating Officer are correct. The contravention of section 8(1) is established against the appellant.

15. Coming to the question of quantum of penalty imposed on the appellant, it may be stated that according to the appellant he had spent UAE Dhirams 400 abroad itself. As regards the foreign exchange, equivalent to Rs. 53,000, borrowed by the appellant from Shri Irfan Khan of Dubai, the appellant had stated that he had utilised the same in purchasing the seized gold. It, therefore, follows that Government had, in fact, got the foreign exchange equivalent to Rs. 53,000 recovered in the form of gold seized from the appellant. However, as the appellant had spent UAE Dhirams 400 in Dubai itself, there is a direct loss of foreign exchange to the Government to that extent. Keeping the above position in view, it appears to me that the penalty of Rs. 44,000 imposed on the appellant is highly excessive. It would meet the ends of justice if a penalty of Rs. 8,500 (Eight Thousand Five Hundred only) is imposed on the appellant.

16. In view of the above, I reduce the penalty to Rs. 8,500 as against Rs. 44,000. The adjudication order is modified to that extent.

17. In the result, the appeal is dismissed, subject to the reduction of the penalty to Rs. 8,500.