| SooperKanoon Citation | sooperkanoon.com/20262 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai |
| Decided On | Jan-04-2001 |
| Judge | J S Murthy |
| Reported in | (2001)(75)ECC109 |
| Appellant | Shri Vinod Mohanlal Dhakan |
| Respondent | Commissioner of Customs (Prev.) |
1. The facts in brief are that in pursuance of an information officers of Marine and Preventive wing of Customs (Preventive) Collectorate, Bombay searched the premises of Room No. 20, Building No. 51, C.R Chawl, Shyam Seth Street, Zaveri Bazar, Bombay on 1.7.91, and recovered 5 gold strips in folded condition, from the shelf of premises Vinod M.Dhakan its Proprietor admitted that gold strips were made out of foreign marked gold biscuits on a Tarpatta Machine, installed in his premises. He could not produce any documents or explain the licit acquisition or possession of the same. 5 gold strips valued at Rs. 2,05,000 were seized in reasonable belief that they were manufactured out of smuggled gold and are liable to confiscation under the Customs Act provisions. Statement under Section 108 of Customs Act of proprietor and his employee Alkesh Soni was recorded. 5 gold strips seized were sent to Mint Govt.- of India for assay, and purity was found to be 983.9, 983.0, 983.4 and 985.4.
2. Import of gold of foreign origin into India without valid permit, violates Section 13(1) of FERA 1975 read with Section 11 of the Customs Act. Under Section 123 of Customs Act, burden to prove that the gold is not smuggled lies upon Vinod M. Dhakan as 5 gold strips were recovered from his possession and it was not discharged by him or anyone. Show cause notice dated 27.12.91 was issued (to) him or any other person claiming ownership of gold under seizure requiring them to show cause as to why seized 5 gold strips should not be confiscated under Section 111(d) of the Customs Act and why penalty under Section 112 of Customs Act should not be imposed on them. Appellant Vinod M. Dhaken filed his reply on 11.1.92 and 12.2.92 through counsel, and cross-examined seizing officer and officer who recorded his say. His employee was also issued the above notice. He too replied it on 16.1.92 and 16.4.92.
Personal hearings were held on 16.8.92, 16.9.92, 19.10.92, 25.11.92, 14.12.92 & 19.1.93. On 30.3.93 counsel appeared before Additional Commissioner of Customs (Preventive), Bombay. Adjudicating authority was changed. Corrigendum notice was issued on 9.7.93 and noticees were informed. Personal hearings were held on 6.8.93,26.10.93,30.11.93.
Appellant made final submissions on 9.12.93 and 10.12.93 through counsel before Deputy Collector of Customs. Alkesh M. Soni also submitted through his counsel letter dated 18-12/20.12.93. He is not the owner of gold and he has no evidence and no penalty to be imposed.
On perusal of all the material available on record, Order-in-Original was passed on 13.5.94 confiscating the seized gold strips and imposed penalty of Rs. 20,000 on appellant under Section 112(b)(i) of the Customs Act. Proceedings were dropped against employee Alkesh M. Soni.
The appellant's appeal against that order to Commissioner of Customs (Appeals) Bombay was dismissed after hearing him under the Impugned order. Hence this appeal.
3. In support of the appeal, Shri Arun Mehta, learned Counsel for appellant has argued that there were no marking on seized gold strips.
Appellant has retracted his statement within a day before Magistrate, when produced. Statement was recorded in custody after 6.10 p.m.
Statement of employee Alkesh is not before Gazetted Officer under his signature. It is not written and recorded by him. No incriminating material was found when the residence of both are searched. There was no reasonable belief at the time of seizure of 5 gold strips. It is made out of smuggled gold is not established by the department. Assay report shows purity is of 983 only. Appellant has not written his statement nor it is in his mother tongue. There is no investigation regarding the giving of gold by two Marvadis from Zaveri Bazar.
Employee's endorsement is adjusted in between the space. Appellant has claimed the seized gold. Employee is ignorant from where it was brought. Panchas are not produced for cross-examination though specifically asked. Seizure is not to be believed. Panchanama is not drawn in the spot, but seizure is in office. Orders relied in Para 12 by Deputy Collector is under old act, different from latest case law and provision. Weight of gold seized is equal weight of gold biscuits is only a presumption. No basis for it. Case against employee is dropped, as there is no proper statement recorded from him. Abetment is ruled out. Appellant's claim not sustantiated is not sufficient to rely on retracted statement. Impugned Order is only based on presumptions and repetition of Order-in-Original. There is no independent corroboration and no independant finding. Order is not a speaking one.
Only yellow metal seized as per Panchanama, which is not proved to be smuggled gold. Superintendent admits in cross-examination that seizure is in the office. Retraction statement has its own value, when it is immediate before the Magistrate. Late night statements recorded are not valuntary. In support of the above 1983 ELT 1775 (SC) (Paras 57, 58), 1997 (58) ELT 283 (Para 14), (Paras 7 to 9), Sri T.D. Bodade, the learned JDR for the department has argued that there is a clear admission of appellant in his statement under Section 108 of Customs Act, which is a substantial evidence. Tarpatta machine was in his shop for conversion of foreign marked smuggled gold to strips. Marks wiped out in the process. Seized strips were concealed.
Appellant has not stated at any time that it was made out Df his family gold. Appellant has disclosed its source, as to from whom purchased. It is for the appellant to prove as not a smuggled gold product under Section 123 of the Customs Act, which he has failed. Evidence of employee supports department's case. Ownership of seized gold is denied by employee. It was found in appellant's shop. Confiscation and penalty is proper. In support of it of Supreme Court in Naresh J. Sukhawani's case is cited. In the reply it is urged in view of immediate retraction above case law is not applicable.
4. Perused the show cause notice, reply, Panchanama, Statements recorded and their English Translation, Orders of Lower Authorites, Appeal Memorandum, Written submissions of appellant and Retraction letter of appellant. Also perused Sections 123 and 111(d) and 112 of the Customs Act. The contentions of both sides both in written submissions and oral arguments are taken off. Case laws cited by both sides are also considered, which are quite familiar with established principles of law. Also perused the cross-examination of officers, pointed out by appellant. They are discussed in the below jaras.
5. Panchanama is in English. Statements are in native language as per the seizure Panchanama, it is drawn in the workship of appellant, where 5 strips of yellow metal said to be gold was kept in a packet in the open shelt on the wall, larpatta machine was also found. This is a primary evidence. Recovery of the above goods are clearly admitted by both the appellant and his employee. The appellant has claimed it as prepared out of HUF gold, which is not supported by any document or corroborative oral evidence. Panchanama is an official act in the discharge of duties by a public servant. It is presumed to be done in regular manner. In view of this, now examination of Panchas is not relevant and material. As per the show cause notice, orders of lower Authorities, the assay of 5 strips of yellow metal on test by mint of Govt. of India, is not 999, but varies to large extent from 983.9, 983.0, 983.4, 984.4 & 985.4. Even the Impugned order states that is almost equal to foreign gold, which is not correct as evident from the above material. Apart from that, as pointed out by the appellant in the written submission, before seizure, customs officers have got it examined by a private gold smith. This shows they had a doubt. As per the statements and other available material on record such as Panchanama, there is no positive evidence or admission that strips were manufactured out of smuggled foreign gold. No investigation is persued in that line, even though appellant has pointed out the source with address from where he got them. In the absence of it, there is no concrete material that strips were the product of foreign smuggled gold. Evidently, no markings on the strips exists. They are kept in open shelf in the workshop of appellant which was also known to the employee. So all these facts support the appellant, than the departmental allegations based on assumptions.
6. Now coming to the statements of appellant and his employee, as per show cause notice and Order-in-Original, appellant has stated "he used to purchase foreign marked gold biscuits from business men, that he used to convert them into strips on tarpatta machine installed in his workshop. He mainly purchases from Mohan Marvadi and Hasmukh Marwadi, who have got their Bakadas in front of Mumbadevi Mandir. He used to receive one-two deliveries of foreign marked gold biscuits in a month.
Five strips made from foreign marked gold biscuits recovered during the course of search from the shelf were concealed. He admitted his guilt.
He prays for leninent view". Alkesh Mahendrabhai Soni, his employee in his statement has stated that "Vinod Mohanlal Dhakan used to purchase foreign marked gold biscuits and convert the same to strips with the help of Tarpatta machine installed in the workshop. 5 strips of gold recovered from Room No. 20,51 Shyam Sheth Street, Zaveri Bazar, Bombay-2, were manufactured out of foreign marked gold biscuits, the same were concealed in the shelf of the said workshop. He had no knowledge about the purchase of foreign mark (marked) gold biscuits as these aspects are independently dealt with by Vinod Mohanlal Dhakan. He has nothing to do with the sale and purchase of foreign marked gold biscuits. He is a servant, serving for the last 5 years in the workshop of appellant". As contended by appellant, these are the only material available in support of the case, as admitted in the cross-examination by the customs officer Kale, pointed out in para 12 of written brief.
JDR has not pointed out any other material. So, from the above admissions, even if accepted, the smuggled nature of foreign1 mark (marked) gold biscuits cannot be established. When appellant was getting one or two times in a month, from the above-named two persons, having Bakdas in front of Mumbadevi temple, the foreign marked gold biscuits, it cannot be a smuggled one. It is not established by any investigation in that line. Presumption under Section 123 of the Customs Act does not apply, when 5 strips of yellow metal with substandard fineness was in possession of appellant. Ignoring the retraction letter of the appellant, and that statements are involuntary and true, the above material do not make out a probable case. The contention of appellant, has to be and is accepted.
7. The appellant has claimed the seized 5 strips, as a Hindu Undivided Family property, of course without any supporting material. His possession is alleged. It is not proved to be a prohibited goods. So the seized goods has to be returned to him only. Hence I pass the following order.
For the reasons discussed above, the Impugned Order is set aside, and the appeal is allowed with consequental relief, if according to law.