K.S. Deshmukh Vs. State of Maharashtra - Court Judgment

Excerpt:
excise - evasion of duty - sections 3, 4, 4 (2) and 9 (1) of central excise act, 1944 and rules 9, 152, 153 and 156 of central excise rules, 1944, sections 420 and 471 of indian penal code, 1860 and sections 5 (1) (d) and 5 (2) of prevention of corruption act - accused allegedly cheated revenue by evading payment of excise duty - accused was found guilty under section 420 and 471and sections 5 (1) (d) and 5 (2) read with sections 9 (1) (d) and 9 (1) (c) and sentenced to suffer imprisonment - accused not expected to keep watch and ward over two godowns where consignees were stacking their goods - accused only expected to check consignment and papers sent along with driver - conviction order and sentence passed by lower court set aside. - - thereupon investigation was taken up and the investigating agency being satisfied that all the documents and registers are in order, directed their attention to other aspects of the case. it was found that 136 bags of tobacco were stacked in swati godown while the neelanagar godown did not have any goods though it emitted a strong smell of tobacco and some leaves of tobacco were strewn on the floor. nor was anyone the gainer by fabricating the plan of neelanagar godown because admittedly neelanagar godown which was taken on 23rd of march 1974 was required at best for storage of only four consignments nos. that brings us to the next lot of 5 consignments which arrived simultaneously on 22-2-1974. a month elapsed between the arrival of these goods and the last four consignments of 23-3-1974. surely, a man of business would not like to block up his capital for months together and it is most likely that the consignee ibrahim had made plans of disposal of the goods in a phased manner according as they arrive from lalgidi. that explains why there was a strong smell of tobacco in the neelanagar godown and even some leaves were found in a room. there was a strong tobacco smell in neelanagar godown and some leaves were found on the floor. the finding that the neelanagar premises emitted a strong odour of tobacco pointing out that it was used for stacking the goods in recent times and that the fact that some tobacco was found lying on the floor of that godown are all sufficient to dismantle the theory that none of the consignments had actually reached solapur. it could as well have happened that accused 4 on his own disposed of the tobacco in a clandestine manner for which he has been duly convicted.1. section 3 of the central excises and salt act, 1944 is the charging section under which duties of excise are levied and collected on all excisable goods at rates set-forth in the first schedule. item 4 of the first schedule includes tobacco in any form whether cured or uncured manufactured or not, and includes the leaf, stalks and stems of the tobacco plant and various rates of duties are set forth in the second column of the schedule. section 4 of the act describes the manner in which the excisable goods are to be valued depending on the place of sale. sub-section (2) of section 4 takes care of the situation when excisable goods are sold at a place other than the place of removal. under the old rule 9 in force in 1978 no excisable goods could be removed from any place where they are produced cured or manufactured without payment or part payment of duties leviable thereon. however, under the extant rule 152 et seq goods can be removed from one warehouse to another subject to certain conditions. rule 153 requires the consignor or the consignee of the goods to enter into a bond in a sum equal atleast to the duty chargeable on such goods, for the due arrival and warehousing thereof at the warehouse destination. the consignor was required, under rule 156 to produce a certificate in the proper form giving details of the central excise licences held by the consignee, to ensure that the goods are being dispatched to a person whose business having licensed can easily be checked and monitored.2. the present appeal deals with the manner in which 14 consignments of tobacco were removed from lalgidi in tamilnadu allegedly for re-warehousing at solapur in maharashtra between 18-1-1974 to 23-3-1974 and the role of one k. s. deshmukh, an inspector of central excise in that matter. accused no. 1 k. s. deshmukh, accused no. 2 s. l. deshpande, accused no. 3 r. a. manoki, all inspectors out of whom the last two have since been acquitted and accused no. 4 mohammed ibrahim the consignor, since convicted, are alleged to have entered into criminal conspiracy to cheat the revenue by evading payment of excise duty on the pretense of removing the goods from lalgidi to solapur and were arraigned before the special judge, greater bombay, to face the charges under section 120b read with section 420 and 471 of the indian penal code; sections 5(1)(d) and 5(2) of the prevention of corruption act also read with section 9(1)(b), read with section 9(1)(d) and 9(1)(c) and 9(1)(d) of the central excises and salt act, 1944. as adumbrated above, accused no. 2 and accused no. 3 were acquitted. accused no. 4 though convicted has not preferred any appeal and the appellant in this court accused no. 1 deshmukh has been found guilty under the aforesaid sections except section 468 of the indian penal code and sentenced to suffer two years' r.i. and to pay fine of rs. 500/- or in default, to suffer three months' further r.i. on each of the above counts, giving rise to the present appeal.3. in all 14 consignments left lalgidi for solapur and these consignments may be divided into three groups, the first being of the first five consignments. the first consignment was under d.p. 2 no. 597863, dated 11-1-1974 which left lalgidi at 6.00 p.m. on 18-1-1974 and reached solapur four days thereafter on 22-1-1974 in the morning. according to the prosecution, the consignments consisted of 144 bags out of which 136 bags actually arrived in solapur and were found in swati bungalow godown taken on hire by accused 4 ibrahim. (the defence version about these 136 bags is different to which i shall advert later on). remaining four consignments left lalgidi on 20-1-1974 and arrived in solapur on 25-1-1974. these four consignments were checked by accused 2 s.l. deshpande because the appellant k. s. deshmukh was on leave from the month of january 1974. as accused 2 deshpande has been acquitted and the appeal preferred by the state against his acquittal has not been admitted, we will have to presume for the purposes of this appeal that consignments no. 1 to 5 did actually arrive atleast outside the octroi naka of solapur municipal corporation.4. that brings us to the second set of consignments nos. 6 to 10. all these consignments left lalgidi along with the earlier ones on 20th january 1974 and arrived at the same i.e. at 10 a.m. on 27-2-1974. these consignments were stacked, according to the appellant, in swati premises godown and entries to that effect were made by accused 1 deshmukh in this register.5. the third group consists of consignments 11 to 14 which left lalgidi on 27-2-1974, 15-3-1974, 17-3-1974 and 18-3-1974 and arrived in solapur on 23-3-1974. thus four consignments could have been stored either in swati godown or in newly rented godown at neelanagar.6. it is the case of the prosecution that except consignment no. 1 none of the other 13 consignments ever reached solapur and accused 1 deshmukh has fabricated documents to evidence their arrival with a view to confer under pecuniary advantage on the consignor.7. in order to facilitate the movement of goods and encourage trade and commerce, the excise department permits the seller of goods to transport the same to a distant place for delivery only after ensuring that adequate bond has been taken from the consignor regarding duty involved. in the present case, ibrahim was the consignor and consignee for the consignments 1 to 9 while for the remaining 5 consignments the consignor was different but ibrahim continued to remain the consignee, and also executed the bonds accordingly.8. on 18-4-1974 superintendent rajgopalan of the central excise, preventive group, tiruchi, wrote to his counterpart at solapur communicating to him that several huge consignments of tobacco have been cleared under a.r. 3 to a warehouse at solapur and requested the solapur superintendent to thoroughly probe into the matter. thereupon investigation was taken up and the investigating agency being satisfied that all the documents and registers are in order, directed their attention to other aspects of the case. in the first place, they visited swati premises godown and neelanagar godown to find out whether any of these consignments were received. it was found that 136 bags of tobacco were stacked in swati godown while the neelanagar godown did not have any goods though it emitted a strong smell of tobacco and some leaves of tobacco were strewn on the floor. next step was to check the records of the octroi nakas to verify the entry of tobacco trucks in the city. superintendent shahapaukar visited the office of the solapur municipal corporation on 5-7-1974 and 6-7-1974 and issued a summons letter to the octroi superintendent to produce the relevant records. he discovered that only one tobacco consignment was received on 20-1-1974 containing 144 bags weighing 8714 kg. for which octroi of rs. 523.20p. was paid.9. on 22-5-1974, one inspector s. s. kale accompanied by borade, wale and madane all inspectors, visited the record section of the corporation and verified and checked the octroi receipts books of bijapur naka, poona naka, hyderabad naka and akkalkot naka to find only one receipt of octroi for 144 bags. solapur municipality has in all 14 nakas permitting ingress and egress. realising that the team led by kale has not checked all the 14 octroi nakas, bapu kulkarni (p.w. 13) who had worked as superintendent of octroi at solapur, was asked to do further research at the request of mr. pujari the assistant collector of central excise. bapu kulkarni being a superintendent, asked his record-keeper pardesi to check the entire record and submit a report. pardesi in his investigation reported that none of these goods have been received from pune or bijapur nakas. that explains why bapu kulkarni was asked to do further research and produced one receipt only showing the entry of one consignment.10. it is the common ground that solapur can be approached from 14 nakas but generally goods coming from the southern side come through bijapur or puna naka. the witnesses have admitted that it is possible for a truck driver to take a circuitous route and enter solapur by any one of the other naka. what is more, if the truck driver is a more adventurous one he may evade octroi altogether by taking a kacha route lending to the medical college.11. this type of negative evidence led by the prosecution to prove that none of these trucks except the first one have actually arrive in the municipal limits of solapur has been criticised up-hill and down-dale by mr. gumaste, the learned counsel appearing for the accused deshmukh. it was submitted by him that the primary evidence about the entries of the truck in the town is contained in the registers themselves and the evidence of someone else who purports to have gone through the register and prepared a report is nothing but a hearsay one. as happens in hearsay report, there is a contradiction regarding entries in the octroi registers. whereas the initial search could not bear out any single entry, one entry was discovered showing the receipt of 144 bags of tobacco by a sustained research. had the prosecution made available the entire record of the corporation, - continues counsel - one could have expected the accused to go through the same and fish out entries corresponding to the arrivals of 13 trucks but that was not done.12. mrs. keluskar, learned public prosecutor appearing for the state, defending the judgment, points out the utter impossibility of producing the entire record of 14 nakas in court and asks as to why the accused did not make an application for inspection of such a record. in the absence of such an application, urges counsel, the evidence of bapu kale who has gone through the record should be believed.13. i am afraid, this approach would be contrary to the established principles of criminal jurisprudence because even though the non-entry of the 13 trucks is a negative fact, proving of such a negative fact, if it is being sought to be proved by the examination of the registers, makes it obligatory for the prosecution to produce the primary evidence before the court. that having been not done, the accused has lost an opportunity of knowing what entries the registers contained and the manner in which kale and other inspectors has scanned the records. had the officers of the octroi department of the corporation entered the box, the accused could have cross-examined them regarding the manner in which trucks are permitted to enter solapur municipal corporation limit and the virtual impracticability of proving the negative event.14. next, it was urged by mrs. keluskar that the accused in his overture to fabricate evidence regarding availability of storage space, has produced a document regarding the ground plan of his branch warehouse at neelanagar belonging to one abdulpurkar. but the tell-tale landlord abdulpurkar denies having super scribed his signature on the plan for recording his no objection to storage of non-duty paid tobacco in his building. the ground plan has been prepared with certain amount of thoroughness and shows the dimensions of the hall, the adjoining godowns, the windows and accused 1 has signed the same after recording 'verified premises on 22-3-1974'. the next day i.e. on 22-3-1974 the superintendent dange has approved the premises. mrs. keluskar has urged at the bar that i may peruse the writing on the originals of exhibits 77, 78, 80, 81, 123 and 83 which are documents relating to grant of licence or renewal thereof. mrs. keluskar points out that in most of these documents there is a over-writing by which date 26-12-1973 has been changed to 27-12-1973. she also points out that there was an unholy haste on the part of the officers to grant renewal of the permit on the day the application was received and this haste, according to counsel, is a pointer towards the complicity of accused 1 with the consignor ibrahim.15. to my mind, the alleged over-writing of date is not an attempt to fabricate the documents because nothing would have been achieved by such an over-writing. the fact of the matter is that dange was on leave from 23rd to 26th december and as happens in official transactions, the date which was put by him erroneously was changed by him from 26th to 27th. nor was anyone the gainer by fabricating the plan of neelanagar godown because admittedly neelanagar godown which was taken on 23rd of march 1974 was required at best for storage of only four consignments nos. 11 to 14. there was no need to fabricate evidence regarding the arrival of these four consignments because these consignments were checked by accused 3 r. a. manoki. when the arrival of these four consignments on 23-3-1974 at the octroi naka of solapur corporation can no longer be re-agitated in this appeal in view of the principles of constructive re-judicial propounded by the supreme court in pritam singh v. state of punjab, : 1956crilj805 , the argument of the learned public prosecutor about the neelanagar godown does not avail her.16. the swati premises godown was in fact a bunglow and an attempt was made by the learned public prosecutor to canvas that the entire consignment of 1491 bags could not have been stacked in a bunglow having three rooms and kitchen. even according to the witness panch dastgir saheb sheikh (p.w. 12), who had taken the measurements of the rooms in swati bunglow. only 50 bags could be stored in the first room. the panch-who should know the capacity of godowns having worked in the bhikusa yamaha tobacco factory for 22 years-did not agree with the suggestions that 800 bags of tobacco could be kept in swati bunglow. on this basis, argues mrs. keluskar, the consignment of 1491 bags could never have been accommodated in swati bunglow and in the face of denial of abdulpurkar of having consented to let out the premises to ibrahim, the story of 13 consignments having reached solapur should be taken as a false one.17. a study of the calender of consignments shows that all the 13 did not arrive at the same time at solapur. about the first consignment, there is no dispute; nor can anyone doubt the arrival of the next four consignments which were checked by inspector deshpande who has since been acquitted. that brings us to the next lot of 5 consignments which arrived simultaneously on 22-2-1974. a month elapsed between the arrival of these goods and the last four consignments of 23-3-1974. surely, a man of business would not like to block up his capital for months together and it is most likely that the consignee ibrahim had made plans of disposal of the goods in a phased manner according as they arrive from lalgidi. that explains why there was a strong smell of tobacco in the neelanagar godown and even some leaves were found in a room.18. the prosecution having discovered evidence of arrival of one consignment in the octroi records, connected the 136 bags found in swati bunglow godown with that consignment. however, it is seen from the report of the quality and categorisation of the tobacco that those 136 bags could belong to and be a part of any one of the 14 consignments. that is so because, kashinath dattatraya sawant (p.w. 10), superintendent of central excise, who made a panchnama, admits that the only reason why he says that those bags are from the consignment of 144 bags is because the figure 144 is nearer to the figure 136 than 149 which represents another consignment. he also admitted that the description of the variety and quality of the tobacco given in t.p. 2. exhibit 49 and that mentioned in the panchanama are different. the superintendent sawant also found that 136 packages were not stored in one room but were in three different rooms and that accords with the requirements that the consignments from different transport permits are required to be stored separately. no doubt, sawant tried to recover lost ground by saying that storing separately does not mean storing in separate rooms and may be that separate stacks have to be put up for different consignments. but that left unanswered the question of difference in weighments. sawant, being a superintendent and a senior officer also sample-weighed certain bags and found that the weight did not tally with those in the weight list attached to the t.p. 2 purporting to be the transfer permit for consignment no. 1 for which there was no explanation.19. the situation that unfolds itself is that 136 bags were found stored in three different rooms in swati bunglow godown; the quality of the tobacco was different from the one mentioned in the papers pertaining to consignment no. 1 which, even according to the prosecution, has entered solapur octroi limits and that too after paying due octroi duties. there was a strong tobacco smell in neelanagar godown and some leaves were found on the floor. viewing all these circumstances together, it could not be said that the negative evidence led by the prosecution to show that the consignments, except the first one, were spirited en route to solapur deserves the credence given to it by the lower court. the learned judge of the lower court fully realised the position when he observed in paragraph 305 that the prosecution does not have positive evidence about the non-arrival of the tobacco consignment at solapur. similarly, in paragraph 241 of his judgment, he has taken stock of the situation by observing that the prosecution has not produced any eye witness servant from the godown itself or any watchman or any neighbouring shop-keeper to show that from his personal knowledge and his own presence on or near the premises he can say an oath that the tobacco never came to swati bungalow or neelanagar premises. as regards the first transaction of 144 bags of which 136 bags were recovered in the swati bungalow godown, the learned trial judge found fault (paragraph 251) with the prosecution when the prosecution admitted this to be a genuine transaction and observed : 'i think even here the prosecution has given more credit to the accused than what was due to them.' accordingly to the trial court, the prosecution has gone wrong in assuming that accused 4 under t.p. 2 brought to solapur some tobacco which he had allegedly declared in his ar 3 application exh. 48 at lalgidi. accordingly to the learned trial judge, 'the prosecution should have realised that accused no. 4 who is capable of all such maneuverings and interpolations in a masterly manner as can be seen in this case could easily bring any other quality of tobacco in the vehicle which was apparently allowed to be transported under ar 3 exh. 48 and t.p. 2 exh. 49.'20. i am afraid, the learned trial judge has approached the case almost with a bias about the guilt of the accused and gone to the extent of finding fault with the prosecution when they admitted that the first consignment was duly received in solapur and stacked in swati bungalow godown. had the quality of tobacco found in swati godown tallied with the one mentioned in the documents relating to the first consignment, matters would have been easier. but not only the quality of tobacco but also the manner of stacking in three different rooms in swati bunglow negatives the theory of a single consignment. the finding that the neelanagar premises emitted a strong odour of tobacco pointing out that it was used for stacking the goods in recent times and that the fact that some tobacco was found lying on the floor of that godown are all sufficient to dismantle the theory that none of the consignments had actually reached solapur.21. it is nobody's case that the accused was expected to keep watch and ward over the two godowns or other godowns where the various consignees were stacking their goods. all that was expected of him was to check the consignment and the papers sent along with the driver by the office of origin viz., lalgidi. it could as well have happened that accused 4 on his own disposed of the tobacco in a clandestine manner for which he has been duly convicted. to spell out the conspiracy between the consignee accused 4 and accused 1 deshmukh would require a stronger basis which is lacking. rather, even the attempt of the prosecution to prove that no such goods arrived from the nakas has been dismantled by the cross-examination of the witnesses which point out that there are 14 nakas through which a truck can enter solapur; that the record of all the 14 nakas was not made available to the accused for inspection and that accused 4 if he had to evade the excise duty could do so by taking his trucks through the medical college road. in these circumstances, i find that the trial court was wrong in finding accused no. 1 deshmukh guilty of the offences charged.22. the appeal therefore succeeds and setting aside the order of conviction and sentence passed by the lower court, it is ordered that the appellant k. s. deshmukh be set at liberty forthwith. bail bond to stand cancelled.23. at one stage, my learned predecessor masodkar j. by his order dated 25th february, 1985 has ordered issuance of notices to original accused no. 2 s. l. deshpande and original accused no. 3 r. a. manoki who were acquitted by the lower court. in consequence of this order, the state had filed appeals against their acquittal which were not admitted. the above notices therefore stand discharged.