Shri Harish P. Pherwani, Shri Vs. Commissioner of Customs (P) - Court Judgment

Excerpt:
1. heard both sides. in this case, the customs officials intercepted two of the appellants shri prakash jain and shri ashok pahuja travelling on the impugned scooter and recovered assorted foreign currency equivalent to rs. 14,26,267/- and us $ 10,000 equivalent to 3,90,000/-. subsequent search at the residence of shri haresh n.pherwani resulted in recovery of airlines ticket to singapore, visa and foreign currency equivalent to rs. 2,42,248/- and indian currency of rs. 1,49,000/-. shri madan jain, 4th appellant has been implicated in the statements recorded from shri haresh n. pherwani and shri prakash c. jain as recorded in the impugned order. the adjudicating commissioner has confiscated the foreign currency equivalent to rs. 20,58,615/-. he has also confiscated and indian currencies.....

Judgment:
1. Heard both sides. In this case, the customs officials intercepted two of the appellants Shri Prakash Jain and Shri Ashok Pahuja travelling on the impugned scooter and recovered assorted foreign currency equivalent to Rs. 14,26,267/- and US $ 10,000 equivalent to 3,90,000/-. Subsequent search at the residence of Shri Haresh N.Pherwani resulted in recovery of airlines ticket to Singapore, visa and foreign currency equivalent to Rs. 2,42,248/- and Indian currency of Rs. 1,49,000/-. Shri Madan Jain, 4th appellant has been implicated in the statements recorded from Shri Haresh N. Pherwani and Shri Prakash C. Jain as recorded in the impugned order. The adjudicating Commissioner has confiscated the foreign currency equivalent to Rs. 20,58,615/-. He has also confiscated and Indian currencies as sale proceeds of smuggled goods. The impugned scooter has also been confiscated and allowed redemption on payment of fine of Rs. 10,000/-.

In addition, the following penalties have been imposed on the appellants:(1) Shri Haresh Pherwani Rs. 5,00,000/- (Rupees Five lakhs only)(2) Shri Ashok T. Pahuja Rs. 1,00.000/- (Rupees One lakh only)(3) Shri Prakash C. Jain Rs. 2,00,000/- (Rupees Two lakhs only)(4) Shri Madan Jain Rs. 2,00,000/- (Rupees Two lakhs only) There is also a penalty on Shri Shravan Kumar Vaishnav @ Kailash, but he is not in appeal before us.

2. The department's case is based on recoveries made as well as the statements recorded from various persons including the appellants and the adjudicating Commissioner has given detailed reasons to reject the contention of the appellants that the statements were recorded under duress. He has also recorded in Para 15, 16 and 17 as follows: On perusal of the Statements it is seen that the statements were recorded under Section 108 of the Customs Act 1962 and the same were written by the noticees in their own handwriting and as per their voluntarily say.

The Hon'ble Supreme Court in the case of Naresh J. Sukhwani v. U.O.I. 1996 (62) ECR 366 SC has held that: It must be remembered that statements made before the customs official is not a statement recorded under Section 161 of the Cr.

P.C. 1963. Therefore, it is material piece of evidence collected by Customs official under Section 108 of the Customs Act 1962. That material incriminates the petitioner inculpating him in the contravention of the provisions of the Customs Act 1962.

The material can certainly be used to connect the petitioner in the contra vention.

Similar view has also been held in the case of Bhana Khalip Bai Patel in the case of Bipin Bhai A. Patel v. State of Gujarat reported in 1998 (101) ELT 254 (Guj). Justice M.F. Saldhana of Bombay High Court on 27/08/91 allowed the Department's Criminal Appeal No. 456 of 1991 (B.C. Rajak Asstt. Collector of Customs v. Apinos Victor and Ors.) reported in 1992 (58) page A-77 and held that: such retraction have become the order of the day and are found on the file of each and every customs case. Mere retraction alone is not going to effect the evidentiary value of the statements recorded under Section 108 unless it can be demonstrated that the statement is otherwise assailable.

3. As such, we find that the Adjudicating Commissioner has adequately dealt with the challenges to the statement and the retractions.

4. The learned D.R. has also cited the decision in the case of R.S.Verma v. Commissioner of Customs, Calcutta 2001 (137) E.L.T. 652 (Tri.-Kolkata) under which it was held that the statements containing personal knowledge of deponent do not lose their evidentiary value even though the same are retracted in a mechanical manner. He also states that the decision in the case of Satish Kumar v. Commissioner of Customs, New Delhi which held that evidenciary value of detailed voluntary statement which is otherwise corroborated is not detracted by retraction thereof.

5. As regards the confiscation of the Indian currency, the learned advocate for Shri Haresh Pherwani cites the following two case laws: 1) S. Kotteswaran v. Collector of Central Excise (Customs), Madras 2) Sajjan Kumar Poddar v. Collector of Customs (Prev.) He also states that the appellant has filed income tax return for the Indian currency and hence the same is accounted for. In the aforecited decision of the Tribunal, it has been held that the burden is on the department to prove that the seized Indian currency represents sale proceeds of smuggled goods. We find in this regard that Shri Pherwani has admitted that he has made 25 strips to Singapore and that from his statements as well as statements of others connected with this case, it is seen that he has been selling smuggled gold and other smuggled items such as computer parts and peripherals etc. for which he has been receiving foreign currency as well as Indian currency. As such we are of the view that the adjudicating Commissioner has rightly confiscated foreign currency as well as Indian currency.

6. The learned advocate for Shri Madan Jain states that Shri Jain's statement is exculpatory and that the adjudicating Commissioner has not given any finding against him. We, however, find that the statement given by Shri Prakash Jain, brother of Shri Madan Jain establishes that foreign currency worth US $ 10000 was given by Shri Madan Jain which was recovered from Shri Prakash Jain.

7. The learned advocate for Shri Prakash Jain and Shri Ashok Pahuja states that both of them are low paid employees. He farther states that though the order passed is correct, the penalty imposed is harsh. He also pleads for reduction in redemption fine imposed in respect of the affected scooter.

8. After considering arguments from both sides, we are of the view that the adjudicating Commissioner has passed a detailed speaking order and he is correct in placing reliance on the statements recorded under Section 108 of the Customs Act, 1962 in view of the case laws cited by him. Accordingly, we are of the view that confiscation of the foreign currency and Indian currency is in order.

9. As regards the penalty imposed, after considering all aspects of the case including cited case laws and individual role of the appellants, we are of the view that the penalties imposed call for reduction. As such, we reduce the penalty on Shri Haresh Pherwani from Rs. 5 Lakhs to Rs. 2 Lakhs and direct that the same be adjusted against pre-deposit of Rs. 2 Lakhs already made. As regards the penalties on Shri Madan Jain is concerned, we reduce the same to Rs. 50,000/- and we reduce penalties on Shri Prakash Jain and Shri Ashok Pahuja to Rs. 20,000/-and Rs. 10,000/- respectively. As regards redemption fine in respect of the confiscated scooter, we reduce the same from Rs. 10,000/- to Rs. 2,500/-. These appeals are disposed of in the above terms.