D. Shivaji Sait Salukhe Vs. Collector of Customs and Central - Court Judgment

Excerpt:
1. this is an appeal against the order of the additional collector of customs, madurai, dated 12.12.1988. brief facts of the case are that 4 bits of primary gold kept in a box concealed in a secret cavity at the bottom of a wooden shelf in the kitchen were recovered from the appellant's premises, used for residential purposes and also for silver refinery. the weight of the gold bits seized was 25 gms. of 99.9% purity and one of the bits bore foreign markings on it. the officers also recovered indian currency of rs. 66,000 from a steel almirah. the appellant in a statement before the authorities admitted to have been engaged in the sale of the gold bars on commission and named the person who had given the gold for sale on earlier occasions. the currency seized, according to the statement recorded from the appellant on the date of seizure i.e. 31.7.1987, was the sale proceeds of the foreign marked gold bars sold by him and which had been earlier brought by the said person, manian. the appellant also revealed that the said manian belonged to sri lanka. the appellant, however, in a telegram sent to the collector on 31.7.1987 retracted from his statement and pleaded that the currency actually belonged to him and was not the sale proceeds of gold. i ater on the appellant claimed that the said gold bits seized were pledged with him by a broker, whose name he did not know, about two years back and he denied that he had received any gold from manian as stated by him earlier. the lower authority under the impugned order, however, after giving an opportunity to the appellant as required under jaw, confiscated the currency valued at rs. 66,000 under section 121 of the customs act, 1962, and also confiscated the gold bits recovered and also levied a penalty of rs. 5,000 on the appellant.2. the learned advocate for the appellant pleaded that out of the 25 gms. of gold bits seized only one gold bit weighing 12 gms. bore foreign markings and pleaded that, no doubt, the appellant had given an inculpatory statement in the beginning but later on he had retracted the same and. therefore, pleaded that the currency seized from the appellant could not be considered as sale proceeds of smuggled gold as no evidence in this regard had been adduced by the authorities. he pleaded that inasmuch as the inculpatory statement given on 31.7,1987 was retracted on the same day in regard to the currency seized, the burden was on the department to prove that the same represented the sale proceeds of smuggled gold and it was for the department to discharge the initial burden in this regard. he pleaded that the officers had recorded the statement and the appellant's endorsement was obtained thereon and as such the same could not be taken to be voluntary statement in the facts and circumstances of the case. in this connection he drew our attention to the statement recorded and pointed out that the statement has been recorded in tamil and the appellant's endorsement is in hindi. the learned advocate pleaded for the return of the currency. in regard to the gold he pleaded that one bit of gold had foreign markings and left it to the bench to decide in regard to the release of the gold. he also pleaded for the reduction of the penalty as the appellant bad already suffered a lot.3. the learned senior d. r. for the department pleaded that the original statement given by the appellant was inculpatory and the statement recorded in tamil was endorsed by the appellant. regarding the correctness of the same, he pleaded that the fact that foreign marked gold bits were seized from the appellant has corroborated that the appellant had earlier dealt with foreign marked gold and rs. 66,000 is the sale proceeds of two gold bits which were sold by him. he pleaded that if the appellant was aggrieved over the recording of the statement, he could have cross-examined the officers to bring home the truth but the appellant never asked for the same. regarding the plea made by the learned advocate for the appellant that the appellant had sufficient income and that he was an income-tax assesses and that he had at different times large amounts kept with him, the learned senior d. r. pleaded that notwithstanding this, position regarding the large amount in possession of the appellant had not been explained by the appellant and the inference drawn against him that the same was the sale proceeds of smuggled gold was maintainable.4. the first issue that falls for our consideration is whether the currency seized from the appellant represented the sale proceeds of foreign mark-ed gold. it is seen in the first statement recorded from the appellant that the appellant had given the details which could be only known to him regarding his past dealings in foreign marked gold and the person who was supplying him the gold and the price at which he sold the same and also the commission he got for the same. the fact that he was dealing in foreign marked gold is borne out by the seizure of one of the gold bits which bore the foreign markings. the appellant stated on 31.7.1987 in his statement that the gold bit was left over from the foreign marked gold bar which had been broken into bits for the purpose of sale. the appellant, however, by a telegram on the same day addressed to the collector, as seen from the record, had claimed that the currency belonged to him and this was followed up by a letter addressed to the collector of central excise again reiterating that the money belonged to him and was not the sale proceeds of the smuggled gold and he also submitted his income-tax return to show that the money was out of his income from his business. he also pleaded that the gold bits seized did not belong to him and they were pledged by the brokers of madurai gold bazaar and the same had not been redeemed for a long time. he, however, in so far as the pledging of the gold bits was concerned did not produce any evidence in support nor the persons who are stated to have pledged the same. the statement, as seen from the record, recorded from him on 24.9.1987 was again recorded in tamil and accepted by the appellant as correct. this statement was in question and answer form. the appellant was specifically asked regarding the claim of pledging of the gold bits by the brokers with him and the appellant stated that the said gold bits were pledged with him about two years back by a broker and that he did not know the said broker's name and address and also he had no account in regard to the same. he could not also give any clue to the identity of the person who pledged the gold bits. on being questioned that on 31.7.1987 he had stated that he received the gold bits from manian while his statement now was that the same had been given by the brokers and that which of the two versions was correct, he stated that what he was now stating was correct and that he was in an agitated mood and told a lie earlier that he took the gold bits from manian. in this background, therefore, the question is whether the appellant's version that the foreign marked gold had been pledged with him by a broker could be accepted. the appellant has stated that since he was in an agitated mood on 31.7.1987 when the seizure was made in the first statement recorded from him he had told a lie that the gold being from manian it is not believable that the appellant will bring in the name of a person for no apparent advantage to him when the facts known to him were other-wise on the day of the seizure. the appellant's plea that the statement recorded on 31.7.1987 was written by the officers and merely endorsed by him cannot be accepted as on 24.9.1987 in the statement in the question and answer form recorded from him he never stated that what was written was by the officers themselves that he had merely signed it and in fact stated that he did mention in the statement on 31.7.1987 that the gold was given by manian but that it was a he. he had ample opportunity to bring on record his version that what was recorded was dictated by the officers on their own and that he had not stated what had been set out in the statement on 31.7.1987. he, however, on 24.9.1987 confirmed that he had mentioned that the gold was given by manian but that was a lie as he was in an agitated mood. this explanation certainly is not acceptable. as mentioned above, the appellant by bringing in manian had nothing actually to gain and obviously at the first flush, when he was faced with the situation when the officers found foreign marked gold with him and also a large amount of currency, he spilled the beans. no explanation also has been given as to how the appellant had managed to get together the amount of rs. 66,000 with him, when the income declared by him to the income-tax authorities was such that he was paying the income-tax of only about rs. 1,000 and odd. this amount on the basis of the rate at which he had sold the gold earlier as stated by him on 31.7.1987 reflected the exact amount for 2 biscuits stated to have been sold. from the above analysis the position that emerges is as under: (1) the appellant was found to be in possession of a bit of foreign marked gold, which confirms that the appellant was dealing in foreign marked gold. (2) the appellant was in possession of rs. 66,000 for which be had no valid explanation to offer in support of his plea that it was not the sale proceeds of foreign gold but the currency belonged to him. (3) the amount of rs. 66,000 was the amount which reflected the sale price of 2 gold biscuits at the rates indicated by him in the statement recorded on 31.7.1987 in respect of the sale of foreign marked gold. (4) the statement recorded was not as put down by the officers but what was dictated by the appellant as the crucial fact that he was receiving the gold from manian was stated by him, as admitted by him in his statement on 24.9.1987. (5) the statement as recorded on 31.7.1987 has to be taken to have been given voluntarily by him as the same stands confirmed by the crucial fact regarding the dealing with one mr. manian as having been stated by him.in view of the above, we hold that in the light of the inculpatory statement given by the appellant coupled with the recovery of the foreign marked gold and the currency seized from him the appellant has sold two foreign marked gold biscuits and the currency reflected the sale proceeds of the same and the lower authority's order confiscating the currency is maintainable in law. the facts of this case are distinguishable from the facts of the case in subramania moothan v.collector of customs and ors., indian law reports 1975 (2) kerala series page 66, cited by the appellant as in that case there was an explanation right at the initial stage as to the origin of the currency. so far as the gold bit with foreign marking is concerned, the appellant has not discharged the burden that the same had been licitly acquired and, therefore, confiscation of the same is maintainable in law. so far as the other bits are concerned, the purity of the same is 99.9%. as held by the hon'ble supreme court in the case of mohanlal jitamalji porwal v. state of gujarat , this purity is not produced in india and in the background of the facts and circumstances of the case, the same also have to be considered as smuggled gold and to be not of licit origin and the confiscation of the same is also maintainable in law.5. we observe that the personal penalty imposed on the appellant can-not be considered as excessive and there is no warrant for reduction of the same, taking into consideration the fact that the appellant bad been acting as conduit for disposal of smuggled gold and a serious view is called for in this regard.

Judgment:
1. This is an appeal against the order of the Additional Collector of Customs, Madurai, dated 12.12.1988. Brief facts of the case are that 4 bits of primary gold kept in a box concealed in a secret cavity at the bottom of a wooden shelf in the kitchen were recovered from the appellant's premises, used for residential purposes and also for silver refinery. The weight of the gold bits seized was 25 gms. of 99.9% purity and one of the bits bore foreign markings on it. The officers also recovered Indian currency of Rs. 66,000 from a steel almirah. The appellant in a statement before the authorities admitted to have been engaged in the sale of the gold bars on commission and named the person who had given the gold for sale on earlier occasions. The currency seized, according to the statement recorded from the appellant on the date of seizure i.e. 31.7.1987, was the sale proceeds of the foreign marked gold bars sold by him and which had been earlier brought by the said person, Manian. The appellant also revealed that the said Manian belonged to Sri Lanka. The appellant, however, in a telegram sent to the Collector on 31.7.1987 retracted from his statement and pleaded that the currency actually belonged to him and was not the sale proceeds of gold. I ater on the appellant claimed that the said gold bits seized were pledged with him by a broker, whose name he did not know, about two years back and he denied that he had received any gold from Manian as stated by him earlier. The lower authority under the impugned order, however, after giving an opportunity to the appellant as required under Jaw, confiscated the currency valued at Rs. 66,000 under Section 121 of the Customs Act, 1962, and also confiscated the gold bits recovered and also levied a penalty of Rs. 5,000 on the appellant.

2. The learned Advocate for the appellant pleaded that out of the 25 gms. of gold bits seized only one gold bit weighing 12 gms. bore foreign markings and pleaded that, no doubt, the appellant had given an inculpatory statement in the beginning but later on he had retracted the same and. therefore, pleaded that the currency seized from the appellant could not be considered as sale proceeds of smuggled gold as no evidence in this regard had been adduced by the authorities. He pleaded that inasmuch as the inculpatory statement given on 31.7,1987 was retracted on the same day in regard to the currency seized, the burden was on the Department to prove that the same represented the sale proceeds of smuggled gold and it was for the Department to discharge the initial burden in this regard. He pleaded that the officers had recorded the statement and the appellant's endorsement was obtained thereon and as such the same could not be taken to be voluntary statement in the facts and circumstances of the case. In this connection he drew our attention to the statement recorded and pointed out that the statement has been recorded in Tamil and the appellant's endorsement is in Hindi. The learned Advocate pleaded for the return of the currency. In regard to the gold he pleaded that one bit of gold had foreign markings and left it to the Bench to decide in regard to the release of the gold. He also pleaded for the reduction of the penalty as the appellant bad already suffered a lot.

3. The learned Senior D. R. for the Department pleaded that the original statement given by the appellant was inculpatory and the statement recorded in Tamil was endorsed by the appellant. Regarding the correctness of the same, he pleaded that the fact that foreign marked gold bits were seized from the appellant has corroborated that the appellant had earlier dealt with foreign marked gold and Rs. 66,000 is the sale proceeds of two gold bits which were sold by him. He pleaded that if the appellant was aggrieved over the recording of the statement, he could have cross-examined the officers to bring home the truth but the appellant never asked for the same. Regarding the plea made by the learned Advocate for the appellant that the appellant had sufficient income and that he was an Income-tax assesses and that he had at different times large amounts kept with him, the learned Senior D. R. pleaded that notwithstanding this, position regarding the large amount in possession of the appellant had not been explained by the appellant and the inference drawn against him that the same was the sale proceeds of smuggled gold was maintainable.

4. The first issue that falls for our consideration is whether the currency seized from the appellant represented the sale proceeds of foreign mark-ed gold. It is seen in the first statement recorded from the appellant that the appellant had given the details which could be only known to him regarding his past dealings in foreign marked gold and the person who was supplying him the gold and the price at which he sold the same and also the commission he got for the same. The fact that he was dealing in foreign marked gold is borne out by the seizure of one of the gold bits which bore the foreign markings. The appellant stated on 31.7.1987 in his statement that the gold bit was left over from the foreign marked gold bar which had been broken into bits for the purpose of sale. The appellant, however, by a telegram on the same day addressed to the Collector, as seen from the record, had claimed that the currency belonged to him and this was followed up by a letter addressed to the Collector of Central Excise again reiterating that the money belonged to him and was not the sale proceeds of the smuggled gold and he also submitted his income-tax return to show that the money was out of his income from his business. He also pleaded that the gold bits seized did not belong to him and they were pledged by the brokers of Madurai Gold bazaar and the same had not been redeemed for a long time. He, however, in so far as the pledging of the gold bits was concerned did not produce any evidence in support nor the persons who are stated to have pledged the same. The statement, as seen from the record, recorded from him on 24.9.1987 was again recorded in Tamil and accepted by the appellant as correct. This statement was in question and answer form. The appellant was specifically asked regarding the claim of pledging of the gold bits by the brokers with him and the appellant stated that the said gold bits were pledged with him about two years back by a broker and that he did not know the said broker's name and address and also he had no account in regard to the same. He could not also give any clue to the identity of the person who pledged the gold bits. On being questioned that on 31.7.1987 he had stated that he received the gold bits from Manian while his statement now was that the same had been given by the brokers and that which of the two versions was correct, he stated that what he was now stating was correct and that he was in an agitated mood and told a lie earlier that he took the gold bits from Manian. In this background, therefore, the question is whether the appellant's version that the foreign marked gold had been pledged with him by a broker could be accepted. The appellant has stated that since he was in an agitated mood on 31.7.1987 when the seizure was made in the first statement recorded from him he had told a lie that the gold being from Manian It is not believable that the appellant will bring in the name of a person for no apparent advantage to him when the facts known to him were other-wise on the day of the seizure. The appellant's plea that the statement recorded on 31.7.1987 was written by the officers and merely endorsed by him cannot be accepted as on 24.9.1987 in the statement in the question and answer form recorded from him he never stated that what was written was by the officers themselves that he had merely signed it and in fact stated that he did mention in the statement on 31.7.1987 that the gold was given by Manian but that it was a he. He had ample opportunity to bring on record his version that what was recorded was dictated by the officers on their own and that he had not stated what had been set out in the statement on 31.7.1987. He, however, on 24.9.1987 confirmed that he had mentioned that the gold was given by Manian but that was a lie as he was in an agitated mood. This explanation certainly is not acceptable. As mentioned above, the appellant by bringing in Manian had nothing actually to gain and obviously at the first flush, when he was faced with the situation when the officers found foreign marked gold with him and also a large amount of currency, he spilled the beans. No explanation also has been given as to how the appellant had managed to get together the amount of Rs. 66,000 with him, when the income declared by him to the Income-tax authorities was such that he was paying the income-tax of only about Rs. 1,000 and odd. This amount on the basis of the rate at which he had sold the gold earlier as stated by him on 31.7.1987 reflected the exact amount for 2 biscuits stated to have been sold. From the above analysis the position that emerges is as under: (1) The appellant was found to be in possession of a bit of foreign marked gold, which confirms that the appellant was dealing in foreign marked gold. (2) The appellant was in possession of Rs. 66,000 for which be had no valid explanation to offer in support of his plea that it was not the sale proceeds of foreign gold but the currency belonged to him.

(3) The amount of Rs. 66,000 was the amount which reflected the sale price of 2 gold biscuits at the rates indicated by him in the statement recorded on 31.7.1987 in respect of the sale of foreign marked gold. (4) The statement recorded was not as put down by the officers but what was dictated by the appellant as the crucial fact that he was receiving the gold from Manian was stated by him, as admitted by him in his statement on 24.9.1987.

(5) The statement as recorded on 31.7.1987 has to be taken to have been given voluntarily by him as the same stands confirmed by the crucial fact regarding the dealing with one Mr. Manian as having been stated by him.

In view of the above, we hold that in the light of the inculpatory statement given by the appellant coupled with the recovery of the foreign marked gold and the currency seized from him the appellant has sold two foreign marked gold biscuits and the currency reflected the sale proceeds of the same and the lower authority's order confiscating the currency is maintainable in law. The facts of this case are distinguishable from the facts of the case in Subramania Moothan v.Collector of Customs and Ors., Indian Law Reports 1975 (2) Kerala Series page 66, cited by the appellant as in that case there was an explanation right at the initial stage as to the origin of the currency. So far as the gold bit with foreign marking is concerned, the appellant has not discharged the burden that the same had been licitly acquired and, therefore, confiscation of the same is maintainable in law. So far as the other bits are concerned, the purity of the same is 99.9%. As held by the Hon'ble Supreme Court in the case of Mohanlal Jitamalji Porwal v. State of Gujarat , this purity is not produced in India and in the background of the facts and circumstances of the case, the same also have to be considered as smuggled gold and to be not of licit origin and the confiscation of the same is also maintainable in law.

5. We observe that the personal penalty imposed on the appellant can-not be considered as excessive and there is no warrant for reduction of the same, taking into consideration the fact that the appellant bad been acting as conduit for disposal of smuggled gold and a serious view is called for in this regard.