Mohd. Mohmood Vs. Collector of Cus. and C. Ex. - Court Judgment

Excerpt:
1. this appeal is directed against the order of the collector of customs and central excise, hyderabad, dated 9-1-1992 levying a penalty of rs. 1,00,000/- on two counts under the provisions of the customs act, 1962 and the gold (control) act, 1968 on the appellants.2. on 18-3-1990 officers of the customs and central excise, hyderabad intercepted a bus at saheerabad check post and found behind the driver's seat one hindi newspaper racket fastened with adhesive tape and it was found to contain 6 gold biscuits with foreign markings. the driver of the bus identified one arif as the owner of the gold biscuits. the authorities effected seizure of the gold biscuits under a mahazar as per law. statement was also recorded from arif on the same day wherein he had admitted that he was a carrier and sent by the appellant to bombay to fetch gold and that he had been doing such job in the past also. another statement was also recorded from the said carrier on 19-3-1990 wherein he corroborated his earlier statement and the proceedings initiated thereafter resulted in the impugned order.3. shri v.j. sankaram, the learned counsel for the appellant submitted that excepting the retracted statement or the carrier there is absolutely no shred of evidence even remotedly connecting the appellant with the commission of offence warranting levy of penalty on him. it was further urged that the carrier arif rectracted his statement on 1-5-1990. apart from it on 10-10-1991, during cross-examination the said carrier was asked whether he knew the appellant, the carrier stated that he had not seen him earlier. the learned counsel therefore submitted that on the basis of the, retracted statement more so when the carrier had stated that he had not even seen the appellant, the appellant would be entitled to benefit of doubt in the facts and circumstances of the case.5. i have considered the submissions made by both the sides. the gold biscuits under seizure are not claimed by the appellant and the same have been absolutely confiscated under the impugned order. so far as the carrier arif is concerned, he was also penalised on two counts under the provisions of the customs act, 1962 and gold (control) act, 1968 in a sum of rs. 50,000/- on each count and as it is neither side is able to inform me as to whether the said arif has filed any appeal against imposition of penalty on him. be that as it may, the short question that arises for consideration in the present appeal is whether there is any evidence against the appellant either directly or circumstantially connecting him with the gold biscuits under seizure warranting levy of penalty under the customs act, 1962 and the gold (control) act, 1968. no doubt on going through the entire statement recorded from arif it would be seen that the appellant is implicated when the statement was recorded. it is well settled law that in the absence of corroborative material penalty cannot be levied purely on the basis of retracted statement particularly when the proceedings are penal in nature. in the present case, apart from the retraction by carrier arif, on 10-1-1991 during cross-examination, pointing out to the appellant, putting a question as whether he (arif) had seen the appellant earlier, arif answered in the negative, but unfortunately, the department has not done any investigation by way of identification of the appellant with the help of his photograph earlier and feel satisfied that arif was referring to the same person (appellant). no doubt, on going through the entire statement of arif, i have doubt about the culpability of the appellant, but nevertheless dealing as i do with penal proceedings, when the appellant has given an exculpatory statement and when the only evidence against the appellant is the retracted statement of arif the carrier who during the cross-examination, answered that he had not seen the appellant earlier at all, i am left with no other alternative except to give the benefit of doubt to the appellant though the circumstances do engender in my mind a grave suspicion. nevertheless, since suspicion cannot take the place of proof in the absence of any evidence, i am left with no other alternative except to give the appellant the benefit of doubt. in this view of the matter i give him the benefit of doubt arising in the facts and circumstances of the case and set aside the penalty levied on him.i further find that while hearing the stay petition on 6-8-1992, the bench observed as under : "we have gone through the records. excepting the retracted statement of mohd. arif, we do not find any other evidence to connect the petitioner with the gold in question. moreover, petitioner mohd. mahmood has given an exculpatory statement denying even acquaintenance of the said arif or any connection with him in any manner at any time. we also do not find any material relating to investigation about the connection between the said arif and petitioner mohd. mahmood or about the place where the gold is alleged to have been procured at bombay".

Judgment:
1. This appeal is directed against the order of the Collector of Customs and Central Excise, Hyderabad, dated 9-1-1992 levying a penalty of Rs. 1,00,000/- on two counts under the provisions of the Customs Act, 1962 and the Gold (Control) Act, 1968 on the appellants.

2. On 18-3-1990 officers of the Customs and Central Excise, Hyderabad intercepted a bus at Saheerabad Check Post and found behind the driver's seat one Hindi Newspaper racket fastened with adhesive tape and it was found to contain 6 gold biscuits with foreign markings. The driver of the bus identified one Arif as the owner of the gold biscuits. The authorities effected seizure of the gold biscuits under a mahazar as per law. Statement was also recorded from Arif on the same day wherein he had admitted that he was a carrier and sent by the appellant to Bombay to fetch gold and that he had been doing such job in the past also. Another statement was also recorded from the said carrier on 19-3-1990 wherein he corroborated his earlier statement and the proceedings initiated thereafter resulted in the impugned order.

3. Shri V.J. Sankaram, the learned Counsel for the appellant submitted that excepting the retracted statement or the carrier there is absolutely no shred of evidence even remotedly connecting the appellant with the commission of offence warranting levy of penalty on him. It was further urged that the carrier Arif rectracted his statement on 1-5-1990. Apart from it on 10-10-1991, during cross-examination the said carrier was asked whether he knew the appellant, the carrier stated that he had not seen him earlier. The learned Counsel therefore submitted that on the basis of the, retracted statement more so when the carrier had stated that he had not even seen the appellant, the appellant would be entitled to benefit of doubt in the facts and circumstances of the case.

5. I have considered the submissions made by both the sides. The gold biscuits under seizure are not claimed by the appellant and the same have been absolutely confiscated under the impugned order. So far as the carrier Arif is concerned, he was also penalised on two counts under the provisions of the Customs Act, 1962 and Gold (Control) Act, 1968 in a sum of Rs. 50,000/- on each count and as it is neither side is able to inform me as to whether the said Arif has filed any appeal against imposition of penalty on him. Be that as it may, the short question that arises for consideration in the present appeal is whether there is any evidence against the appellant either directly or circumstantially connecting him with the gold biscuits under seizure warranting levy of penalty under the Customs Act, 1962 and the Gold (Control) Act, 1968. No doubt on going through the entire statement recorded from Arif it would be seen that the appellant is implicated when the statement was recorded. It is well settled law that in the absence of corroborative material penalty cannot be levied purely on the basis of retracted statement particularly when the proceedings are penal in nature. In the present case, apart from the retraction by carrier Arif, on 10-1-1991 during cross-examination, pointing out to the appellant, putting a question as whether he (Arif) had seen the appellant earlier, Arif answered in the negative, but unfortunately, the Department has not done any investigation by way of identification of the appellant with the help of his photograph earlier and feel satisfied that Arif was referring to the same person (appellant). No doubt, on going through the entire statement of Arif, I have doubt about the culpability of the appellant, but nevertheless dealing as I do with penal proceedings, when the appellant has given an exculpatory statement and when the only evidence against the appellant is the retracted statement of Arif the carrier who during the cross-examination, answered that he had not seen the appellant earlier at all, I am left with no other alternative except to give the benefit of doubt to the appellant though the circumstances do engender in my mind a grave suspicion. Nevertheless, since suspicion cannot take the place of proof in the absence of any evidence, I am left with no other alternative except to give the appellant the benefit of doubt. In this view of the matter I give him the benefit of doubt arising in the facts and circumstances of the case and set aside the penalty levied on him.

I further find that while hearing the stay petition on 6-8-1992, the Bench observed as under : "We have gone through the records. Excepting the retracted statement of Mohd. Arif, we do not find any other evidence to connect the petitioner with the gold in question. Moreover, petitioner Mohd.

Mahmood has given an exculpatory statement denying even acquaintenance of the said Arif or any connection with him in any manner at any time. We also do not find any material relating to investigation about the connection between the said Arif and petitioner Mohd. Mahmood or about the place where the gold is alleged to have been procured at Bombay".