Union of India Vs. Rajendra Prabhu & Anr [2001] Insc 154 (21 March 2001)
S.P.
Bharucha, N. Santosh Hegde & Y.K. Sabharwal. Santosh Hegde, J.
L.I.T.J
The
respondent herein was intercepted in the early hours of 22nd October, 1994 by the Circle Inspector of Police, Chalakudy
while he was travelling in a car. The Police recovered 30 gold biscuits of
foreign markings from him and the respondent was handed over to the
Superintendent of Customs, SCP Unit, Kodungalloor. It is stated that the
respondent made a statement the same day to the Customs authorities that he had
purchased the said gold from one P. Thomas of Kottayam for Rs.15 lakhs and that
he did not have any document to prove the licit importation of the said gold.
Therefore, the gold was seized under the Customs Act under a reasonable belief
that the gold biscuits were liable to be confiscated under the provisions of
the Customs Act.
On
23.10.1994, the respondent made a statement before the Customs Officers wherein
he reiterated that the gold in question was purchased from one P.Thomas and
gave a telephone number as belonging to said Thomas. The efforts of the Customs
Officers to locate the said Thomas proved futile as he was found to be a non-
existing person and the telephone number given by the respondent was found to
be a telephone registered in the name of State Bank of Travancore, Mannanam
Branch.
On
28.10.1994, i.e., 6 days later, one Balan wrote a letter to the Central Excise
Superintendent, SCP Unit, Kodungalloor and claimed that he had bought 42 gold
biscuits from Dubai on 19.10.1994 and cleared the same
on payment of customs duty at Trivandrum Airport. He also stated that out of the
same he had handed over as many as 30 gold biscuits to the respondent herein
for selling them at Coimbatore. He enclosed a copy of the receipt
indicating the payment of duty on 42 gold biscuits. After the receipt of the
letter of said Balan, i.e. on 31.10.1994, the respondent wrote a letter
corroborating the claim of said Balan. In a subsequent statement made on
14.11.1994 he retracted the statement made to the Customs Officers on
23.10.1994 and affirmed the claim of said Balan.
Both
the respondent as well as Balan were issued show cause notices by the Customs
authorities asking why the gold in question should not be confiscated and
penalty imposed under the Customs Act. Pursuant to the said show cause notice,
the respondent as well as Balan filed a reply and after hearing the parties the
Commissioner of Central Excise and Customs, Cochin by his order dated 12.1.1996
held that the gold seized from the respondent was not duty-paid and not
imported legally and accordingly was liable to confiscation under Section 11(a)
of the Customs Act, 1962.
He
further held that the respondent from whose possession the gold was seized was
liable for a penalty under Section 112(b) of the Customs Act, 1962 and
accordingly while confiscating the gold in question imposed a penalty of Rs.5 lakhs
on the respondent. The said Commissioner, however, came to the conclusion that
the said Balan was only lending his name in order to make the importation of
gold licit, hence he has not committed any offence punishable under Section
112(a) and (b), and held him not liable to any penalty under Section 112 of the
Customs Act.
The
respondent and said Balan both preferred an appeal before the Customs Excise
& Gold (Control) Appellate Tribunal, South Zonal Bench at Madras (the tribunal) wherein it was
contended that since the gold biscuits were seized by the Police originally,
the provisions of Section 123 of the Customs Act, 1962 cannot be invoked.
Therefore, in the absence of any presumption being available in favour of the
Department the burden was on the Department to prove that the gold in question
was smuggled. It was also contended that in view of the fact that the initial
statement of the respondent was taken under duress and coercion, and also in
view of the fact that the said statement was retracted, his original statement
cannot be taken into account. It was also argued that the document produced by
said Balan established the fact that the gold in question was legally imported
after payment of duty. The tribunal, after hearing the parties while dismissing
the appeal, reduced the penalty imposed on the appellant from Rs. 5 lakhs to Rs.
4 lakhs.
Aggrieved
by the said order of the tribunal, the appellant respondent herein as well as
said Balan preferred a writ petition before the High Court of Kerala which
petition came to be allowed by the judgment and order of the High Court dated
5.1.1999 and the High Court by the said order came to the conclusion that the
finding recorded by the statutory authorities is based on no evidence and can
be regarded as perverse, consequently issued a direction to the Commissioner of
Central Excise, Cochin, to return the 30 gold biscuits seized from the
respondent herein.
It is
against the judgment of the High Court that the appellants have preferred this
appeal. It is contended on behalf of the appellants before us that both the
original and the appellate authorities have carefully considered the material
that was placed before them by the Department as well as the respondent and
said Balan (who is not a respondent in this appeal before us) and having
appreciated the evidence on record, the said authorities have correctly come to
the conclusion that the gold in question was not legally imported into India.
It was also pointed out that from the first statement of the respondent it was
clear that he did not even know who was the importer of the gold and whether
any duty was paid for the import of the said gold.
It was
also pointed out that the respondent was not in possession of any document to
show the licit importation of the gold. In the said background, the authorities
justly came to the conclusion that the respondent at the time of his arrest was
transporting gold which was smuggled into the country. It was also contended
that the authorities below have correctly held that the document produced by
said Balan could not be correlated to the gold seized from the respondent and
it was only an attempt on the part of the respondent and said Balan to misuse
the document which has no connection with the gold seized. In this factual
background according to the appellants before us, the High Court exercising a
power under Article 226/227 of the Constitution of India could not have
re-appreciated the evidence on record and come to a different conclusion.
According
to the appellants, the finding of the High court that the decision of the authorities
impugned before it was either based on no evidence or perverse is wholly
unjustified. On behalf of the respondent before us while supporting the
judgment of the High Court, it is contended that the authorities below failed
to take note of the fact that the original statement of the respondent was in
fact obtained under duress and the said statement was rightly retracted once
the respondent was out of the clutches of the Customs Officers and, therefore,
no reliance could have been placed on the original statement made by the
respondent to the Customs Officers. In support of this contention, the counsel
for the respondent drew our attention to a noting made by the Magistrate on
24.10.1994 when the respondent was produced before him which reads thus:
The
accused is produced before me at 6.30 p.m. He stated that he was threatened
while recording statement.
But no
physical harm was caused to him. No visible mark of violence also. Perused the
remand report for the reasons stated therein accused is remanded to sub Jail, Ernakulam
till 30.10.1994.
Based
on the above notings of the Magistrate on behalf of the respondent, it is
contended that the said statement made to the Customs Officers cannot be relied
upon and if the same is eschewed, according to the counsel, there is no other
material based on which the respondent could have been found guilty of
possessing or transporting smuggled gold.
Having
heard learned counsel for the parties and after perusing the records, we are of
the opinion that even though the High Court rightly noticed its limited
jurisdiction under Articles 226 and 227 of the Constitution, it still proceeded
to reappreciate the evidence on record and substitute its subjective opinion in
place of the concurrent findings given by the statutory authorities. We are
also of the opinion that the finding of the High Court that the conclusions
arrived at by the statutory authority were not based on any evidence or could
be regarded as perverse, is erroneous and contrary to facts. Therefore, it has
become necessary for us to refer, though briefly, to the findings arrived at by
the statutory authorities while deciding this case to find out whether the High
Court was justified in reversing the finding of fact recorded by the statutory
authorities.
It is
an undisputed fact that the respondent herein was intercepted in the early
hours of 22.10.1994 by the Police of Chalakudy. During that process, Police
recovered from his possession as many as 30 gold biscuits with foreign
markings. The respondent was then handed over to the Customs Authorities at Kodungalloor
who recorded his statement in which admittedly the respondent did state that he
purchased the said gold biscuits from one P. Thomas of Kottayam for a sum of
Rs.15 lacs. He had also admitted that he did not have any document to prove the
licit importation of the said gold. According to the case of the appellants, it
is because of that that the gold was seized by the officials of the Customs
under the provisions of the Customs Act on the reasonable belief that the said
gold biscuits were smuggled and liable for confiscation. The respondent was
thereafter produced before the jurisdictional Magistrate on 24.10.1994 when he
did mention before the Magistrate that he had made a statement under threat but
the Magistrate has recorded that no physical harm was caused to him nor any
physical marks of violence were found on his person, and thereafter the said
Magistrate remanded him to judicial custody till 30.10.1994. It is also to be
noticed that on an inquiry, it was found that the name of P. Thomas given by
the respondent was found to be a bogus name and the telephone number of the
said Thomas was also a fictitious one inasmuch as the said telephone belonged
to the State Bank of Travancore. Therefore, the authorities below rightly came
to the conclusion that at the time when he made the statement the respondent
was not in a position to explain the circumstances under which he came into
possession of the said gold and had obviously put forward a false case. The authorities
below have also taken note of the fact that when the respondent moved the bail
application, he had in specific terms retracted his statement made earlier but
on a consideration of the material on record, they chose to rely on the earlier
statement holding his later retraction was an after thought.
It is
only on 28.10.1994 that one Balan came forward with a claim that he had
imported the said gold from Dubai on
19.10.1994 and that he had paid the customs duty at Trivandrum airport. In that claim statement, Balan
had also stated that he handed over 30 gold biscuits to the respondent for
selling them at Coimbatore. The authorities below came to the
conclusion that this belated claim of said Balan could not be believed because
if as a matter of fact the gold was licitly imported into this country, and Balan
had as a matter of fact given the gold to the respondent to sell it in Coimbatore
then there was absolutely no reason why the respondent could not have disclosed
the source of the gold which was found in his possession as being legally
imported and belonging to Balan. Both the authorities below also rejected the
document produced by Balan on the ground that the gold mentioned in that
document could not be correlated to the gold recovered from the possession of
the respondent. We do not find any perversity in the appreciation of this
evidence by the original authority and the tribunal. It is based on these facts
and circumstances that the gold seized from the possession of the respondent
was confiscated by the order of the original authority as confirmed by the
appellate authority. These findings of the authorities below to which we have
made a brief reference to show that the findings are based on the material on
record and, in our opinion, are arrived at on a reasonable and legitimate
assessment of the evidence on record.
The
High Court, however, by the impugned order came to the conclusion that the
initial burden of proving that the goods in question were smuggled, lay on the
Department which according to it, was not discharged by the Department. This
conclusion of the High Court is obviously based on a misappreciation of the
evidence that was already considered by the lower authorities. The High Court,
in our opinion, not only erred in reappreciating the evidence already
considered by the authorities below and in that process committed a further
error of substituting its subjective opinion in the place of the findings of
the authorities below. Therefore, we are of the opinion that the finding of the
High Court that the concurrent conclusions of the statutory authorities were
either not based on evidence or were perverse, is unsustainable.
On
behalf of the respondents, it was contended before us that the Department could
not have taken advantage of the presumption available under Section 123 of the
Customs Act, 1962 in view of the fact that the gold in question was seized
originally not by the Customs authorities but by the Police personnel. From the
material available on record, we find that on finding the respondent carrying
the gold in question, the Police as a matter of fact did not seize the gold but
actually produced the respondent with the gold which was in his possession,
before the Customs Authorities who in fact on such production, seized the gold.
Be that as it may, we notice that the appellate authority itself did not choose
to rely upon any presumption available under Section 123 of the Customs Act but
proceeded to consider and rely upon the material that was available to
establish that on the date of arrest the respondent was in possession of
unmarked gold biscuits; in regard to origin of which or importation of which
the respondent was either ignorant or was not willing to divulge and remained
evasive. The authorities also have taken note of other materials on record to
which we have already made reference and which, in our opinion, are sufficient
in the circumstances of this case to come to the conclusion that the gold found
in possession of the respondent is liable for confiscation and the respondent
was liable for the penalty de hors the presumption contemplated under Section
123 of the Customs Act.
For
the reasons stated above, this appeal succeeds, the impugned judgment is set
aside and the order of confiscation and the penalty as imposed by the
Commissioner and as modified by the tribunal shall be restored.
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