Commissioner of Customs (Preventive) Vs. Vijay Dasharath Patel [2007] Insc 250 (8
March 2007)
S.B. Sinha & Markandey Katju
(Arising out of S.L.P. (C) No. 7947 of 2006) With CIVIL APPEAL NO. 1206/2007
@ S.L.P.(C)No.10603 of 2006 CIVIL APPEAL NO. 1207/2007 @ S.L.P.(C)No.11522 of
2006 CIVIL APPEAL NO. 1208/2007 @ S.L.P.(C)No.13000 of 2006 CIVIL APPEAL NO.
1209/2007 @ S.L.P.(C)No.14311 of 2006 CIVIL APPEAL NO. 1205/2007 @
S.L.P.(C)No.14312 of 2006 S.B. Sinha, J.
Leave granted in S.L.Ps.
These appeals are directed against a judgment and order dated 30th January,
2006 passed by the High Court of Gujarat at Ahmedabad in Tax Appeal Nos. 1923,
1924, 1925, 1930, 1928 and 1929 of 2005 respectively, whereby and whereunder
the appeal preferred by the appellant herein was dismissed holding that no
substantial question of law for its consideration had arisen therein. The
factual matrix obtaining herein is not in dispute.
Eight persons including the respondents herein were detained for carrying
551 gold biscuits of foreign origin, the details whereof are as under :
Sr.No.
Name Foreign Mark of gold Quan- tity Nature of possession of gold bars 1.
Sh. Shailesh Ratilal Patel, Proprietor of M/s. S.K. Jewellers ARGOR SUISSE
100 Kept in 4 plastic packets each of 25 bars 2.
Sh. Vijaybhai Dashrathlal Patel, Proprietor of M/s.
Paras Bullion (Respondent herein) CREDIT HERAEUS 90 A small green bag
carried by him 3.
Smt. Rasilaben Rathod ARGOR HERAEUS 95 Under her attire tied with a waist
belt 4.
Shri Jaswantbhai K.
Patel ARGOR HERAEUS PAMP SUISSE JOHNSON MATHEY 95 09 09 Hidden in sole of
the shoes 5.
Bhikhabhai T.K. Patel CREDIT SUISSE 55 Hidden in sole of the shoes 6.
Arvindbhai K.K. Patel ARGOR HERAEUS 55 Hidden in sole of the shoes 7.
Shri Nandubhai Brijlal Soni UBS 51 Hidden in sole of the shoes 8.
Nathubhai @ Nitinbhai B. Patel CREDIT SUISSE 55 Hidden in sole of the shoes
Out of the said 551 of gold biscuits, 200 belonged to Shri Vijaybhai
Dashrathlal Patel, Proprietor of M/s. Paras Bullion, whereas 351 belonged to
Shri Shailesh Ratilal Patel, Proprietor of M/s. S.K. Jewellers. Both of them
were arrested. They made their statements under Section 108 of the Customs Act,
1962 ('the Act', for short). Shri Vijaybhai Dashrathlal Patel, respondent
herein, allegedly, in his statement disclosed that he had purchased the said
200 gold biscuits from one Ridhi Siddhi Bullion Ltd. who had produced a
delivery challan of ABN AMRO Bank issued in its favour.
Other than the said delivery challan, allegedly, he could not produce any
other document. The purported letter of ABN AMRO Bank dated 12.11.1999
addressed the Assistant Commissioner of Customs, Ahmedabad is in the following
terms :
"We wish to inform you that we had sold 100 Ten Tola Gold Bars and 150
Ten Tola Gold Bars to the captioned company under our invoice numbers
99/BAR/138 dated 25th October, 1999 for Rs.55,53,640/- and 99/BAR/139 dated
25th October, 1999 for Rs.81,49,025/-.
The above Ten Tola Gold Bars were out of the consignment stock of 1000 TT
bars imported by us from Credit Suisse First Boston, Zurich under AWB No.085-
1490-2753 dated 20th September, 1999. We had paid the applicable customs duty
at the time of clearance of the consignment on 22nd September, 1999. We also confirm that the delivery was effected on our behalf by M/s.
Brinks Arya (India) Pvt. Ltd., Ahmedabad.
This letter has been issued at the request of M/s.
Riddhisiddhi Bullions Ltd. We hope the above information is sufficient and
shall be glad to furnish any further information you may require."
According to him, he had sold 200 gold biscuits to one Devangbhai Patel on
23.10.1999, but had no document to establish the same or that he had not
received any payment therefor. It was the further statement of the said
respondent that he had sold 300 gold biscuits to Shailesh Patel, but again
therefor no commercial invoice or delivery challan had been issued. A further
statement was made to the effect that out of the said 300 gold biscuits, 130
having UBS marking were purchased from one K.L. Chokshi and remaining 170 were
purchased from different parties, but again therefor no payment was made either
in cash or cheque. Statement of Shailesh Patel was recorded on 24.10.1999 under
Section 108 of the Act when he disclosed that he had purchased 300 gold bars
from Paras Bullion but no bill had been issued therefor nor any payment has
been made by him. On the said date, statement of Naresh Chokshi was also
recorded, wherein, allegedly, he did not make any statement to the effect that
he had sold any gold bar of UBS mark to Paras Bullion. The second statement of
Shailesh Patel was recorded on 29.10.1999, wherein he reiterated his earlier
statement, stating :
"...On being further questioned, I have to state that the details of
the receipt/purchase of the said foreign mark gold biscuits are narrated in the
prior statement given by me..."
In his statement recorded on 28.10.1999, Vijay Dasharath Patel had made a
statement that details of purchases of the gold biscuits could be furnished
only upon perusal of his books of accounts.
We need not refer to the other statements made by other persons recorded by
the Customs Officers on that date, being not relevant for the purpose of this
case. We may, however, notice that proceedees retracted from their statements
on 11.11.1999, alleging that he had the requisite documents to support their
contentions that gold seized were not smuggled ones.
However, according to Vijay Dasharath Patel, 300 gold bars were sold to M/s.
S.K Jewellers, out of which 201 were purchased from M/s. K.L.
Chokshi and the rest were purchased from other jewellers. According to him,
he did not maintain any stock register. He further stated that he had sold 200
gold bars to Patel Bullion on 23.10.1999, although he had not received any
payment from the said vendee.
A show cause notice was issued upon the respondents on 1.3.2000 asking them
to show cause as to why the seized gold bars should not be confiscated and
penalty should not be imposed. Cause having been shown and the matter having
been heard, the Commissioner, by his order dated 28.2.2001, inter alia, held :
"....substantial number of foreign marked gold bars i.e.
361 pieces, were found to have been concealed in the shoes, body parts of
the noticees......
* * * * ....In their initial statements recorded before the Customs Officers
on 24.10.99 both Shri Shailesh R. Patel and Shri Vijay D Patel admitted that
they had no documents for legal importation....
* * * * ....Section 123 of the Customs Act, 1962,
which casts the burden in respect of "Gold", on the person from whose
possession it is recovered, to prove that it is not smuggled...
....Statements were not recorded under any duress or mental torture."
According to the Commissioner of Customs, the respondents had not discharged
their burden of proof in terms of Section 123 of the Act, in support whereof
the following findings were recorded :
? The delivery challan issued by ABN AMRO Bank to Riddi Siddi Bullion does
not in any way account for the possession of gold bars by Vijay Dashrath Patel.
? Shailesh Patel although stated that he had purchased 300 gold bars from
Paras Bullion, no bill was issued in his name by the aforesaid firm nor he has
made any payment towards purchase of 300 foreign marked gold bars.
? Statements dated 24.0.1999 were retracted on 29.10.1999 but retractions
cannot be relied upon.
? In the absence of any mention of identity or brand specifications of the
gold bars and also in face of a clear admission that no payments have been made
or received and no bills having been issued, it is fully established that all
500 gold bars were not legally imported or acquired.
? The bills bearing Nos.5877, 5960 and 5936 which have been produced by
Vijay Patel to prove his possession of 200 gold biscuits cannot be relied upon
at all. The gold biscuits seized are not of the same brand for which the bills
have been produced.
? On 24.10.1999, Vijay Dasharath Patel has stated that he had purchased 200
pieces of foreign mark gold bars of "CREDIT SUISSEE" mark from M/s
Riddi Siddi Bullion on 23.10.1999. However, from the statement of Shri Dinesh
authorised signatory of M/s Riddi Siddi Bullion did not mention whether the
gold biscuits delivered to Mr.
Vijay Dasharath Patel were of CREDIT SUISSEE mark. It was also observed that
the alleged Bill No.294/GL/99/2000 dated 23.10.1999 also does not show the
markings of the brand name of the gold biscuits.
? Statement of Ashwinbhai Patel is relied upon to show that Bill No.11931
was a complete after thought and it had been in fact prepared on 24.10.1999.
Ashwinbhai Patel had stated that his maternal nephew Shri Devang Patel had
phoned him on 24.10.1999 and informed him about the recovery of the gold
biscuits by police and on being called by him, he had gone to the residence of
Shri Vijay Dasharath Patel on 24.10.1999 and he had prepared the Bill No.11931.
? Both Vijay Dasharath Patel, Proprietor of Paras Bullion and Shailesh Patel
admitted that no payment has made for the 300 pieces of foreign mark gold bars
covered by Bill No.11931.
Further, the alleged Bill No.294/GL/99/2000 purported to be issued by Riddi
Siddi Bullion in favour of Paras Bullion for 350 gold bars does not contain the
details regarding identity/brand of the gold bars nor the printed or
pre-printed Sl.No. of the Bill. Also no evidence of payment made by M/s Paras
Bullion to M/s Riddi Siddi Bullion has been produced.
? M/s Riddi Siddi Bullion had relied upon Bill No.2753 dated 22.10.1999
issued by Anjali Exim Pvt. Ltd. in favour of M/s. Riddi Siddi Bullion for 200
gold brars of UBS mark. However, it is found that there are no gold biscuits of
foreign origin of UBS brand among the 500 gold biscuits and, therefore, the
said bill has no relevance with the gold biscuits under seizure.
? The plea taken by Vijay Dasharath Patel in his statement dated 11.11.2004
regarding the gold biscuits in his possession, is an after thought and the same
is not acceptable. In view of the facts which have been initially stated in the
statement dated 24.10.1999 and which have been corroborated by Shailesh Patel
in his statement dated 24.10.1999, it is established that there was no document
to show the source of 300 gold bars sold by Vijay to Shailesh Patel.
? It was found on close scrutiny of the documents that bills, delivery
challans, vouchers produced by the notices that none of these is serial
numbered or pre-serial numbered. Ad hoc numbers have been given to these
documents and hence these do not inspire confidence and hence the documents
produced have no credibility.
? Although it was admitted by Vijay Dasharath Patel and Shailesh Patel that
no bills, vouchers, delivery challans were issued in respect of the sale of 300
gold bars. Entries have been made and Bill No.11930 and 11931 have been subsequently
prepared on 24.10.1999 to legalise the sale.
? 72 entries of purchase and sale have been made in the stock account of M/s
Paras Bullion after the alleged transactions of bills No.11930 and 11931.
It is humanly impossible that all these entries can be made within one hour
and that the entries in which stock register of M/s Paras Bullion were made
with a view to create the impression of legal purchase and sale of 500 foreign
mark gold biscuits.
? No man of ordinary prudence will transport legally imported foreign mark
gold biscuits in the way notices have been found to be doing. The facts and
circumstances of the recovery of the gold bars by way of concealment in shoes
and other body parts of the notice is a positive circumstancial evidence to suggest
that the gold was illegally acquired and hence it was transported in a
surreptitious and clandestine manner more often adopted by smugglers.
? Satishbhai Patel, who is the accountant of M/s S.K.
Jewellers, was also liable as he had abetted Shailesh Patel in contravention
of the various provisions of the Customs Act.
? All the carriers of gold bars had not demanded any document in support of
the illicit import/ acquisition of the gold biscuits received by them from
Satish Patel and Vijay Dasharath Patel and as such have abetted Shailesh Patel
and Vijay Dasharath Patel in committing contravention of law.
? Accordingly, it was directed that the 500 gold bars weighing 58.320 Kgs.
valued at Rs.2,70,00,000/- be confiscated under section 111(D) of the Customs Act.
Penalties were also imposed on the notices."
Appeals filed by Respondents before the Tribunal, by reason of an order
dated 5.6.2003 were dismissed.
Applications for rectification of mistakes were filed alleging that various
aspects had not been considered in the original order. Special Civil
Application No. 5468 of 2004 was also filed before the High Court of Gujarat at
Ahmedabad against the said order of 5.6.2003.
The Tribunal by an order dated 7.1.2004 allowed the applications for
rectification of mistakes filed by the respondents.
Against the said order dated 7.1.2004, the Revenue filed Special Civil
Application No.2640 of 2004.
The High Court set aside the order dated 7.1.2004 passed by the Tribunal in
the applications for rectification of mistakes and on the same day allowed the
said Special Civil Application filed by the respondents, in terms whereof the order
of the Tribunal was set aside and the matter was directed to be considered
afresh.
The Tribunal, thereafter, passed an order on 30.9.2005, wherein, inter alia,
it was held :
"......This finding of the Commissioner cannot be upheld since the
Appellant has produced documentary evidence of having purchased/procured the
200 bars from RBL who in turn have got the same from M/s. ABL Amro Bank,
Ahmedabad, the importers of TT bars at Ahmedabad, one of the permissible route
as per the findings of the Commissioner. In any case, the Commissioner and the
department do not reject the letter dt.12.11.99 of ABN Amro Bank certifying
"CREDIT SUSSE" TT bars to RBL nor does the Commissioner find RBL to
have given forged/fabricated delivery challan/invoices to the appellants, ABN
Amro Bank or RBL or M/s. K.L. Chokshi or and M/s. Amrapali Industries are not
being questioned on their credibility the TT bars supplied by them cannot be
found to be non duty paid or and cleared from an unauthorized port without
payment of duty and thus liable to confiscation under Section 111(d) of the Customs Act, 1962...
* * * * ...Therefore, there was no reason to believe that gold covered by
the ABN Amro Bank document was not duty paid....."
Dealing with the submissions made on behalf of the proceedees, it was held :
"....These submissions have force and discharge the burden of the TT
bars to be duty paid and not smuggled...
* * * * ...Further, in their statements recorded on 24.10.1999 itself,
everybody i.e. Dinesh C. Jain of RBL, Sh. Naresh K. Chokshi of M/s. K.L.
Chokshi and Shri Yeshwant A.
Thakkar of Amrapali Ltd., not only admitted having sold the gold to the
appellants but also provided documentary evidence of having purchased the gold
from Banks. By not issuing any Show Cause Notice to those persons, we find that
the Revenue agrees and were fully satisfied that the gold was legally acquired
by them and supplied to the appellants.
* * * * ? Nandubhai Soni, one of the carriers was let off although he was
similarly placed as other carriers.
? Transportation of gold in shoes appears to be a normal fashion of
transporting gold bars, by carriers in the bullion market, irrespective of the
fact whether they have bills or vouchers.
? Satishbhai Patel, the Accountant of S.K. Jewellers cannot be said to have
abetted Shaileshbhai Patel by preparing ante dated bills. The proven practice
of sales in this market would led us to find nothing amiss in invoices being
written/prepared with or without brand marks.
? ABN AMRO Bank letter dated 12.11.99 confirms that the gold was legally
imported.
? Although the documents do not show that the gold bars were of a particular
origin, there is no statutory requirement which prescribe invoices to describe
foreign marks.
? Admitted fact that no payments were made as on the date of seizure in
respect of the seized gold bars.
However no adverse inference could be drawn.
? We do not consider anything to be amiss in payments for the 500 bars not
having been effected.
? We are arriving at our findings that the entire 551 gold TT bars..... To
be duty paid gold....
? Dinesh Jain, Naresh Chokshi and Yeshwant Thakkar of Amrapali admitted
having sold gold bars to the Appellants. The Revenue had not issued any show
cause to these persons.
? Confiscation order and penalty set aside."
As indicated hereinbefore, on an appeal preferred against the said judgment
by the Revenue, the High Court refused to interfere on the premise that no
substantial question of law arise for its consideration.
Mr. Mohan K. Parasaran, learned Additional Solicitor General appearing for
the Union of India would contend that the High Court committed a manifest error
in opining that no substantial question of law arose for its consideration,
although, it is evident that the Tribunal had failed to consider the well
reasoned judgment of the Commissioner of Customs in its proper perspective. The
learned counsel urged that the High Court failed to notice that the Tribunal
had referred to several trade practices in support whereof the proceedees did
not adduce any evidence. It was submitted that the Tribunal furthermore failed
to consider the question as to whether the proceedees had discharged their
burden of proof cast upon them in terms of Section 123 of the Act.
Mr. Joseph Vella Palli and Mr. Anand Narain Haksar, learned Senior Counsel
appearing on behalf of the respondents, on the other hand, would submit that
from a bare perusal of the order of the learned Tribunal, it would appear that
the reasonings of the Commissioner of Customs had been considered in great
details therein and, thus, this Court should not interfere therewith. It was
urged that no question of law was raised in relation to the specific findings
of fact arrived at by the Tribunal and in that view of the matter, having
regard to the provisions of Section 130 of the Act, the findings of fact being
binding on the High Court, no error has been committed by it in opining that no
substantial question of law arise for its consideration.
Section 130E of the Customs Act, as
it stood then, provided for an appeal from an order passed in appeal by the
Appellate Tribunal, save and except those specifically mentioned therein, only
in the event a satisfaction is arrived at by the High Court that the same
involves a substantial question of law.
Before the High Court, as also before us, several questions of law have been
raised. We, however, in view of the order proposed to be passed, need not deal
with all of them in details.
We are not oblivious of the fact that the High Court's jurisdiction in this
behalf is limited. What would be substantial question of law, however, would
vary from case to case.
Moreover, although, a finding of fact can be interfered with when it is
perverse, but, it is also trite that where the courts below have ignored the
weight of preponderating circumstances and allowed the judgment to be
influenced by inconsequential matters, the High Court would be justified in
considering the matter and in coming to its own independent conclusion.
{See Madan Lal vs. Mst. Gopi & Anr. [AIR 1980 SC 1754].} The High Court
shall also be entitled to opine that a substantial question of law arises for its
consideration when material and relevant facts have been ignored and legal
principles have not been applied in appreciating the evidence. Arriving at a
decision, upon taking into consideration irrelevant factors, would also give
rise to a substantial question of law. It may, however, be different that only
on the same set of facts the higher court takes a different view. {See
Collector of Customs, Bombay vs. Swastic Woollens (P) Ltd. & Ors. [(1988)
Supp. SCC 796]; and Metroark Ltd. vs.
Commissioner of Central Excise, Calcutta [(2004) 12 SCC 505].} Even in a
case where evidence is misread, the High Court would have power to interfere.
{See West Bengal Electricity Regulatory Commission vs. CESC Ltd. [(2002) 8 SCC
715]; and also Commissioner of Customs, Mumbai vs. Bureau Veritas & Ors.
[(2005) 3 SCC 265].} In M/s. Dutta Cycle Stores & Ors. vs. Gita Devi
Sultania & Ors.
[(1990) 1 SCC 586], this Court held :
"Whether or not rent for the two months in question had been duly paid
by the defendants is a question of fact, and with a finding of such fact, this
Court does not ordinarily interfere in proceedings under Article 136 of the
Constitution, particularly when all the courts below reached the same
conclusion. But where the finding of fact is based on no evidence or opposed to
the totality of evidence and contrary to the rational conclusion to which the
state of evidence must reasonably lead, then this Court will in the exercise of
its discretion intervene to prevent miscarriage of justice."
We have hereinbefore noticed the judgment of Tribunal as also the one
rendered by the Commissioner of Customs. The Commissioner of Customs, inter
alia, has gone into the entire materials brought on records by the parties. It
has taken into consideration a number of circumstances in arriving at its
findings. The Tribunal, however, as noticed hereinbefore, inter alia, not only
proceeded on the basis that one of the carriers had been let off but also the
purported normal fashion of transport of gold bars for which no evidence was
brought on records.
Mr. Joseph Vella Palli would submit that the Tribunal consists not only of
judicial member but also of technical member and in that view of the matter the
Tribunal could take judicial notice of the trade practice prevailing in a particular
trade and, thus, no illegality has been committed thereby. No evidence,
however, admittedly, was laid in relation to the purported trade practices. We,
therefore, cannot accept the said contention. This Court, in Hukma vs. State of
Rajasthan [AIR 1965 SC 476], laid down the law in the following terms :
".....Learned counsel rightly pointed that while S.178-A has the result
of placing the burden of proof that the gold was not smuggled on the accused,
it is of no assistance to the prosecution to prove that the accused was
carrying the gold knowingly to evade the prohibition which was for the time
being in force with respect to the import of gold into India. Once, however, it
is found, as it must be found in this case, in consequence of the provisions of
S.178-A (the accused has not tried to discharge the burden that lay on him that
the gold was not smuggled) that he was carrying smuggled gold, the
circumstances under which the gold was discovered, the manner in which he was
carrying the gold, the considerable quantity of the gold that was being carried
and the form in which gold was being carried, namely, blocks and bars in which
the major portion of the gold was found, all these circumstances establish
beyond a shadow of doubt that the accused was carrying the gold knowingly and
with the intention of evading the prohibition that was in force with respect to
the import of gold into the country. Mr.
Kapur tried to argue that when gold is carried by persons, they often carry
it in this manner in a nouli concealed under trousers. That may well be so.
Here, however, there is an additional circumstance that a pointsman of the
Railway, not expected to have so much gold in his possession, was carrying the
gold which was, as already mentioned, in six blocks and 22 bars apart from some
small pieces and one pair of murkees. The total quantity was as much as 286
tolas and 11 annas, that is, about three kilograms. When all these
circumstances are taken together, it is not possible to accept learned
counsel's suggestion that he might be carrying the gold innocently having
purchased it from somebody. In our opinion, the High Court has rightly held
that all the ingredients of the offence under S.167(81) of the Sea Customs Act
have been established...."
The Tribunal furthermore noticed only the last statements made by the
proceedees. The purported subsequent statements, in the light of their earlier
statements, were not taken into consideration.
It had furthermore not taken into consideration in regard to the
connectivity of the gold bars imported, in respect whereof the custom duty had
been paid and the gold bars seized.
We, therefore, do not accept the contention of Mr. Vella Palli that no
question of law had been raised. It was done by the Revenue in its grounds,
stating :
"That the Ld. Tribunal has erred in holding that the finding of the
commissioner is not sustainable because Shri Vijay D. Patel, Prop. of M/s.
Paras Bullion has produced documentary evidence of purchasing 200 bars from
M/s. Riddhisidhi Bullion Ltd., which was received by the said Riddhisidhi
Bullion Ltd. from ABN Amro Bank, Ahmedabad. It is worthwhile to note that the
document was not accompanying the consignment at time of detection by the
police and was produced subsequently at the time of statement of Shri Vijay D.
Patel, on 24-10-1999. The Ld. Tribunal has recorded this finding by stating
reasons that the commissioner and the department has not rejected the letter
dated 12.11.1999 of the ABN Amro Bank certifying "Credit Suisse" TT
bars to RBL nor they have alleged that RBL has given false/fabricated delivery
challans/invoices to the noticees.
It is respectfully submitted that the Ld. Tribunal has recorded the above
finding without any material or evidence on record and without even looking
into the content of the letter dated 12.11.1999 of the ABN Amro Bank. It is
submitted that the bank's letter referred to invoices dated 25.10.1999 and in
such circumstances the question of effecting delivery by the bank to the
authorized dealer under delivery challan dated 23.10.1999 which is two days
prior to the date of invoice is not credit worthy. It is also against normal
trade practice and makes the transaction suspect. Further, a bare glance at the
documents of the bank undoubtedly establishes that the stock of FM GB shown in
the delivery challan does not establish that the said challan relates to the
gold pieces seized under panchnama dated 28/29.10.1999. It is submitted that no
convincing record/ evidence is led before the competent authority that the 200
seized pieces of gold bars are clearly linked/part (including the same brand
name) of the stock shown in the aforesaid delivery challans and invoices. Thus,
a vital link of sale transaction of the seized gold is not fully established.
It is the duty of the person purchasing foreign mark gold bars to see that the
correct description of the goods is entered in the respective challans"
The aforementioned letter dated 12.11.1999 issued by the ABN AMRO Bank was
the main fulcrum of the reasonings of the Tribunal. It was, therefore, in our
considered view, required to be considered at some details. Even the error of
law committed by the Tribunal in relying upon the trade practices had expressly
been taken by the Revenue, stating :
"The Ld. Tribunal has erroneously held that the proven practice of
sales in gold/bullion market lead to finding that there is nothing amiss in
invoices being written/prepared with or without brand marks, subsequent to
sales and deliveries and thus the penalty as arrived on the Shri Satishbhai A.
Patel is to be set aside.
It is submitted that Shri Satishbhai A. Patel has also actively concerned
himself in abetting the smuggling of the seized gold as no prudent buyer or
seller will buy or sell such a huge quantity of gold without mentioning
individual mark or details."
Similarly, in regard to the fact of non-payment of consideration had been
raised by the Revenue in its grounds.
In regard to the purported retracted statements, the Commissioner dealt with
the matter elaborately, opining :
"....The retractions are in the form of two separate (almost identical)
letters both dated 29.10.99 from Shri Shailesh R. Patel and Shri Vijay D. Patel
wherein they have merely stated that their statements were taken forcibly. They
also said that the Police and the Customs Officers had illegally detained them
in "their own premises". Similarly, telegrams have been received on
29.10.99 from other Noticees alleging wrongful confinement by the Police &
Customs officers........
* * * * It is observed that all these retractions are belated, i.e.
after 6 days, during which the investigations had been carried out. The
Noticees or their family members could have sought the intervention of the senior
officers of the department during this period i.e. 23.10.99 to 28.10.99 if
there was any truth in their allegations of wrongful confinement or detention.
This has not been done.
Moreover, they have not produced any evidence to support that any physical
or mental torture was inflicted on them.
The CEGAT in their decision in the case of P.
Pratap Rao Sait versus Collector of Customs, Cochin reported at 1988 (33)
ELT 433 (Trib.) had held that:
"The detailed statement before Customs officers prima facie merits
acceptance and by mere retraction, the original statement does not lose all
evidentiary value."
Since the retractions are made belatedly and without any supporting
evidences, these have no evidentiary value in the eyes of law."
It was furthermore held by the Tribunal that the bills had been prepared
subsequently.
The learned Commissioner had opined that their existed serious discrepancies
in the bills or vouchers. The Tribunal, in our opinion, should have dealt with
the aforementioned findings of the Commissioner.
Mr. Vella Palli has strongly relied upon Meenakshi Mills, Madurai vs. The
Commissioner of Income Tax, Madras [1956 SCR 691], wherein it was held :
".....On these facts, the Tribunal came to the conclusion that the
contentions of the Department had been fully established, namely, that the
intermediaries were dummies brought into existence by the appellant for
concealing its profits, that the sales standing in their names were sham and
fictitious, and that the profits ostensibly earned by them on those
transactions were, in fact, earned by the appellant, and should be added to the
amounts shown as profits in its accounts. The point for decision is whether
there arises out of the order of the Tribunal any question which can be the
subject of reference under section 66(1) of the Act. Under that section, it is
only a question of law that can be referred for decision of the court, and it
is impossible to argue that the conclusion of the Tribunal is anything but one
of fact."
There is no dispute as regards the proposition of law but, as noticed
hereinbefore, same question of law did arise for consideration of the High
Court.
For the reasons aforementioned, we are of the opinion that the High Court
may not be entirely correct in holding that no substantial question of law
arise for its consideration. Ordinarily, although, we have referred the matters
back to the High Court, having regard to the fact that we have ourselves
examined the findings of the Tribunal and the findings of the Commissioner, we
are of the opinion that instead of remitting the matter back, interest of
justice would be met if upon setting aside the judgment of the High Court and
Tribunal the matters are remitted to the latter for considering them afresh.
The parties shall be entitled to raise their respective contentions before the
Tribunal. We intend to make it clear that our reference to the findings of the
Commissioner as also the Tribunal was made only for the purpose of considering
as to whether any substantial question of law arose for consideration before
the High Court and for no other purpose. We may not therefore be understood to
arrive at any finding in regard to any question which would arise for the
consideration of the Tribunal.
For the reasons aforementioned, the appeals are allowed. The impugned
judgments of the High Court as well as the order of the Tribunal are set aside.
The matter is remitted to the Tribunal for consideration thereof afresh.
Back
Pages: 1 2