2007 (7) TMI 191 - HC - Customs

Foreign marked gold biscuits, foreign & Indian Currency found during search was seized & confiscated - explanation offered by petitioner in respect of confiscated articles was examined in detail & was found unacceptable burden not discharged by assessee to prove goods were not smuggled Comm(A) & Tribunal order is justified who have recorded their findings on appreciation of all materials & evidence on record Superintendent being a gazetted officer has power to search petition dismissed

Issues Involved:
1. Legality of the seizure memo dated 18/12/1993.
2. Validity of the confiscation order by the Commissioner Customs & Central Excise dated 27/30.10.1995.
3. Legality of the order by the Customs, Excise and Gold (Control) Appellate Tribunal dated 26/12/1997.
4. Authority of the Superintendent of Customs to conduct the search.
5. Admissibility and voluntariness of the statement recorded under Section 108 of the Customs Act.
6. Validity of the retraction of the statement by the petitioner.
7. Justification for the confiscation of Indian currency and foreign currency.
8. Reasonableness of the belief under Sections 105 and 123 of the Customs Act.

Detailed Analysis:

1. Legality of the Seizure Memo:
The seizure memo dated 18/12/1993 was challenged by the petitioner on the grounds that the search was conducted without proper authorization. The court found that the Superintendent of Customs, being a gazetted officer, was authorized under the notification dated 31/1/1970 to conduct the search. The search yielded positive results, including eight foreign-marked gold biscuits, foreign currency, and Indian currency worth Rs.11,10,000/-. The court upheld the legality of the seizure.

2. Validity of the Confiscation Order by the Commissioner:
The confiscation order dated 27/30.10.1995 was upheld by the Tribunal and subsequently challenged in this writ petition. The court found that the Commissioner had based his order on a correct appreciation of facts and evidence, including the statement of the petitioner and other materials on record. The confiscation of the gold biscuits, foreign currency, and Indian currency was justified under Sections 111(b), 111(d), and 119(1) of the Customs Act.

3. Legality of the Tribunal's Order:
The Tribunal's order dated 26/12/1997, which upheld the Commissioner's order, was challenged. The court found that the Tribunal had correctly analyzed the evidence and the law. The Tribunal's decision to dismiss the appeal was based on a thorough examination of the facts and circumstances, and it did not suffer from any legal infirmity.

4. Authority of the Superintendent of Customs:
The petitioner argued that the Superintendent of Customs was not authorized to conduct the search. The court referred to the notification dated 31/1/1970, which authorized gazetted officers of the Customs Department to conduct searches under Section 105 of the Act. The court found that the Superintendent was duly authorized and the search was valid.

5. Admissibility and Voluntariness of the Statement:
The petitioner contended that his statement recorded under Section 108 of the Customs Act was obtained under duress and was not voluntary. The court found no material evidence to support the claim of duress. The statement was considered valid and voluntary, and the court held that a custom officer is not a police officer within the meaning of Section 24 of the Evidence Act. The statement was admissible in evidence.

6. Validity of the Retraction:
The petitioner retracted his statement on 20/12/1993, alleging it was made under duress. The court noted that the retraction letter was received belatedly on 6/1/1994, and there was no contemporaneous evidence to support the claim of duress. The court found the retraction to be an afterthought and upheld the original statement recorded under Section 108 of the Act.

7. Justification for the Confiscation of Indian Currency and Foreign Currency:
The petitioner argued that the Indian currency was related to his business of exchanging mutilated currency notes and not from smuggling activities. The court found that the petitioner failed to provide a satisfactory explanation for the possession of the seized currency. The confiscation of the Indian currency under Section 121 of the Act was justified. The foreign currency was also confiscated as the petitioner could not prove its lawful acquisition.

8. Reasonableness of the Belief under Sections 105 and 123:
The petitioner challenged the reasonableness of the belief held by the customs officials for conducting the search and seizure. The court held that the belief was substantiated by the positive results of the search. The court referred to the judgment in State of Maharashtra Vs. Natwarlal Damodardas Soni, which held that even an illegal search does not affect the validity of the seizure. The court found that the customs officials had reasonable grounds to believe that the goods were smuggled.

Conclusion:
The court dismissed the writ petition, upholding the legality of the seizure memo, the confiscation order by the Commissioner, and the order by the Tribunal. The court found no merit in the arguments presented by the petitioner and concluded that the actions of the customs officials were justified and in accordance with the law.

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