1997 (12) TMI 431 - AT - Customs

Summary

Issues Involved:
1. Legality of the search and seizure.
2. Confiscation of gold biscuits.
3. Confiscation of foreign currencies.
4. Confiscation of Indian currency.
5. Validity of retracted statements.
6. Authority to issue search authorization.
7. Cross-examination of witnesses.
8. Evidence supporting the possession and acquisition of confiscated items.

Detailed Analysis:

1. Legality of the Search and Seizure:
The appellants argued that the search was illegal as it was authorized by a Superintendent, who is not empowered under Section 105 of the Customs Act, 1962. The Tribunal noted that Notification No. 11/70, dated 31-1-1970, authorized a Superintendent to issue search warrants in the absence of his Assistant Commissioner at headquarters. Citing the Supreme Court's decision in the case of State of Maharashtra v. Natwarlal Damodar Das Soni, it was held that even if the search was illegal, it would not vitiate the seizure of the articles or subsequent investigations and trial. Thus, the Tribunal concluded that the search was valid and justified.

2. Confiscation of Gold Biscuits:
The appellants claimed that the gold biscuits were legally imported and belonged to Shri K.N. Babu, who had given them to M/s. Ashish Jewellers, who in turn gave them to Shri Ramesh Khatnani for conversion into Kundan jewellery. However, the Tribunal found no immediate affidavits claiming ownership of the gold biscuits were filed with the seizing Customs Authorities. The Tribunal also noted that Shri Ramesh Khatnani's records did not show any substantial history of undertaking such conversion jobs. The Tribunal held that the baggage receipt did not cover the confiscated gold biscuits and that the appellants failed to discharge the burden of proof under Section 123 of the Customs Act, 1962, which shifts the burden to the appellants to prove that the gold biscuits were legally acquired.

3. Confiscation of Foreign Currencies:
The appellants argued that Customs had no authority to confiscate foreign currency and that the currency was properly accounted for. However, the Tribunal noted that foreign currency was recovered from concealed places, including the pant pocket of Shri Ramesh Khatnani, which indicated illegal possession. The Tribunal upheld the confiscation of foreign currencies under Section 111(d) of the Customs Act, 1962.

4. Confiscation of Indian Currency:
The appellants contended that the Indian currency of Rs. 11,10,000/- was part of their genuine business transactions and was recorded in their Bahi Khata. However, the Tribunal found the records insufficient to prove that the currency was not the sale proceeds of smuggled gold. The Tribunal noted that the known professions of Shri Ramesh Khatnani, such as changing torn notes and running a PCO, did not justify possession of such a large amount of cash. The Tribunal concluded that the Indian currency was indeed the sale proceeds of smuggled gold.

5. Validity of Retracted Statements:
The appellants argued that the statements recorded under Section 108 of the Customs Act, 1962, were not voluntary and were retracted. The Tribunal found that the retraction of the statement dated 20-12-1993 was received on 6-1-1994, casting doubt on its authenticity. The Tribunal held that the retraction was an afterthought and upheld the original statements as credible evidence.

6. Authority to Issue Search Authorization:
The Tribunal upheld the search authorization issued by the Superintendent, citing Notification No. 11/70, dated 31-1-1970, which permits a Superintendent to issue search warrants in the absence of his Assistant Commissioner. The Tribunal also referenced the Supreme Court's ruling that an illegal search does not invalidate subsequent seizures and investigations.

7. Cross-Examination of Witnesses:
The appellants argued that they were denied the opportunity to cross-examine certain witnesses. The Tribunal found that cross-examination of key officers was allowed and that the denial of cross-examination of Panch witnesses did not prejudice the appellants' case. The Tribunal cited the Supreme Court's decision in Surjeet Singh v. Union of India, which held that denial of cross-examination does not amount to denial of natural justice if it does not prejudice the case.

8. Evidence Supporting the Possession and Acquisition of Confiscated Items:
The Tribunal found that the appellants failed to provide plausible and acceptable evidence to support the legal possession and acquisition of the confiscated gold biscuits, foreign currencies, and Indian currency. The Tribunal noted that the appellants' explanations were not convincing and were inconsistent with the evidence on record.

Conclusion:
The Tribunal upheld the confiscation of 8 gold biscuits, 1,067 US Dollars, 15 Singapore Dollars, and Indian currency of Rs. 11,10,000/-. The Tribunal also upheld the penalties imposed on Shri Ramesh Khatnani and Shri Ashok Khatnani. The appeals were rejected, and the impugned order was confirmed.