9911796707
TMI Blog1991 (7) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... t order an amount of Rs. 40,000.00 which was also seized in this case along with the confiscated amount of Rs. 71,000.00 was returned on the ground that they were covered by the Gift Certificates representing as gifts made to the minor daughter of Shri Sajjan Kumar Poddar, Shrimati Nirmala Poddar. 2. The appellants have filed the above appeals against the confiscation order of the diamonds and the wrist watches as these appellants above-captioned have claimed these diamonds. As per their claims they have also claimed the wrist watches. The appellants S/Shri Sajjan Kumar Poddar and Suresh Kumar Poddar - have also challenged the legality of the order imposing penalties on them under Section 112 of the Customs Act, 1962. 3. The brief facts of the case as per the Department reveal that pursuant to an information and on the strength of a Search Warrant a batch of Customs Officers went to search the residential premises of Shri Sajjan Kumar Poddar at 19, Balmukund Macker Road, Calcutta-700 007 at 9.15 A.M. on 4-11-1985. It was stated that they were obstructed in entering into the premises and the matter was reported to the Jora Sako Police Station and the Police Officers came to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Search List was prepared on the spot mentioning the recovered goods in the presence of two independent witnesses and Shri Sajjan Kumar Poddar and copy of the same was handed over to Shri Poddar under receipt. 5. A show cause notice was issued on 1-5-1986 to S/Shri Sajjan Kumar Poddar, Suresh Kumar Poddar and the other appellants who claimed some of these diamonds as theirs and they were all called upon to show cause to the Collector (Preventive), West Bengal, Calcutta as to why the goods under seizure i.e. diamonds, wrist watches and other miscellaneous items should not be confiscated under Section 111(d) of the Customs Act, 1962 and secondly as to why the Indian Currency of Rs. 1,11,000.00 seized should not be confiscated under Section 121 of the Customs Act, 1962. They were also required to show cause as to why a penalty should not be imposed on them under Section 112 of the Customs Act, 1962. 6. The appellants filed their reply to the show cause notice and they claimed diamonds also as belonging to several of these appellants. They also stated that the currency seized in this case belongs to them and they are not sales proceeds of the smuggled goods. Thereafter, personal he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Sajjan Kumar that they were given by his father to him and that he had no legal documents to show the importation and possession of the same has to be accepted and therefore, on this ground the Adjudicating Officer discarded the documents without discussing the same. In this connection, the learned Counsels contended before us that the whole proceedings adopted was not in accordance with law. They further contended that all these bills and vouchers produced by the appellants should have been examined thoroughly and thereafter, a conclusion should have been reached and they could not have been ignored merely on the fact that they were not mentioned by Sajjan Kumar Poddar when he tendered the first statement. It was also brought to our notice that in pursuance of the documents produced by the appellants, the Department had carried out investigations and some reports were also received by the Department in this connection as would be evident from the recital made in the snow cause notice. They also contended that with respect to some diamonds the investigations were still going on and without waiting for the result of the investigations the Adjudication Order was passed. It was, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ota of evidence in this behalf and therefore, that contended that merely on suspicion the same cannot be confiscated. In support of their contentions they have relied on the following decisions: (1) 1988 (33) E.L.T. 444. (2) 1988 (38) E.L.T. 636 - Lalith Kumar Others v. Collector of Customs. 11. It was, further, contended before us that the Adjudication order had gone beyond the show cause notice. It was contended that in the show cause notice it was mentioned by the authorities that the goods are liable for confiscation in view of the fact that the value given to this case by the appellants do not tally with the values given by the Departmental Officers. But this ground was given a go-by in the adjudication order and the same were confiscated on different ground. Therefore, to that extent the order is bad in law. Accordingly, they contended that the order is liable to be set aside. In this connection, they relied on the following decisions : (1) 1984 (17) E.L.T. 294 (2) 1987 (32) E.L.T. 216. 12. The learned SDR, Shri M.N. Biswas replying to the above-said contention stated that there was reasonable belief in the minds of the officers to seize the goods in question. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement Shri Biswas contended that the further documents and claims made by the other parties are only afterthoughts. It was, therefore, contended before us that the conclusion arrived at by the learned Adjudicating Authority is in accordance with law. Shri Biswas took us through the relevant portion of the orders of the learned Adjudicating Officer. It was stated in the order that on 4-11-1985 Shri Sajjan Kumar Poddar stated that these diamonds were given to him by his father. But he could not submit any document for importation, possession or acquisition. But Rukmini Devi Poddar claimed the two pieces of diamonds in question on 8-11-1985 stating that these diamonds were taken from ear-tops for re-making by Sajjan Kumar in his residence and the said diamonds were given by the mother-in-law of Rukmini Devi Poddar. This story cannot be believed and the burden is not discharged by the appellant in this case. With respect to the diamonds at Serial Nos. 23, 24 and 26 to 29 Shri Biswas contended that the respective parties had claimed these diamonds stating that they were received by a Firm M/s. Sajjan Kumar Co. either in the capacity of the Firm or in the individual capacity of the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the statement he also relied on the decision of the Tribunal reported in 1986 (25) E.L.T. 811 in the case of Jain Enterprises v. Collector of Customs. In the view of the above arguments the following points arise for our determination :- (i) Whether, in the facts and circumstances of the case the Adjudicating Officer was justified in holding that the diamonds and wrist watches found in the possession of the appellants premises were smuggled goods? (ii) Even assuming that Section 123 of the Customs Act, 1962 was applicable to the case and the burden of proof was on the appellants to prove that these diamonds and watches were licitly imported, whether they had discharged this burden in this case? (iii) Whether the confiscation of the amount of Rs. 71,000.00 under Section 121 of the Customs Act, 1962 is justifiable? (iv) Whether the imposition of the penalty on the appellants S/Shri Sajjan Kumar Poddar and Suresh Kumar Poddar under Section 112 of the Customs Act, 1962 is justified? 14. Point No. (1): We have heard both the sides. In a case like this it is true that reasonable belief that the goods were smuggled, is not a question on which the Court can sit on appeal; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ane, the sufficiency of the material is not open to judicial review." In the decision reported in AIR 1987 SC 1321 in the case of State of Gujarat v. Mohanlal their Lordships of Supreme Court held as follows : (relevant page at 1323) Whether or not the official concerned had seized the article in the reasonable belief that the goods were smuggled goods is not a question on which the Court can sit in appeal. The law to this effect has been declared in no ambiguous terms in Pukhraj v. D.R. Kholi, AIR 1962 SC 1559: (1962) Supp (3) SCR 866. This Court has administered caution to the Courts not to sit in appeal in regard to this question and has observed that if prima facie there are grounds to justify the belief the Courts have to accept the officer s belief regardless of the fact whether the Court of its own might or might not have entertained the same belief. The law declared by this Court is binding to the High Court and it was not open to the High Court to do exactly what it was cautioned against by this Court. Section 123 of the Act does not admit of any other construction. Whether or not the officer concerned had entertained reasonable belief under the circumstances is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows : 58. The second reason for entertaining a reasonable belief is that the seized goods were not accounted for by the petitioner on 15-2-1967 when the officer seized the goods from his possession. The seized goods consisted of 20 items of ornaments and diamonds. Out of these six items were released before the show cause notice was issued. One item was released at the adjudication stage. Six items were released by the Board on appeal. Only 7 Items have been confiscated. These consist of 2 packets of diamonds and 5 ornaments. The petitioner claimed that they belonged to the queen mother of Nepal. A letter was written to queen mother. On her behalf a reply was received that she had given certain ornaments to the petitioner for polishing, remaking etc. though not for sale. But this was done later on. The letter was written on 3-7-1967. The reply was received on 24-7-1967. But at the time of seizure all that the officer had before him were 2 packets of diamonds and 5 ornaments. Neither the diamonds nor the ornaments had any foreign markings or label to suggest to the customs that these were smuggled goods. In the search list these two packets of diamonds are described as appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t itself, they had described the diamonds in question as - appearing to be diamonds. This clearly goes to show that the Departmental Officers were not so sure as to what they seized were diamonds. If they had come to the conclusion at the time of seizure that these were diamonds they would have described the same as diamonds. But in the seizure list they were described as stones appearing to be diamonds. It is, thus, clear that there were no circumstances in this case to show prima facie that they had the reasonable belief that these are smuggled goods when they seized the same. Thirdly, it was contended that Sajjan Kumar Poddar obstructed the officers from entering into the premises. But the search authorisation was in the name of Shri Suresh Kumar Poddar. In such circumstances, if Sajjan Kumar Poddar had obstructed the Departmental Officers, that is not a circumstances to come to a reasonable belief that these goods are smuggled goods. That may be an offence under the Indian Penal Code (Section 353) and it is the case of the Department that a criminal case is filed in this behalf. The premises is a Four Storeyed Building having a number of tenants. Shri Suresh Kumar Poddar and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as is described in Section 24 of the Evidence Act, it must fall and with it fall the other heads of evidence, leaving no material to support the conviction. As it is, we find that the appellant has been able to prove the existence of circumstances which make it highly probable that his confession is hit by the mandate in Section 24 above-mentioned. Our reasons for coming to this conclusion follow. and Taking note of these circumstances we would consider it extremely unsafe to regard the confession; exhibit Z-383 signed by the appellant as having been made by him voluntarily and therefore, trustworthy. The appellant, in our opinion, has shown the existence of circumstances which make it appear to the Court that the confession may well have been obtained in a manner which would bring it within the ambit of Section 24 of the Evidence Act, it being undisputed that the concerned officers of the Department of Customs were persons in authority within the meaning of that expression as used in the section. Applying the above findings to the facts of this case the appellants had pleaded that the statement was obtained under force. They had mentioned the same in their applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant had no documents to show the licit importation and his father gave the same to him. Thereafter, the other appellants had claimed the diamonds and in this behalf an enquiry was also conducted. The Department had investigated the case. But the claims of the other appellants were thrown out merely on the ground that Sajjan Kumar Poddar in his initial statement had stated that his father had given the diamonds to him. In this connection, the learned Counsel, Shri S.K. Roy relied on the decision reported in 1990 (49) E.L.T. 494 in the case of Collector of Customs v. Ramesh Chand. The relevant para is as follows :- 4.1 have carefully considered the pleas advanced on both sides. If is observed that the respondent had brought on record certain purchase bills in support of his licit acquisition of the goods. If all such evidence subsequently brought on record by the accused person is to be discarded by the Adjudicating Authorities, without verifying the authenticity of such evidence or giving an opportunity to the accused to prove it and the Adjudicating Authority is merely to rely on the spot statement then the very purpose of adjudication is lost. The entire evidence on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal held that the non-production of the report in Court makes it permissible to draw an adverse inference, namely that the said report is not supporting the basis of assessment made by the Customs Authorities. The learned Counsel further relied on the decision reported in 1988 (33) E.L.T. 66 (Delhi) and contended that the non-discussion of the enquiry report goes to show that the report was not favourable to the Department s case. Shri Sajjan Kumar Poddar in his application dated 13-11-1985 had stated that all the seized items are of Indian Origin. Shri Birendra Kumar Bothra had claimed one diamond weighing 12.40 cts. and Shri Dahyalal K. Dani, had claimed another diamond weighing 2.64 cts. Shri Birendra Kumar Bothra had claimed the diamond at Serial No. 23. He stated in his application dated 13-11-1985 that the nine pieces of diamonds were from 10 pcs. of diamonds weighing 16.19 cts. which he purchased from M/s. Pravinchandra Co., No. 1203/A, Panchratna Bldg., Mama Parmanand Marg, Opera House, Bombay-400 004 on 30-10-1985 and at page 64 of the paper-book of Sajjan Kumar Poddar there is an approval memo addressed by Shri Birendra Kumar Bothra stating that those nine pieces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given the diamond in question to M/s. K. Hemant Kumar Co. on approval basis. The said Company had purchased one piece rough diamond in question weighing 15.69 cts. from M/s. S.J. Shah Co., Surat vide their Invoice No. P.36/85-86 dated 30-8-1985 and this record was also produced by the appellants before the Adjudicating Authority. No reasons are furnished to disbelieve the same. When an enquiry was conducted with respect to this document and when an investigation was made by the Department, this document should not have been disbelieved without assigning any reasons in this regard. Therefore, with respect to the Item No. 26 the appellants have discharged their burden. As far as Item No. 27 is concerned, Shri Birendra Kumar Bothra had claimed the same. The same weighs 2.42 cts. He had made an application before the Assistant Collector concerned claiming this one piece diamond producing the approval memo dated 2-11-1985, through which the same was given to Sajjan Kumar Poddar. Shri Bothra had also produced the bill from M/s. Pravinchandra Co. for having purchased the ten pieces of diamonds weighing 16.19 cts. and in support of this Bill Shri Bothra claimed the said one piece of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In such circumstances, as per point No. (2) we hold that appellants had discharged the burden with respect to the diamonds in question and that there was no reasonable belief to seize these wrist watches as there were no prima facie materials in this regard before the Seizing Officers justifying the seizure of the same. 16. Point No. (3) : As far as the third point is concerned we have find as to whether the confiscation of the Indian Currency of Rs. 71,000.00 is in accordance with law. In this connection, the learned Counsels, Shri Roy and Shri Bagaria invited our attention to the decision reported in 1988 (33) E.L.T. 444 in the case of Malar v. Collector of Customs Central Excise, Tiruchy. In that case the Tribunal held that mere possession of currency and an unsatisfactory explanation with reference to acquisition of the same may possibly create suspicion in the mind of an authority. But suspicion however grave it might be, cannot take the place of proof. They also relied on the decision of Tribunal reported in 1988 (38) E.L.T. 636 (Tri.) in the case of Lalith Kumar Others v. Collector of Customs in which the Tribunal held that the proceedings under the Customs Act being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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