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TMI Blog1998 (7) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... et of foreign currency in the form of US $ from his right hand pant pocket. On detail examination, it was found to contain 275 notes of 100 denomination and 110 notes of 50 denomination equivalent to Indian Rs. 9,70,000 (MV), which was seized under the provisions of Customs Act and FERA 1973 under the Panchnama dated 5-8-1991. The statements of the Appellant Mangilal Jain and Shantilal Magana Lal Jain was recorded under section 108 of the Customs Act. Based on the investigation conducted, show cause notice was issued on 28-10-1991 to the Appellant Mangilal Jain, Abdul Khalique and Prabhakar Rao calling upon them to explain as to why this the seized currency and the Bajaj scooter MMZ 2269 should not be confiscated and why personal penalty should not be imposed upon them under the Customs Act. The Appellant submitted his reply on 3-12-1991 and Mangilal Jain replied on 12-12-1991. The personal hearing was held and the parties were heard through their advocate. The Addl. Collr. of Customs (P) R I Divn. Bombay, after considering the material placed before him passed the order in original on 31-3-1993 ordering of the confiscation of the seized US $ under Section 111(d) and 121 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Prabhakar Rao might have acquired it legally. Confiscation under Section 111(d) and 121 of the Customs Act is not proper. Both cannot apply. The order in appeal goes beyond the show cause notice and the order in original Rajput has signed the panchnama and nobody refers to him. The order in original is not properly considered and dealt with, but is only repeated in order-in-appeal. 4. Shri S.V. Singh, the learned DR has argued that the panchnama establishes the recovery of the currency note from the Appellant. One of the panchas is the watchman and his affidavit is not filed by the Appellant in support of his case. Regarding the retraction, nothing is established by the Appellant. As per para 8 of the show cause notice, the currency is both sale proceeds and imported, as no legal possession is shown by the Appellant. The penalty imposed is quite normal looking to the value of the goods. In the course of the reply, it is submitted that there is no finding on the request of the Appellant for the cross examination of the panchas and other witnesses. 5. The point for consideration is whether there are sufficient and satisfactory grounds to set aside the orders of the lower auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay, and was selling the same in exchange of the foreign currency to his different customers, and get back the sale proceedings thereof in foreign exchange to the said foreigners. From the records placed in this case, it is seen that the department has not tried to establish this aspect of the case. The intelligence was also received that on 5-8-1991 between 5 to 5.30 p.m., the Appellant would pass towards Metro Theatre from his shop on his scooter, Registration No. MMZ 2269 with 20 foreign marked gold bars, or it s sale proceeds in foreign currency. This has resulted with the interception of the Appellant and the seizure of 33000 US $ in 385 notes of the denomination of 50 $ and 100 $ concealed in his right hand side pant pocket. The Appellant, on enquiry, has informed the DRI officers. He was intercepted in a public place, but nothing was done, but taken to the office, 2 panchas were secured and searched and nothing was found in the scooter, and the personal search of the Appellant the above material was found. Nothing incriminating was noticed in the shop premises of the Appellant M/s. Sharda Electronics Stores situated at Vaju Kotak Marg, Fort. It appears that the whole cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re kept in abeyance against them. This confines only against the Appellant. So it is found by the department that 33,000 $ are the sale proceeds of the foreign marked gold. There is nowhere alleged that the said gold was smuggled into India even by Abdul Khalique. No presumption as such can arise in a case of this nature when the gold is not seized. The appellant was running an Electronics stores at the relevant point of time. It is not the case of the department that he is either a goldsmith or a gold dealer. To substantiate the allegation against the Appellant about the specific information received to charge in an offense of dealing in foreign marked gold biscuits and foreign currency on a large scale by the Appellant there are no instances of the Appellant doing the same with any other customers. The specific information so received is not substantiated. How reasonable belief was entertained on such information is also not made clear. 8. Panchnama dated 5-8-1991 drawn at 6.30 p.m. is in English. It has come in the evidence that one of the panchas is the watchman of the building. On perusal of the panchnama as it is seen that except the IO Shri Shaikh and IO D.K. Savekar the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to endorse and sign the said statement. He disowns the same, and retracts it, and he has sought for copy of the statement said to have been recorded. From the argument, it is seen that the said letter of the Appellant is not replied by the department. So from the above, it is clear that the effect of the statement of the Appellant under Section 108 of the Customs Act is diluted by this retraction of the Appellant, which is made, when he was in the custody of the court. As contended by the Appellant there is no reason to reject this conduct of the Appellant in the light of the discussion made above. The department has not tried to make out the case of smuggled gold coming to the hands of the Appellant. The peculiarity in the sale proceeds of the said deal in the huge quantity of the foreign currency does not look to be normal transaction. It is not explained by the department how such a thing could happen. The alternative stand of the department under the FERA as per the panchnama is given up in the course of the adjudication proceedings under the order in original. It is discussed in para 4 of Collector s order in page 2. According to it, currency was not allowed to be imported, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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