9911796707
TMI Blog1997 (12) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... o paper slips were also recovered. Some incriminating documents were recovered and seized. Shri Ramesh Khatnani, on demand, could not produce any documentary or other evidence to legally possess, acquire and control the recovered foreign marked Gold Biscuits and foreign currencies. Therefore, the same were seized in the reasonable belief that they were liable to confiscation. In the search of the residential premises of Shri Ramesh Khatnani, Indian currency of Rs. 11,10,000/- was recovered from a cavity in an almirah. Three jackets of white cloth were also recovered which appeared to have been used for carrying, keeping and concealing foreign marked gold biscuits from a washing machine which was kept in the bathroom. Shri Ashok Khatnani, brother of Shri Ramesh Khatnani could not produce any evidence for legal possession, custody or control of the recovered Indian currency or explain the presence of the jackets. The same were seized in the reasonable belief that they were sale proceeds of smuggled goods and were liable to confiscation. 3. Shri Ramesh Khatnani in his statement recorded on 19-12-1993 stated that he was engaged in the business of changing mutilated currency notes; th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated to his business; that the seized jackets had been used for carrying/concealing foreign marked gold biscuits. 5. Shri Ashok Khatnani in his statement recorded on 18-12-1993 stated that Indian currency of Rs. 11,10,000/- and the three jackets were recovered from the room occupied by his brother, Shri Ramesh Khatnani; that the seized Indian currency belonged to Shri Ramesh Khatnani; that the source of procurement of the Indian currency could be furnished by Shri Ramesh Khatnani. Statement of Shri Laxman Das S/o Narain Das, employee of Shri Ramesh Khatnani was also recorded on 20-12-1993 who stated that he had been working with Shri Ramesh Khatnani for the last six months on a monthly salary of Rs. 750/-. He stated that Shri Ramesh Khatnani used to do the business of foreign marked gold biscuits and foreign currency for which the inner room of the business premises was used by him. 6. Shri Ramesh Khatnani was arrested on 19-12-1993 and produced before the Special Magistrate who remanded him to judicial custody. 7. Accordingly, a Show Cause Notice was issued to the appellants asking them to explain as to why the seized gold biscuits, foreign currencies, Indian currency, 3 ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... custody of Customs officers from 18-12-1993; that no summons were issued; that the purported statement under Section 108 was not a statement under Section 108 as no summons were issued; that the statement was not true and voluntary; that the statement was obtained under duress; that the statement was not recorded in the handwriting of the appellant. 9. About the statement of Shri Ashok Khatnani, it was argued by the appellants that there was nothing in the statement of Shri Ashok Khatnani to prove that the Indian currency was the sale proceeds of any smuggled gold and therefore the seizure of Indian currency was illegal. So also were arguments adduced against seizure of documents and jackets. After careful consideration of the submissions made, 8 gold biscuits were confiscated absolutely, 1,067 US Dollars and 15 Singapore Dollars were also confiscated; Indian Currency of Rs. 11,10,000/- was confiscated; 3 jackets, wooden chowkie, the pant was also confiscated and penalty of Rs. 20,000/- was imposed on Shri Ramesh Khatnani and Rs. 10,000/- on Shri Ashok Khatnani. 10. Appearing for the Appellants, Shri K.K. Anand and Shri D.K. Rana, the ld. Advocates, submitted that Shri Ramesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khatnani, the appellant in the instant case. They submitted that an affidavit was filed by Shri Ashok Suri of M/s. Ashish Jewellers claiming the 8 gold biscuits. It was argued that there was entry of these gold biscuits in the records of M/s. Ashish Jewellers and Shri Ramesh Khatnani; that the records also showed that M/s. Ashish Jewellers had similarly given gold to Shri Ramesh Khatnani for making kundan jewellery. 12. On the question of recovery of Indian currency of Rs. 11,10,000/-, the ld. Counsel submitted that Shri Ramesh Khatnani was an Income Tax Payer and was submitting his IT returns from time to time and that he was maintaining detailed accounts of the business transactions in respect of torn currency notes, PCO and Jewellery. The ld. Counsel submitted that his ledgers showed that he had sufficient cash balance with him and that this cash balance was shown in his IT returns for the relevant period which was submitted much before the date of seizure. He submitted that Rs. 11,10,000/- were his genuine business cash including his profit over the years; that nothing has been brought on record to prove that this was the sale proceeds of smuggled goods. He submitted that eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not arise. 16. About seizure of the jackets, the ld. Counsels submitted that no evidence has been brought on record to prove that the jackets were made specially for concealing/carrying gold nor an expert opinion has been brought on record. The ld. Counsel submitted that the appellant was illegally kept in custody for a long time and the statement was recorded under duress; that he was tortured to such an extent that the Customs had to call for a Doctor; that the statement obtained was not voluntary nor true and was retracted as soon as an opportunity was available and, hence, cannot be treated as an independent evidence. 17. The ld. Counsel also submitted that a public notice was issued by the Import Trade Control Authorities under ITC Order No. 83/90-93, dated 29-2-1992 wherein it was specifically stated that (d) there will be no restriction on sale of such imported gold. The ld. Counsel also submitted that since there was no restriction on sale of the gold imported by passengers as baggage and since the gold in question was covered by the baggage receipts which was found to be genuine, therefore, the sale was legal and was accounted for properly. 18. On foreign currency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble time and the date, 20-12-1993 is not the correct date on which this letter was written by Shri Ramesh Khatnani. He submitted that there was nothing in the Bail Application about the statement retracted and thus, the letter dated 20-12-1993 is a back dated letter. 22. On the question of the search and seizure being illegal, the ld. SDR submitted that the search was result of information. The goods were recovered from cavities where they were concealed; that foreign currency was recovered partly from a cavity in the Chowkie and partly from the pockets of the pant worn by Shri Ramesh Khatnani; that this clearly proved that the statement of Shri Wadhwani was wrong and given only to protect Shri Ramesh Khatnani. He submitted that since there was information and on the basis of that information, search authorisation was given, therefore, there was reasonable belief. This reasonable belief was confirmed by recovery of gold biscuits and foreign currency as also Indian currency. He submitted, therefore, that reasonable belief existed at the time of search and since there was reasonable belief, therefore, the seizure was justified. The ld. DR submitted that Shri Tikam- chand, one of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27. The ld. DR submitted that the defence put forth by the appellants is full of abnormal things inasmuch as Shri K.N. Babu, instead of sending the affidavit to the Collector or to the Seizing Officers, sent the affidavit claiming ownership of the gold biscuits to the Court. Similarly, M/s. Ashish Jewellers also sent the affidavit to the Court instead of sending it to the Seizing Officers or the Collector concerned. The ld. SDR submitted that with the letter dated 20-12-1993, the appellant did not send any documents, affidavits, baggage receipt etc. The ld. DR also referred to the observations of the Rajasthan High Court on the bail application of the appellant. 28. About the keeping for safe custody of 1,067 US Dollars and 15 Singapore Dollars, the ld. DR submitted that the entire story is far from truth inasmuch as Shri Wadhwani was having a joint account with his brother in India; that he had come to India in August, 1993 while the seizure was on 18-12-1993; that Singapore currency normally will not be carried by persons coming from Abu Dhabi; that even when currency was kept in safe custody, it should have been found at one place. The ld. SDR submitted that 1,000 US Dollars w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to the existence of the fact sought to be proved. The ld. DR submitted that under Section 123 of the Customs Act, 1962, burden of proof in certain cases where any goods to which Section 123 applies, are seized under the Act in the reasonable belief that they are smuggled goods, the burden of proof that they are not smuggled goods shall be (a) in a case where such seizure is made from the possession of any person (i) on the person from whose possession the goods were seized and (ii) if any person other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any who claimed to be the owner of the goods so seized. (2) This section shall apply to Gold, Diamonds, Manufacturers of Gold or Diamonds and any other class of goods which the Central Government may by notification in the Official Gazette specify. 33. The ld. DR also referred to the decision of the Apex Court in the case of the State of Maharashtra v. Natwarlal Damodar Das Soni, [1983 (13) E.L.T. 1620] wherein the Apex Court held that even if the search was illegal, it will not vitiate the seizure of the artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that no evidence has been placed on record as to how the figures were decoded and the inferences were drawn that Shri Ramesh Khatnani was indulging in all transactions of smuggled foreign marked gold biscuits. He submitted that the entire case is built on presumptions and surmises without any base whatsoever. The ld. Counsel submitted that Surjit Singh s case was not applicable to the facts of the present case; that the observations of the honourable Rajasthan High Court were not relevant as they were not proved after the trial court verdict. The ld. Counsel also submitted that the appellant has been acquitted by the Trial Court. The ld. Counsel also submitted that though Shri Suri has not filed any appeal and on the facts stated, he will get the benefit and referred to the judgment of the honourable Orissa High Court in the case of M/s. Basant Bharati v. State of Orissa [1997 CLJ 2762] and also to para 6 of the judgment in AIR 1988 SC 345. 36. The ld. Counsel also submitted that in the case of M/s. R.P. Industries v. Collector of Customs [1996 (82) E.L.T. 129], this Tribunal held that documentary evidence has to be preferred as against some oral versions given before the inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at an illegal search. For coming to this conclusion, the Apex Court followed its earlier decisions [1963 Suppl. I SCR 408; AIR 1972 SC 885; AIR 1978 SC 933. We also note that the Kerala High Court in the case of Asstt. Collector of CE v. Wilfred Sebastian and Others [1983 (12) E.L.T. 122], following the ratio of the Apex Court s judgment mentioned above, held that It is well settled that illegality of search will not affect the validity of the seizure of the goods. Nor it vitiates the recovery of the articles or the subsequent trial . Having regard to the ratio of the above decisions, we hold that even if the search was illegal, the seizure of the foreign marked gold biscuits, foreign currency and Indian currency is not vitiated and can be adjudicated upon after investigating. 41. Another point that was agitated before us was that confiscated gold biscuits were legally imported. On careful consideration of the various submissions made before us by both sides on this point, we note that the gold biscuits, according to the appellants, belonged to Shri K.N. Babu who had given them to M/s. Ashish Jewellers, who in turn, had given them to Shri Ramesh Khatnani. We note that when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove that Shri Ramesh Khatnani was dealing in smuggled gold biscuits and the recovery of Indian Currency is the sale proceeds of smuggled goods. For coming to this conclusion, we have taken into consideration the submissions made by both sides and the case law cited as also the evidence available on record. 44. On the point that gold biscuits were covered by the baggage receipt produced by the appellant, we note that the baggage receipt only related to import of some gold biscuits by one Shri K.N. Babu, but the subsequent delivery of the said gold biscuits first to M/s. Ashish Jewellers and, later to Shri Ramesh Khatnani is not plausibly explained because of the time lag between the date of import of the gold biscuits, their delivery to M/s. Ashish Jewellers and then to Shri Ramesh Khatnani. This is further supported by the fact that Shri Ramesh Khatnani was not a Jeweller nor is there any evidence to show that he was an expert of kundan jewellery. The plausibility of the evidence placed before the authorities and before us was further eroded by the fact that the claim of the gold biscuits was made before the Courts and not before the Customs authorities. Looking to all the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to M/s. Ashish Jewellers and then to Shri Ramesh Khatnani, the appellant. We, therefore, hold that there was no legal infirmity either at the time of seizure of gold biscuits or in the order confiscating the gold biscuits. 48. On the question of retraction of statement and their value as evidence, we note that a lot of case law was cited by both sides on the retracted statements as well as cross-examination of witnesses whose statements were recorded. We note that Shri Ramesh Khatnani had tendered a statement on 19-12-1993. This statement is to be read along with the Panchnama and other records which were examined. We note that Shri Ramesh Khatnani could not explain the acquisition/possession of gold, foreign currencies and Indian currency at the time of recovery of the gold biscuits and foreign currencies and later on about the Indian currency. Recovery from the places and manner of their hiding and silence at the questions asked when these items were recovered indicated that Shri Ramesh Khatnani had nothing with him to show that he had legally acquired/possessed the foreign marked gold biscuits and foreign currencies. His statement corroborates the position in the Panchnama. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the Indian currency was the sale proceeds of the smuggled gold. 51. Confiscation of foreign currencies is also challenged on the ground that Customs has no authority to confiscate the currency. We have perused the defence put forth by the appellants in regard to the U.S. Dollars and Singapore Dollars. We have also perused the allegation in the Show Cause Notice in this regard as also the findings in the Order-in-Original. We are convinced by the evidence led by both sides before us that foreign currency was liable to confiscation under Section 111(d) of the Customs Act. We, accordingly, uphold the confiscation thereof. 52. On the question of cross-examination of the Panch witnesses and Inspector Dhakar, we find from the records that cross-examination of S/Shri Harsh Bahadur, Superintendent and S.N. Sethi, Inspector was allowed. Panch witnesses witnessed the recovery of foreign marked gold biscuits, foreign currencies and Indian currency. Recovery of the goods is not denied. Hence the denial of cross-examination of Panch witnesses has not prejudiced the cause of the appellants. 53. In view of the above findings, we do not see any reason to interfere with the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
