9911796707
TMI Blog2004 (4) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... m one (c) Dinesh M. Shah and 153.04 cts. from (d) Shri Prakash J. Modi. (b) and (c) above are not the appellants before us. 2. Briefly the facts are that on information the officers of the Customs (Preventive) Collectorate Bombay searched the office/business premises of M/s. Yogesh Diamonds. There are two partners in this firm, Shri Rajeev K. Patel and Shri Karsan K. Patel are the main partners. During the search Rajeev K. Patel and some other persons including their employees S/Shri Dipak B. Upadhaya and Ashok Bendabe were present. A stock taking of the diamonds was done and the Registers maintained in office were verified. The stock of diamonds as appearing in the sock register as on 17-1-91 were as follows : (a) Rough Diamonds Nil (b) Rejected 161.86 cts. (c) Polished 358.40 cts. The actual stock of diamonds was found to be far in excess of these quantities (5,445.08 Cts.). During the search Shri Rajeev K. Patel (RKP) admitted that all entries for transactions up to 17-1-91 were entered in the stock register and no transactions of diamonds had taken place on 18-1-91. Shri R.K.P. could not produce any documents to show how he acquired th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the diamonds and imposed penalties on all the noticees. 5. Heard both the parties. 6. In the appeals before us M/s. Y.D. and others (the appellants) have taken more or less the same pleas which they have taken before the Collector. The main contentions of M/s. Y.D. and its partners are : (a) Seizure is illegal as there was no cause for entertaining a reasonable belief that the diamonds in question are smuggled. (b) There is no evidence excepting retracted statements of the persons in particular one Kamal to establish that the seized diamonds were smuggled into India. (c) Section 123 of the Customs Act does not apply to diamonds. The department failed to produce any reasonable evidence to establish that the diamonds are smuggled and thus failed to discharge the onus cast on them. (d) The respondent seriously erred in stating that the burden under Section 106 of the Evidence Act, is on the appellant to show that the diamonds in question were licitly imported. Provisions of Evidence Act are not applicable in adjudication proceedings. The respondent misconstrued and misapplied the Supreme Court judgments in this regard and failed to appreciate the rati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of each case. For example the factum of information itself may not be a piece of evidence against the appellants, but the factum of actual recovery of the goods based on that information corroborates the factum of information. In Indru Ramchand Bharwani v. UOI [1992 (59) E.L.T. 201 (S.C.)] the Hon ble Supreme Court held that the circumstances under which the officers concerned entertained a reasonable belief have to be judged from his experienced eyes who is well equipped to interpret the circumstances and to form a reasonable belief. The Hon ble Court also held that once it is found that there was material relevant and germane, the sufficiency of material is not open to judicial review. In the present case the officers found that M/s. Y.D. conducts its business from the premises under search. He maintains books of accounts at this place. They found a huge quantity of diamonds unaccounted for. The visit is in Jan., 91 but the chits recovered from the premises indicated that many particulars of diamonds mentioned in the chits were not figuring in the Registers. No satisfactory explanation came from the persons who were in a possession of those diamonds. Under these circumstances c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. These provisions are not absolutely dependent on the provisions of Section 110. A High Court decision in this regard was upheld by the Hon ble Supreme Court in J.K. Bardolia Mills v. Collector [1994 (72) E.L.T. 813]. 12. In the instant case the diamonds are not notified under Section 123 of the Customs Act, and as such the burden of proving that the seized diamonds are not smuggled shall not be on the appellants. According to the appellants the department has not discharged the burden cast on them. Their main contentions have been that there is no evidence excepting retracted statements of some of the persons. The Collector reliance on such statements is illegal. Further the provisions of Section 106 of the Evidence Act, are not applicable as held by Hon ble S.C. in Ambalal s case. They also contended that the Collector ought to have accepted the accounts correlating the seized diamonds with the imported roughs submitted by them instead of holding that the statements/accounts are manipulated. We have gone through these pleadings. In view of what is discussed herein-below we are unable to find fault with the findings of the Collector in this regard. 13. In Surjit Singh Chabra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to establish. The Court observed that the department was simply giving an opportunity to the accused to rebut the first and the foremost presumption that arises out of the tell-tell circumstances in which the goods were found. 15. In para 6 of the Tribunal s decision in Narendra Kumar H. Patel v. CC, Jaipur [1986 (26) E.L.T. 108] the single member observed that in AIR 1966 11 S.C. 1967 (Iswardas case) even though there was no direct evidence of illicit imports as contended for the appellant, there was no material to support the conclusion that the gold was smuggled after restriction on its import had been imposed it was held that it could still be deduced that the goods are smuggled from the credibility of the story of acquisition, the price alleged to have been paid, the contact of the person from whom the contraband was seized. According to the Tribunal in the above cited decision These were relevant pieces of evidence which bore on the question regarding the character of the gold-whether it was licit or illicit. In Ishwardas s case cited the supra gold was not notified under Section 178A of the Sea Customs Act. 16. In 1983 (13) E.L.T. 1486 (S.C.) = AIR 1972 S.C. 2136 [Kanung ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the records/documents of the firm were manipulated subsequent to the raid. These manipulations are related to the entries referred to in the co-relation statement submitted. The statement of Shri Karsanbhai K. Patel dated 15-3-91 has not been retracted. This fact has been corroborated by Shri Vipul C. Shah, Rajesh N. Shah, Vallabhabhai Patel, Hasmukhbhai Mehta and Ashwin S. Shah in their respective statements. Further, I notice that the opening balance and the quantity of rough diamonds in the co-relation chart submitted is different from the opening balance in Stock Register and entries in the record seized. Further the admission of Karsanbhai K. Patel regarding manipulation of the records and documents of Yogey Diamonds in after the submission of the statement of Ravji K. Patel vide his letter dated 21-2-91. Another point raised by the defence is that the diamonds seized were licitly imported by them under advance licences issued to them by the JCCI E, dated 15-3-88 and 28-7-88 and the export obligations under these licences could not be fulfilled fully on account of seizures of diamonds made on 18-1-91. I find that the contention of Yogey Diamonds in this regard is incorre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use notice and some have not retracted at all. Dealing with the contention that the retracted statement should not be relied upon the Commissioner in para 67 of the impugned order observed as follows : I would sustain my above findings for the seizures made from the possession of Prakash J. Modi as well as from Natwar M. Mendapara as well as from Dinesh M. Shah. In fact, Natwar M. Mendapara had admitted in his statement that he could not produce any legal document or jhangad for the diamond seized as these were of smuggled origin. There is no retraction letter from him in respect of this admission on record. Similarly, Shri Dinesh M. Shah has also stated at the time of drawal of panchanama that he is unable to produce any documents or jhangad for the diamonds in his possession which were seized as diamonds of smuggled origin. He also has not filed and retraction. Though Prakash Modi seems to have retracted his statement, his retraction is of a routine nature filed under expert legal advise. Therefore, I would draw on the ratio of the decision of Supreme Court cited earlier as well as the circumstantial evidences and provisions of Section 106 of the Evidence Act to infer the smug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as is sufficient, to raise a presumption in its favour with regard to the existence of the fact sought to be proved. Amba Lal s case, (1961) 1 SCR 933 = 1983 (13) E.L.T. 1321, was a case of no evidence. The only circumstantial evidence viz. the conduct of Amba Lal in making conflicting statements, could not be taken into account because he was never given an opportunity to explain the alleged discrepancies. The status of Ambalal viz. that he was an immigrant from Pakistan and had come to India in 1947 - before the customs barrier was raised - bringing along with him the goods in question, had greatly strengthened the initial presumption of innocence in his favour. Amba Lal s case thus stands on its own facts. 22. We have also seen the Tribunal s decision in Makhanlal Gupta v. CCP, West Bengal [1999 (113) E.L.T. 860] wherein the Bench has taken the following view : It is the burden of the department to prove that the goods have been illegally imported. From the description of the goods, the quantity and the explanation thereon by the appellants that these are purchased from Calcutta at that time. It cannot be inferred that these were illegally imported in the absence of any e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cut and polished diamonds. The Commissioner held that he was a willing accomplice in the activities of M/s. Y.D. He held him liable for penalty under Section 112(b) of the Customs Act, the appellant in his defence contended that he was only an employee and have dealt with the diamonds and so no penalty should be imposed on him. We observe that even though he was aware of the smuggling activities and dealt with the smuggled goods he was only an employee acting on the directions of his employers. A penalty of Rs. 1 lakh imposed on him by the Commissioner. We find it to be harsh. 25. Insofar as Shri Prakash J. Modi on whom a penalty of Rs. 1 lakh is imposed the Commissioner holds that the appellant admitted in its statement that he used to purchase smuggled diamonds without jhangad or bills from different sources and he had sold such diamonds on two or three occasions to Rajeev K. Patel. It is on his disclosure that he had kept some diamonds in bank locker another quantity of 19.86 cts. of diamonds valued at Rs. 1.34 lakhs were seized from his bank locker. The Collector imposed a penalty of Rs. 1 lakh under Section 112(b) of the Customs Act, in his defence he stated that he was deta ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
