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TMI Blog2011 (8) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... (SBI) counter adjacent to the Station Duty Officer's room after his arrival from abroad. Shri Siddharth Shankar Roy, a Customs officer in uniform, approached Akhtar and signalled him to the adjacent SDO's room, whereupon Akhtar followed the officer. In the SDO's room, S.S. Roy handed over a pouch to Akhtar. At this time, Assistant Commissioner Shri S.S. Kulkarni and Intelligence Officers Shri A.K. Upadhyay and others of Air Intelligence Unit (AIU) of Customs intercepted Akhtar and Roy and questioned them in the SDO's room, whereupon Akhtar stated that the said pouch containing foreign currencies was received by him from S.S. Roy. It was stated by S.S. Roy that the pouch containing foreign currencies was carried by him in a briefcase and the same was handed over to the passenger (Akhtar). The passenger also stated that he did not bring any foreign currency from abroad. His Indian Passport No. T089987 issued at Dubai and his travel documents were recovered from Customs counter No.14, Arrival Hall. Subsequently, the brown 'OMEGA' pouch, which was recovered from Akhtar while he was receiving it from S.S. Roy, was opened by the Assistant Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arrival passengers to different counters asked him to go to counter No.15 but the officer at counter No.14 took his passport and told him to wait behind his counter; that, after 5-10 minutes, the Customs officer at counter No.14 directed him to come with his baggage to baggage-screening machine located near the Superintendent's room of Module-I; that he did as directed; that, after screening the baggage, the said Customs officer, who displayed his name (Siddharth Shankar Roy) on his name plate, asked him to wait near SBI's counter near SDO's room of Module-I; that accordingly he left the baggage trolley near counter No.14 and went to wait near SDO's room as instructed by S.S. Roy; that, after some time, S.S. Roy signalled him to follow him to the SDO's room; that, when he went to the SDO's room with S.S. Roy, he saw a lady Customs officer in white uniform seated in the outer portion of the room; that S.S. Roy went to the inner portion of the SDO's room; that he also accompanied him; that S.S. Roy opened his 'Echolac Zipper' briefcase and took out a brown-coloured pouch and handed it over to him; that, the moment he took the pouch, a few plain-clothes persons entered the SDO's roo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted by one Musa Mustafa; that the said Musa had given him the pouch outside the arrival hall of Module-I when he (Roy) was entering the baggage hall to join duty on 7.1.96; that the description of the said passenger had been obtained when he took over the pouch from the said Musa; that he carried the said pouch containing foreign currencies in his 'Echolac' briefcase to the Baggage Hall and kept the baggage next to the sofa lying inside the room adjacent to SDO's cabin; that as soon as he handed over the said pouch to the said passenger, they were intercepted by Shri S.S. Kulkarni, Assistant Commissioner on duty and some other officers who had accompanied him along with two panchas; that he had admitted to the Assistant Commissioner in the presence of other officers and the panchas that he had handed over the said pouch, which was given by Musa and contained foreign currencies, to the said passenger for obtaining Currency Declaration Form; that the pouch was examined and the foreign currencies recovered under a panchanama; that nobody had introduced him to the said Musa but Musa had seen him at airport and knew that he was a Customs officer; that Musa had approached him some time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the above currencies in Currency Declaration Form; that he also produced the above 'sale note' before the officer at the counter; that the officer returned it to him after inspection; that the officer refused to accept the sale note as proof of legal acquisition of the currencies; that when he (applicant) was taken home to witness search of his residential premises on the same day, he handed over the sale note to his father to avoid its destruction by the intelligence officers. S.S. Roy, in his bail application, submitted that his confession had been extorted through threats of detention under COFEPOSA and of suspension from service. The retractions of Akhtar and Roy were challenged by the Assistant Commissioner of Customs in his replies filed in the court of ACMM on 15.1.1996. 7. Pager No.102704 was recovered from the briefcase of S.S. Roy and its print-out was taken by AIU, which revealed that the pager belonged to one Shaikh Asif Ali, whose statement under Section 108 was recorded on 15.3.1996, wherein Asif Ali stated that Roy used to contact one Mr. Musa and one Mr. Ismail with the above pager and that these three persons were dealing in foreign exchange. Asif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been to Dubai for nine years and had made eight trips to India in 1995. During those visits, he had imported 5 kgs. of gold and 100 kgs. of silver and cleared them on payment of duty. The gold and silver did not belong to him and the same were delivered to persons in Ahmedabad and Delhi respectively for monetary consideration of Rs.25,000/-. When a photocopy of 'Sale Note' which he produced in the Chief Metropolitan Magistrate's Court on 9.1.1996 was shown to him and it was pointed out that, as per the Sale Note, he had converted US Dollars and Saudi Riyals into UAE Dirhams, he replied that he had nothing to say about it and did not know how it happened. Though he was summoned again to give further statement on 28.6.1996, he refused to give any further statement. This refusal was also recorded in a Panchanama. 10. Akhtar filed in the court yet another retraction dated 24.6.1996 vis-`-vis his statement dated 21.6.1996 recorded under Section 108 of the Customs Act. This retraction was also challenged in a reply dated 25.6.1996 filed in the court by the Assistant Commissioner of Customs. 11. Based on the evidence gathered by AIU, a show-cause notice was issued on 28.6.1996 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Foreign Exchange Regulation Act, 1973 (FERA), to enquire and determine whether the foreign currency had been legally acquired or not. Before/without determination by the proper officer of ED that the currency had been illegally acquired, the Customs authorities should not have even seized the currency in the belief that it had been illegally acquired and brought into the customs area. As it was beyond the jurisdiction of the Commissioner of Customs to determine the above question (whether the foreign currency had been illegally acquired or not), his office referred the case to the ED for appropriate proceedings under Section 51 of the FERA. A copy of the order dated 9.11.2001 passed by the Deputy Director of ED holding that the currency had been legally acquired abroad was produced before the Commissioner on 24.1.2002. The Customs authorities did not file any appeal against the said order under Section 52 of the FERA. Therefore it was not open to the Commissioner of Customs to hold that the seized foreign currency had been illegally acquired. The Commissioner ought to have released the currency to Akhtar in the light of the findings of the Deputy Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner (AIU) that he had been manhandled by one Shri A.K. Singh, ACO in the presence of other officers of AIU around midnight of 8/9.1.1996. Akhtar produced the sale note dated 7.1.1996 and claimed the seized foreign currency in the court while retracting his statement dated 8.1.1996. As the self-incriminating statements of the appellants recorded under Section 108 of the Customs Act were sought to be used as evidence against them in the proceedings before the ACMM, the Magistrate's court was the appropriate forum for the appellants to retract those statements. Copies of the retractions were also served on the Customs officer who represented the department in the criminal case. That the appellants were physically assaulted to give self-incriminating statements is evident from medical reports and other records of the ACMM's court. For all these reasons, the said statements should be held to have been validly retracted. Once so retracted, the statements ought to be corroborated in material particulars so as to be used as evidence against the appellants. But no corroborative evidence was brought forth in the show-cause notice to prove the facts averred in the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a premeditated hawala deal. Akhtar, when intercepted by AIU officers after his arrival at Sahar airport from Dubai on 8.1.1996, was collecting the foreign currency from S.S. Roy in the customs area of the airport to declare it at Roy's customs counter and get a CDF issued by Roy so that he (Akhtar) could take the currency out of India later in violation of FERA provisions. Akhtar was attempting illegal export of the currency. No evidence of its acquisition from any authorized dealer in foreign exchange or of its lawful import into India was produced by him to the Customs authorities, nor did he make any valid retraction of his confessional statement by proving that the statement had been extorted by AIU by use of force, pressure, threats or other means of intimidation. The facts admitted by him under Section 108 of the Customs Act were corroborated by S.S. Roy in his own confessional statement under the same provision of law. There is no valid retraction of Roy's statement either. He also could not prove his allegation that the AIU had extorted a self-incriminating statement from him by force, threats, assault etc. In the circumstances, the confiscation of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... None of the accused complained of any body pain due to assault by any officer of customs. Therefore, the allegation of the appellants that they were physically assaulted by officers of customs to extort self-incriminating statements under Section 108 of the Customs Act is baseless. Secondly, even in his bail application dated 9.1.1996 before the ACMM, the allegation raised by S.S. Roy against the officers of Customs was only that his confessional statement had been extorted by the officers by threats of COFEPOSA detention and suspension from service. Roy in his bail application did not level the charge of assault. Thus the reason stated by S.S. Roy before the Judicial Magistrate to show that his statements under Section 108 of the Customs Act are involuntary and untrue is inconsistent with the submissions made for the very same purpose in his reply to the show-cause notice. Thirdly, though, in his letter dated 9.1.1996 to the Asst. Commissioner(AIU), S.S. Roy complained that he had been badly beaten and manhandled by one Shri A.K. Singh, Asst. Commissioner (AIU) in the presence of certain other officers of AIU in the night of 8/9.1.1996 and though Shri A.K. Singh denie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his father for safe custody is also a concocted story. The panchanama drawn at his residence on 8.1.1996 does not indicate his presence at all, nor is there anything in the panchanama to indicate that Akhtar's father produced the sale note to the officers of AIU. There was no such 'sale note' in existence till one was produced by Akhtar for the first time with his bail application before the ACMM on 9.1.1996. The sale note produced by him before the Judicial Magistrate is only a fabricated document. Had it been genuine, it would have shown Akhtar's passport number and full address for easy identification. The name 'SHAIKH MOHD. AKHTAR' only was shown without passport number, address or other particulars for identification in the sale note produced before the Judicial Magistrate. There is no reliable evidence on record to connect the above 'sale note' with the appellant in appeal No.C/568/2002 as there can be more than one person with the same name 'SHAIKH MOHD. AKHTAR'. The appellant in C/568/2002 cannot claim the sale note without establishing such connection. Moreover, the sale note in question does not cover UAE Dirhams 2 lakhs seized by AIU under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Asst. Commissioner of Customs (AIU) under Section 124 of the Customs Act. On the other hand, the show-cause notice of the Dy. Director of ED was issued and adjudicated under Section 51 of the FERA, 1973 for a different purpose. That show-cause notice alleged contravention, by Akhtar and Roy, of the provisions of Section 8(1) of the FERA, 1973 and accordingly proposed to impose penalties on them under Section 50 of the said Act. Under Section 8(1) of the FERA, no person other than an authorized dealer shall in India, and no person resident in India other than an authorized dealer shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to, or exchange with, any person not being an authorized dealer, any foreign exchange, except with the previous general or special permission of the RBI. Violation of this law was alleged in the show-cause notice issued by the Dy. Director of ED and, in adjudication of this show-cause notice, the Dy. Director of ED passed Order-in-Original dated 9.11.2001 which has been relied on by the appellants in the present case. Obviously, the proceedings of the ED under the FERA and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Customs (AIU) produced by JCDR; this letter states (a) that the adjudication order dated 9.11.2001 was accepted by the Directorate of Enforcement, (b) that the Customs Department does not come in picture with regard to filing of appeal against the said order and (c) that any copy of the said order was not forwarded to the Customs Department.] [Reliance also placed on the Tribunal's Larger Bench decision in Subhash Projects & Marketing Ltd. Vs. CC, Cochin 2009 (239) ELT 440 (Tri. LB)] wherein an association of domestic manufacturers was held to be not 'aggrieved party' and their application for intervention was dismissed]. Therefore the Customs Department was unconcerned with the outcome of the adjudication proceedings under the FERA. (vi) The confessional statements of the appellants under Section 108 of the Customs Act, which were not validly retracted, are enough to establish that the seized foreign currency was not legally acquired abroad and imported into India by Akhtar but illegally acquired in India with the help of S.S. Roy for the purpose of subsequent exportation to Dubai without the permission of the RBI. The circumstantial evidence in this case is also in supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide the airport. As the signatures of Akhtar and Roy are not to be seen in the confrontation panchanama, it cannot be reckoned as evidence in favour of the Revenue. Shaikh Asif Ali's statement dated 15.3.1996 was taken by the AIU coercively on the day of his wedding only to justify the existence of Musa who could not be traced. 16. We have given careful consideration to the submissions and arguments. At the outset, for valid reasons, we have to reject the ld. Counsel's proposition that the Customs authorities are bound by the order passed by the Dy. Director of ED. The reasons are summorised below:- [a] The proposal in the show-cause notice dated 20.1.2000 of the Dy. Director of ED was to impose penalties on the appellants under Section 50 of the FERA, 1973 for their alleged violation of Section 8(1) of the Act. The two provisions of the Act read as follows:- Section 8(1) of the FERA, 1973 Except with the previous general or special permission of the Reserve Bank, no person other than an authorized dealer shall in India, and no person resident in India other than an authorized dealer shall outside India, purchase or otherwise acquire or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; A conjoint reading of Section 13(2) of the FERA, 1973 and Section 11 of the Customs Act, 1962 would indicate that export of foreign exchange (other than foreign exchange obtained from an authorized dealer or from a money-changer) from India without the general or special permission of the RBI or the written permission of a person authorized in this behalf by the RBI would be a direct breach of the restriction laid down under Section 13(2) of the FERA and would also be deemed to be breach of restriction laid down under Section 11 of the Customs Act. It is not in dispute that 'goods' includes currency also. Therefore, any breach of restrictions imposed by or under Section 13 of the FERA is, by virtue of Section 67 of the Act, actionable as a breach of Section 11 of the Customs Act. On the contrary, as it appears from the text of Section 50 of the FERA, contraventions of Section 13 and a few other provisions of the FERA were excluded from the ambit of proceedings envisaged under Section 50 of the Act. In other words, any breach of restriction laid down under Section 13 was not actionable under Section 50 of the FERA. Any contravention of Section 8(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign exchange with any person not being an authorized dealer. These restrictions are in respect of transactions involving foreign exchange in India or outside India. The transactions involving foreign exchange, referred to in Section 13 of the FERA, stand on an entirely different footing. Sub-section (1) of Section 13 authorised the Central Government to impose certain restrictions on import of foreign exchange and Indian currency into India. Sub-section (2) imposed certain restrictions on export of foreign exchange (other than foreign exchange obtained from an authorized dealer or from a money-changer) and Indian currency out of India. The scope of enquiry by the Customs Department was to find out whether the appellants had attempted to export foreign currency from India without general or special permission of the RBI or written permission of a person authorized by the RBI. The enquiry contemplated by the Department was in relation to a suspected attempt to export foreign currency from India. The scope of enquiry by the ED was to find out whether the foreign currency had been lawfully acquired within the same country and not to find out whether it had been lawfully imported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined the relevant provisions of the FERA and have found that, against the adjudication order passed u/s 51 of the Act, any 'aggrieved person' could prefer an appeal under sub-section (2) of Section 52 of the Act to the Appellate Board constituted under sub-section (1) of this Section. Sub-section (2) of the said Section 52, without the provisos thereto, reads as follows:- Any person aggrieved by such order may, on payment of such fee as may be prescribed and after depositing the sum imposed by way of penalty under section 50 and within forty-five days from the date on which the order is served on the person committing the contravention, prefer an appeal to the Appellate Board: It is clear from the above provision that any appeal thereunder could be filed only after depositing the amount of penalty imposed u/s 50 of the Act (the Appellate Board had the discretion to dispense with this deposit conditionally or unconditionally under the second proviso to sub-section (2) of Section 52). Obviously, the person on whom a penalty has been imposed u/s 50 of the Act is the 'person aggrieved' by the adjudication order passed u/s 51 of the Act and he is the person entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice issued by the Asst. Commissioner of Customs (AIU) proposed to confiscate the currency under the said provision of law and to impose penalties on the appellants u/s 112 of the Customs Act. The adjudicating authority ordered absolute confiscation of the currency u/s 111(d) of the Customs Act and imposed penalties on the appellants u/s 112 of the Act. The proposal in the show-cause notice for confiscation of the seized foreign currency was based on alleged violation of the restriction / prohibition imposed u/s 11 of the Customs Act read with Section 13(2) of the FERA. As we have already noted, Section 13(2) of the FERA imposed certain restrictions on export of foreign exchange other than foreign exchange obtained from an authorized dealer or a money-changer. Accordingly, no person could export such foreign exchange out of India without a general or special permission of the RBI or a written permission of a person authorized in this behalf by the RBI. By virtue of Section 67 of the FERA, such restriction imposed u/s 13 should also be deemed to have been imposed u/s 11 of the Customs Act and all the provisions of the Customs Act should have effect accordingly. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned this change of rule. It was in that context that the Hon'ble Supreme Court rendered the above ruling. In the case of Collector of Central Excise, Calcutta Vs. Pradyumna Steel Ltd. [1996(82) ELT 441 (SC)] relied on by the ld. JCDR, the apex court held that mention of wrong provision of law when the power exercised was available under a different provision was itself not sufficient to invalidate the exercise of that power. Thus there is a line of decisions in support of the view taken by us with regard to the provision of law invoked in the show-cause notice and the impugned order for confiscation of the foreign currency. Therefore, the non-mention of Section 113(d) of the Customs Act in the show-cause notice or in the impugned order would not per se invalidate the confiscation of the foreign currency ordered on the ground of violation of prohibition imposed u/s 13(2) of the FERA, 1973 / Section 11 of the Customs Act, 1962. In any case, neither of the appellants has challenged the confiscation on the ground of wrong provision of law having been invoked, nor has their counsel argued to this effect. 17.2. The case of the Revenue is that the foreign currency in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re this Tribunal, both the appellants have relied on the medical reports in support of their allegation that they had been physically assaulted by the AIU officers. We have perused these documents and have found that the notings in these medical reports do not support the above allegation of the appellants. The Medical Officer reported that both Akhtar and Roy complained of body pain due to assault by the police. Therefore, in our view, nothing contained in the medical reports can be relied on by the appellants to contend that they had been physically assaulted by officers of Customs for extorting self-incriminating statements. As rightly held by this Tribunal in Zaki Ishrati's case, retraction of a confessional statement should be addressed to the same officer to whom the confessional statement was given u/s 108 of the Customs Act. In this case, the retraction was made before the Judicial Magistrate and not before the concerned officer of Customs (AIU). Moreover, though the officer of Customs who was alleged to have beaten/manhandled the appellants challenged their retractions before the ACMM, he was not cross-examined by any of the appellants. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he retractions. 17.3. As regards the 'sale note', we find that there is no reliable evidence on record to show that this document was brought from abroad and produced by Akhtar before the officers of AIU on his arrival from Dubai on 8.1.1996. The seizure panchanama dated 8.1.1996 does not contain mention of this document. It is not the case of the appellants that this panchanama is incomplete in any material particulars. Had any sale note been produced by Akhtar on his arrival from abroad, a mention of it would have been made in the panchanama. Personal search of the appellants also did not yield any sale note. The case of Akhtar is that he produced the sale note before the officers of AIU but the same was not accepted. The sale note was allegedly returned to Akhtar who allegedly took it out and handed it over to his father at his residence when the residential premises were searched by the AIU officers on 8.1.1996. This story is also unbelievable inasmuch as (a) Akhtar's father himself stated under Section 108 of the Customs Act that his son was not present during the course of search of their residential premises and that he met his son for the first time after his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to him (father), the latter would have mentioned and/or produced it to the officers of AIU who came to search the residential premises. In that event, the officers would have recovered the document and mentioned it in the panchanama dated 8.1.1996 drawn at the residence. There is no mention of the aforesaid receipt/sale note in the said panchanama. Secondly, in the normal course, Customs would not let an offender go free till he is produced before a Judicial Magistrate. His father's affidavit dated 27.5.1996 does not disclose any exceptional reason as to why he (Akhtar) was allowed to meet his family at his residence in between the time of his interception at the airport and the time of his production before the Judicial Magistrate. Thirdly, if it was the case of Sharif that he and his wife were compelled by the officers of Customs to accompany them to the office of AIU on 24.5.1996, it was open to him to take the assistance of a lawyer like the advocate who appeared for his son (Akhtar) in the court of ACMM on 8.1.1996. Lastly, apart from the bald statements contained in the affidavit dated 27.5.1996, there is no evidence of Sharif having been threatened or pressurised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as proof of his lawful acquisition of the foreign currency in the absence of any investigation by the department overseas into the source of the document. The initial burden was on Akhtar to prove that the sale note had been issued to him by an authorised dealer in foreign exchange abroad on 7.1.1996 and that he had brought the document with him into India by Flight No. CX-750 (Dubai to Mumbai) on 8.1.1996. Only when this burden is discharged by him can one say that the Customs department should investigate abroad into the source of the document and gather evidence to establish that it is a fabricated document. Akhtar failed to discharge his initial burden of proof and hence he cannot bank on any lack of investigations by the Customs department abroad. The view taken by the Dy. Director of ED with regard to the sale note without conducting any investigations in India or abroad is not binding on the Customs authorities for reasons which we have already recorded and, therefore, nothing contained in the order passed by the Dy. Director of ED under the FERA, 1973 can be relied on by the appellants to sanctify the document which is an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption for redemption of the currency. In this context, it is advantageous to refer to Amit Kumar Saha's case where the Tribunal, pursuant to the High Court's decision on a Reference Application, upheld the absolute confiscation of certain foreign currency in the absence of evidence of its acquisition from authorized dealer in foreign exchange. The confiscation of the currency by the Commissioner in the present case has to be sustained under Section 113(d) of the Act for reasons already recorded by us. It is ordered accordingly. 17.6 The department has established beyond reasonable doubt that the appellants colluded with each other in the Customs area of Sahar airport on 8.1.1996 for the prospective export of the foreign currency without any permission of the Reserve Bank of India. Their conduct rendered the foreign currency liable to confiscation under Section 113(d). Therefore the appellants are liable for penalty under Section 114 of the Act. This penalty, in our view, cannot be resisted on the ground that Section 114 was not invoked in the show-cause notice or in the impugned order. Non-mention of Section 114 or mention of a wrong provision of law cannot be fatal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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