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TMI Blog1985 (2) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... he search of the bed room in the said premises occupied by Shri M.K. Dudhwala, 11 pieces of gold sovereigns, 1 piece gold coin with inscriptions, one piece wrist watch of foreign origin, jewelleries studded with diamonds, pearls, precious stones and semi-precious stones were recovered from a steel almirah the key of which was produced by Shri Mahendra Kumar Dudhwala. As no satisfactory explanation or document could be produced in respect of the lawful importation or possession of the goods, these were seized under the Customs Act, 1962 and (Gold Control) Act, 1968. Shri Mahendra Kumar Dudhwala made a statement before the Customs officers on 12th January, 1976 wherein he had claimed that 11 pieces of sovereigns, 1 piece of gold coin and one piece wrist watch belonged to him, his younger sister, younger brother and his son. The remaining items were stated by him to have been given by Shri Deokinandan Bagaria, his maternal uncle, to him in a steel box on 11-1-76 for temporary custody for sale. Shri Bhagawati Prasad Dudhwala also made a similar statement on 15th January, 1976 before the Customs officer. On 31st January, 1976, Shri Deokinandan Bagaria made a statement stating that items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat all the items from Sl. nos. 4 to 15 of the search list were out of the goods seized in 1956 and released to Shri Rangalal Bagaria in two installments as per lists `A and `B at pages 4 and 5 of the reply to the show cause notice. A detailed chart as to correlation of the seized items with the articles seized in 1956 in one hand and with the Wealth Tax Return on the other, was also filed. It was further contended that in the present case particularly as the jewelleries under seizure were old and used, there could not have been any reasonable belief in the mind of the seizing officer that those were made out of smuggled goods. Referring to the will by Smt. Rami Devi Bagaria, Shri Bajoria contended that the onus of proof under Section 123 of the Customs Act, 1962, does not rest on the appellant as the goods were not seized from his possession nor he was owner of the goods. According to the will, the wife of Shri Bagaria was the executrix of the will and the articles mentioned in the will were to be bequeathed to the son and daughter of Shri D.N. Bagaria, after discharging all the liabilities under the Income Tax or Wealth Tax Act. It was further pleaded that so far as the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear are apparently made of gold but the weight of the same is so small that the same could not be separately valued. The same was, therefore, taken as diamond ornament on white metal. Item No. 7(a) is a pair of gold ear-ring, the diamonds were set on white metal only, the rod and the screw for fixing to the ear were made of gold which, however, was small in weight compared to the item and of inconsequential value compared to the value of the item and the item has also not accepted to be made and manufactured from gold. The learned adjudicating authority had held that the onus cast upon Shri Mahendra Kumar Dudhwala and Shri D. N, Bagaria by section 123 of the Customs Act, 1962 in respect of items no. 1, 2, 3, 5(a), 6(b), 6(c), 8, 11 and 12 of the search list, was not discharged by them and the aforesaid items were confiscated under section 111(d) read with Section 123 of the Customs Act, 1962. The rest of the seized items were released and no personal penalty was imposed. Being aggrieved from the said order, the appellant had filed an appeal to the Central Board of Excise Customs. The Hon ble Central Board of Excise Customs had confirmed the order of confiscation passed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Shri Bhagwati Prasad Dudhwala, father of Shri Mahendra Kumar Dudhwala was recorded on the 15th January, 1976 where Shri Bhagawati Prasad Dudhwala has stated the facts as to the ownership of jewellery. He has referred to para no. 5 of the show cause notice appearing at page 48 of the paper book. Shri Ratan Kumar Kisanpuri, an employee working in the Purchase Department of Shree Hanuman Cotton Mills Ltd. of which Shri Deokinandan Bagaria is one of the Directors, gave a statement. The statement was recorded on 4th May, 1976. In the statement, he had stated that Shri Deokinandan Bagaria in the morning on 11th January, 1976, has given a packet to him to be delivered to Shri Mahendra Kumar Dudhwala. The packet was wrapped in a newspaper. He did not know what was contained in the packet and on 11th January, 1976 when he reported to the office, the Cashier and others told him that he was wanted by Shri Deokinandan Bagaria at his residence. Accordingly, he went to the residence of the appellant and the appellant gave him the packet which was handed over to Shri Mahendra Kumar Dudhwala at 5/A, Muktaram Babu Street, Calcutta by him. The learned advocate has stated that there i complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eign origin. He has referred to item nos. 5, 6 and 7 of the search list which appears at page 41 of the paper book. The learned advocate has pleaded that all the three items are of white metal and item no. 8 of the search list is of yellow metal rings studded with stones, 3 pcs. (rings studded with one pc. w/stones each suspected to be diamonds of foreign origin). The learned advocate has referred to the valuation report. The learned advocate has further submitted that comparison of pages 39, 40, 41 and 42 with pages 62 and 63 i.e. a comparison of search list and valuation report does show that the valuation has been done and he has further pleaded that the valuation is not disputed. He has referred to para no. 7 of the show cause notice appearing at page 49 wherein it has been mentioned that the jewellery of the appellant is the same which was seized in 1956 and released subsequently. He has also referred to pages 88, 90 and 89 of the paper book which are letter of release dated 20th July, 1957, list of articles seized in 1955 and a letter dated. 9th July, 1957 stel written by the Asstt. Collector of Customs to Shri Ranglal Bagaria which contains details of the jewellery and the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad v. L. Kashi Nath, Jewellers reported in AIR 1972, Allahabad 231, He has pleaded that it was a case under the Gold (Control) Act where the Hon ble Court had held that : The condition precedent for the application of section 66 is the reasonable belief that the provisions of the Act have been or are being or are attempted to be contravened. The power then extends to the seizure of such gold in respect of which contravention has either been made or is about to be made. The Section does not permit an indiscriminate seizure with a view to fishing out material to form a belief and justify it by reasons culled therefrom. The belief must be of an honest and reasonable person based upon reasonable grounds. It is not a matter of subjective satisfaction. The learned advocate has also referred to affidavit of Shri Mahabir Prasad Saraf, son of Late Lakhmi Narayan Saraf which appears at page 93 and has referred to para no. 4 of the said affidavit where Shri Mahabir Prasad Saraf had deposed that he and his family had very close personal relation with Smt. Rami Devi Bagaria and he often used to go to her residence and had personally attended, on all the marriages and other important ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to page 38 of the paper book which is the search list. He has referred to page 107 which is the valuation report dated 31st March, 1972 of Chhotelal Amulakh and Mohanlal and has pleaded that item no. (. .) of the Valuation Report dated 3ist March, 1972 appearing at page 107 viz. one necklace set with 45 pcs. diamonds in gold duly tallies with one of the articles of item no. 5 which is 1 pc. necklace studded with white stones suspected to be diamond of foreign origin which appears at page 41 of the paper book. He has referred to page 115 of the paper book which is a comparative chart of the jewellery seized on 12th January, 1976 and 18th May, 1956. He has pleaded that a simple perusal of the comparative chart shows that the items seized on 12th January, 1976 do tally with the items seized on 18th May, 1956. The learned advocate has further pleaded that the weighment of jewellery was done by the Customs authority on the back of the appellant and there is difference in weight of. 4%. The learned advocate has pleaded that it is a slight difference and that may be due to inaccurate weighing and that too was done in the absence of the appellant. He has also again referred to page 117 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or the Department would rebut the initial presumption of innocence in favour of that person and in the result prove him guilty. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden or producing some evidence in respect of that fact in issue. It will only alleviate that burden to discharge which very slight evidence may suffice. These fundamental principles, shorn of technicalities, apply only in a broad and pragmatic way to proceedings under Section 167(8) of the Act. The broad effect of the application of the basic principle underlying Section 106, Evidence Act to cases under Section 167(8) of the Act is that the Department would be deemed to have discharged its burden if it adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. The learned advocate has pleaded that there is no element of concealment on the part of the appellant in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Board of Central Excise Customs. He has pleaded for the dismissal of the appeal. 5. After hearing both the sides and going through the facts and circumstances of the case, we would like to observe that the learned advocate has argued that the weighment of the jewellery was done by the Customs authorities on the back of the appellant. We feel that there is denial of principles of natural justice. The explanation of the appellant was not accepted on the basis of minor discrepancies in the weight of jewellery recorded by Customs authorities and weight recorded by the valuer under the Wealth Tax Act for the purpose of completion of assessment proceedings under the Wealth Tax Act. The whole order is based on the ground of their discrepancies in the weight of jewellery. The learned advocate had also argued that certain jewelleries were released though there were discrepancies in their weight. In the fitness of things, we hold that there is denial of principles of natural justice. Accordingly, we remand the case to the learned Additional Collector of Customs, Calcutta to make a de novo adjudication after giving proper Opportunity to the appellant, We further direct the rew ..... X X X X Extracts X X X X X X X X Extracts X X X X
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