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TMI Blog2017 (10) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... ut it yet needs to be proved. The fact that a statement is made and recorded, and is statutorily said to be relevant, does not mean it is proved. That statement, like all testimony, must be subjected to the rigours of cross-examination, to be drawn into the evidentiary pool to form a basis for reasoning or conclusion. Section 138B does not say, and could not say, that statements can be taken as proved even without cross-examination. This, however, is how the CESTAT has misunderstood the section. All that the section says is that for want of production of a witness, his Section 108 statement does not automatically cease to become relevant. Questions of relevancy and proof are yet determined by the Indian Evidence Act, and the CESTAT wholly failed to take these into account. The contention of the Learned Counsel for the Appellants that Section 138(B) of the Customs Act applies only to prosecution of offences under the Customs Act and not to departmental adjudication proceedings is not well-founded. A bare perusal of Section 138(B)(1) (set out above) tells us otherwise. It is not possible to hold that the word ‘proceeding’ excludes departmental adjudication proceedings. Indeed, even t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Having heard learned Counsel on both sides, we are not in the least satisfied that the impugned order can be sustained. The absence of an essential component for penalty adjudication proceedings - the contraband itself - is sought to be substituted by conjecture: 'it must have existed'. Worse yet, the value of the contraband remains unknown to this day, and it is on the rankest speculation, and on one astonishing statement by one officer who plays a central role, viz., that his 'experience' when once he claimed to have 'held' the contraband allowed him to depose to its aggregate value, that the entire edifice of the order is founded. If once there was a 'witch-hunt' against this officer, as he contends, it rather seems to us to now be full-tilt in reverse, with the authorities grasping at any straw. We do not believe that the provisions of the Customs Act, given their ambit, purpose and scope, can be interpreted in this fashion. The interpretation is not just 'liberal', itself impermissible in a statute of this sort. It is a formless, elasticised interpretation that is adopted, one entirely unknown to our jurisprudence, founded on nothing but inference, surmise and supposition, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal ("CESTAT", "the Tribunal"), West Regional Bench, at Mumbai, dismissing the Appellants' appeals, five in all. Appeals Nos. C/28 to C/32 of 1995. Those appeals came up from an order-in-original dated 14th October 1994 passed by the 2nd Respondent, the Collector of Customs ("the Collector"). Order in original No 15/Cus/Goa/94. The Collector's order is also under challenge. The CESTAT upheld the Collector's order. 6. The present appeals were admitted on 14th March 2005 on a substantial question of law framed thus: Whether in the facts and circumstances of the case the findings imposing penalty rendered by the Commissioner of Customs-Respondent No.1, and CESTAT are perverse as they are based on the statements of three eye witnesses to the incident, viz., Vincy, Baptista and Sebastian, who were not allowed to be cross-examined by the Appellant? 7. As we have noted, there are other subsidiary questions implicit in this question of law, and we will identify and address those as well. 8. First, as to the Appellants. Churchill Braz Alemao is a former Chief Minister of Goa. Ciabro and Joaquim are his brothers. There was another brother, Alvernaz; his death on 16th May ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 am, he received a tip-off at his residence of some suspicious activities involving the Alemaos at the Fatrade/Varca Holiday Beach Resort site. He rushed back. There, he claims he saw a white Contessa no GA-02A-4567, a blue Maruti motor car no DAC 5942 and a black Fiat car at the site. The cars all had dark tinted glasses. 13. Fernandes claims he saw Ciabro Alemao and two 'canoes' with outboard motors approaching Carmona Beach from the high seas. At noon, the canoes touched shore. Each carried four or five persons. They were offloading boxes that looked like heavy-duty vehicle batteries from the canoes. These were apparently of some weight, and had to lifted with bamboo poles and oars. Fernandes recognized Alvernaz Alemao driving the Contessa. Four of the five battery boxes were placed in that car's boot. The fifth went into the blue Maruti. Once all the boxes were loaded, Alvernaz drove off in the Contessa. 14. Fernandes gave chase on his motor cycle, careening down the narrow village roads in pursuit. Along the way, Fernandes seems to have been able to pass on to a good Samaritan a chit containing the Mormugao Customs House number with a request to deliver it to his wife at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reginaldo Rodrigues, Romeo, Roy Miranda, Anton Fernandes, and others came to the spot where the Contessa was, opened its boot, removed the gold and took it away. Churchill Alemao took Alvernaz to Dr. Maurito Rock Furtado's home in Varca. Alvernaz died there. 17. On 7th June 1991, the CBI registered a crime against Costao Fernandes for murdering Alvernaz. 18. On 20th December 1991, the Collectorate of Customs and Central Excise, Goa, issued a show cause notice to the present Appellants for personal penalty and confiscation of the two vehicles and motor scooter. The Alemaos responded on 20th December 1991. On 4th May 1992, they requested cross-examination of 38 witnesses. Only 11 were produced. 19. In 1994, a Customs Case was filed against the Appellants before the Chief Judicial Magistrate for offences punishable under Section 135(1)(i) of the Customs Act, read with Section 3 of the Import and Export Control Act, 1947 and Sections 186, 201, 206, 379 and 120(B) of the Indian Penal Code. 20. On 6th August 1994, the Sessions Court, North Goa, framed charges against Fernandes under Section 302 of the Indian Penal Code for the murder of Alvernaz Alemao. 21. Between September and Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the way to the Supreme Court. Of course, the principal reason for the latter, the dismissal of the Customs Case, is that the contraband in question was not produced at all. As we shall see, this is pivotal to the present case, for this lacuna continues, and is sought to be covered up by a reliance on some observations of the Supreme Court in Fernandes' entirely separate case regarding the homicide charges against him. C. QUESTIONS RAISED 27. The substantial question of law framed at the time of admission, read in context, throws up subsidiary questions that must be addressed. (a) Can a penalty of improper importation of goods under Section 112 (a) and (b) be imposed without any chemical, physical, or metric examination or actual seizure/confiscation of the alleged contraband gold? (b) Could the Tribunal legitimately have relied on Section 138B of the Customs Act and applied it to departmental adjudication proceedings when the section specifically and clearly applies only to prosecution for offences under the Customs Act? (c) Could the CESTAT have used the observations of the Supreme Court in Fernandes' homicide case (Criminal Appeal No. 242 of 1996) to which the Appellants wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cused 25. 30 August 1991 Anthony John Rodrigues aka Reginald Rodrigues Accused 26. 6 July 1991 Emilia Monteiro Yes 27. 29 August 1991 Ashok Bhasin Accused 28. Not interrogated Roy Miranda and Anton Fernandes Absconding 29. Sharanappa, the watchman at Varca Holiday Beach Resort, stated that at about 7 am on 16th May 1991, he saw Joaquim Alemao and Subhash Pandey arrive at the site. Joao Minguel Luis, the owner of Luis Bar, claimed Ciabro Alemao visited him, and was accompanied by others in two to three cars at 11:45 am at the Carmona Beach on 16 May 1991. During his cross-examination at his personal hearing on 7th June 1994, Luis claimed to not remember the exact date of Ciabro Alemao's visit. Gurudas Naik claimed to have been approached by Fernandes, and given a chit containing the numbers of the Customs Office, Mormugao and he delivered this to Fernandes' wife. 30. Vincy Soares is one of the witnesses who claims to have seen Joaquim, Ciabro, Reginald, Roy Miranda, Anton Fernandes, among others, arrive at the scene of the accident after Fernandes left. He also claims to have witnessed Joaquim removing a black battery-type box and giving this to Roy Miranda who pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed his statement that he was threatened by Ronnie Rodrigues. All that this shows as undisputed, is that Alvernaz and Alemao were at the construction site on 16th May 1991. As against this, the only evidence that canoes approached the shore and something alleged to be contraband was being smuggled was that of Fernandes. It is impossible to conjecture that statements were withdrawn or changed due to influence or pressure. 35. Vincy, Baptista and Sebastiao are the witnesses to whose evidence we must turn, since this is pivotal to the substantial question of law. They claimed that Joaquim broke open the boot of the Contessa and took out the battery-type boxes. They were not produced for cross-examination citing their unavailability. Then John Rebello completely retracted his statement: he denied ever having carried the identified contraband, or being threatened by Roy Miranda or Gongrette. The entire case thus rests on the Fernandes' wholly uncorroborated testimony. Not one of the witnesses have made any mention of the only item in question: the gold biscuits Fernandes said he displayed. That is our only focus, and we are most emphatically not concerned with Costao Fernandes' moral im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lini Peter; Quiteria D'Silva; Tereza Mergulhao; and Baptista Fernandes. The Collector maintains that the Customs Department made all reasonable efforts to secure the presence of the witnesses. The three witnesses key to our discussion, Vincy Soares, Baptista Fernandes and Sebastiao Fernandes, never received a summons. They were said to be abroad. 41. As to these three witnesses (Vincy, Sebastian and Baptista), and the failure to produce them for cross-examination, the CESTAT relied on their Section 108 statements, but held, in effect, that it was irrelevant that they were not offered for cross-examination. In this, the CESTAT relied on Section 138B of the Customs Act. That Section reads: 138B. Relevancy of statements under certain circumstances.- (1) A statement made and signed by a person before any gazetted officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains,- (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings. The appellant had been discharged by the magistrate. He sought quashing of the customs penalty. The Tribunal drew support from a finding that of the High Court that the mere fact that the petitioner was acquitted by the magistrate in a criminal case is not enough to hold that penalty imposed in the departmental proceeding cannot be sustained. However, the Tribunal did not consider the judgment in its entirety or in its correct perspective. What the Court held was that a penalty could not be imposed by relying only on the statement of one person who was unavailable to ascertain the correctness of that statement. "In these circumstances, it is difficult to uphold the orders passed by the three authorities below imposing penalty on the petitioner. I wish to make it clear that I am not holding that in no case the penalty can be imposed unless person, on whose statement reliance is placed, is produced for cross-examination but on the facts and circumstances of the present case, it will have to be held that the order of penalty is not accurate." The petition succeeded. The orders passed by the three authorities were set aside and the deposited amounts were refunded. This cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, which would get dashed if bias creeps in its investigation. But then, the deceased was no ordinary mortal, as he was a brother of the one time Chief Minister of Goa; and the occurrence had taken place in Goa. 9. What finds the appellant before this Court is denial of the protection made available by Section 155 of the Customs Act, 1962 (the Act).... ... 17. The Additional Solicitor General has another submission to make. The same is that being faced with an organised underworld of smugglers, the appellant should have remembered that "discretion is the best part of valour". If the appellant would have done so, he would have perhaps saved his skin, but could not have saved the larger interest of the society and nation, which does lie in preventing smuggling. The appellant showed valour not in taking to heels, but in fighting. We have all praise for such an officer and we would not allow him to be prosecuted, much though the smugglers would want it to be so. Indeed the appellant is being persecuted, not prosecuted, as the action smacks of revenge seeking to take his life because he has taken the life of a smuggler; of course, one close to political high-ups of Goa. Let this not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prosecution of Fernandes, and his claim to immunity under Section 155. 51. Indeed, there is material in the narrative that this very lack of material in the context of a Customs Case, did not move the Supreme Court to hold as the CESTAT now has. Consider, first, the findings of this Hon'ble Court in the Criminal Revision Application No 8 of 2001: Union of India v Churchill Alemao. (2009) 245 ELT 137 : 2003 SCC Online Bom 1294. There, this Court said: 4. The learned Trial Court discharged the Complainant/Accused on the grounds:- (i) that the prosecution had not been able to establish that the said two Cars namely the Contessa Car and the Maruthi Car belonged to the Accused. (ii) there was no evidence to even prima facie indicate that the boxes in the said Contessa Car contained gold biscuit. (iii) P.W. 5, Costao Fernandes, had not given the details of the markings which he had noticed on the alleged gold biscuit to show that gold was smuggled and brought to India by sea. (iv) there was no corroboration from the witnesses examined by the Complainant to corroborate the statement of P.W. 5, Costao Fernandes, that he had shown one gold biscuit to the persons who had assembl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act applies only to prosecution of offences under the Customs Act and not to departmental adjudication proceedings is not well-founded. A bare perusal of Section 138(B)(1) (set out above) tells us otherwise. It is not possible to hold that the word 'proceeding' excludes departmental adjudication proceedings. Indeed, even the CESTAT did not think so, and we see no reason to consider this plea now. 56. Consequently, if there were gaps, retractions and inconsistencies, and even if the Section 108 statements of the three witnesses (Vincy, Sebastian and Baptista) were relevant, those statements demanded proof and corroboration. They could not, on their own, and without the witnesses being made available for cross-examination, survive the tests we demand of proof. F. THE INAPPROPRIATE LANGUAGE OF THE CESTAT ORDER 57. The language of the CESTAT order is to be deprecated. We do not appreciate its tone or tenor, and even less its palpable derision and condescension. Take paragraph 3 of that order: "3. Churchill Alemao started his life as a tea-boy and rose to become the Chief Minister of Goa. Democracy at its very best." 58. We fail to understand what, if anything, this is supposed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... managed to halt the Contessa, chose to get into it, rather than pull Alvernaz out of it. We do not know why Fernandes did not head to the Customs Headquaters: he disappeared for two days, and is said to have swum across a river to Betul. If the Contessa was mangled by its collision with the motorcycle, what need was there to deflate its tyres? If there was no need, and the car was still operational, why did Fernandes not use it to move himself, Alvernaz (clearly in need of medical attention) and the contraband he said was in the boot to the nearest police outpost (one that could not have been very far off, for the police arrived in three-quarters of an hour). There are several other inconsistencies in the Customs' case, but these are certainly questions that arise in Fernandes' account. As we have said, we will not question his valour or virtue. What we do, however, question very much is the CESTAT's acceptance of this narrative wholesale and without question, and its subsequent acceptance as 'proof' and 'evidence' of statements of the three witnesses never produced for cross-examination. In our considered view, there is no substitute for evidence and proof, and no amount of punge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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