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TMI Blog1997 (3) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... d to assess such gold imported. The officers examined the gold and assessed the same for payment of Customs duty as per the notification and after payment of duty in foreign exchange each one of them was issued a duty paid receipt and was allowed the clearance on said gold. It is alleged by the petitioners that they brought this gold for their personal use and they were to appoint one Suresh Jain, a regular broker for the sale of gold who had also come to airport to receive the petitioners. It is the case of the petitioners that they came out of the customs hall and were still at the airport, when they were apprehended by the officers of the Commissioner of Customs and Additional Commissioner of Customs and questioned about the ownership of the gold. The petitioners claimed the gold to be of their ownership. However, they were taken to the office of the second respondent at Marine Lines. Some statement was dictated by the customs officer and the petitioners were forced to write or sign the said statement under the physical assault, mental torture and duress. The petitioners thus were compelled to sign the statement. Thereafter, the officers informed the petitioners that the gold is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of them to be paid as customs duty for the purpose of clearance of gold at Mumbai airport. After customs clearance, each one of them was advised by the said Mohammedbhai to hand over 42 gold biscuits to a person named as Mr. Suresh Jain purported to be a representative of Mr. Mohammedbhai for carrying the gold on behalf of the said Mohammedbhai. Each one of them was given free return air tickets from Dubai and Mumbai for the said job. All the eight persons were mere carriers and brought the gold on the same conditions at the instance and for and on behalf of the said Mohammedbhai at Dubai. All received foreign exchange from said Mohammedbhai for payment of customs duty for clearance of gold. All the gold biscuits totalling to 336 weighed approximately 40 kgs." It is further stated that as per the direction of said Mohammedbhai, all the eight petitioners handed over the gold biscuits, after the customs clearance to said Shri Suresh Jain in the vicinity of the airport area. Said Shri Suresh Jain was waiting to collect the said gold biscuits as representative of said Mr. Mohammedbhai of Dubai. It is asserted that Suresh Jain was not a bona fide purchaser of gold. He was only receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statement of Shri Suresh Jain, it was further revealed that upon the instructions of Mr. Mohammedbhai of Dubai, he used to receive the gold from the passengers and hand it over to the representative of Mohammedbhai in Mumbai as per his instructions who in turn, were directly sending the sale proceeds of the gold back to Mr. Mohammedbhai in Dubai. The petitioners have stated that even on earlier occasions they have cleared about 5 kgs. of gold in similar manner. It is asserted in the affidavits, that thus it is clear that the petitioners were mere carriers working in syndicate which deals illegally importing gold without having any support of import licences, thus contravening the Customs Act, Foreign Trade (Development and Regulation) Act, 1992, Section 9 of the Foreign Exchange Regulation Act, 1973, and scheme appears to be illegally importing huge quantity of gold and to sell the gold in Indian market and to remit the realized price back to Dubai in foreign currencies. It is submitted that the correct interpretation of the notification is that the passenger who carries any goods in his package is required to file ownership declaration. 4.In further affidavit, it is asserted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eem Car which was confiscated from the possession of said Shri Suresh Jain. 6.Dr. Kantawala, the learned Counsel appearing for all the petitioners urged that in fact, issuance of the notice of show cause during the pendency of the petitions and when the petitions were in fact set out for hearing, is clear case of contempt and Court should take very serious view of the matter and the respondents may be made to face the consequences of their act of contempt. Shri Dada, learned Additional Solicitor General, appearing for the respondents-authority on the other hand, contended that when the learned Single Judge admitted the petitions, the learned Single Judge expressly refused the interim relief. Referring to provisions of Section 110(2) of the Customs Act, Shri Dada submitted that the gold was seized with a view to confiscate and unless notice was issued within six months under the provisions of Section 110(2), it would have been required to be returned to the persons from whose possession the same was seized. Shri Dada submitted that if the authorities under the provisions of the Act issued show cause notice which is absolutely necessary before adjudication proceedings could commenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the petitioners have retracted their statements and statements recorded by the Customs Authority under the provisions of Section 108 of the Customs Act were extracted under the duress and by coercion. 9.Shri Dada, learned Additional Solicitor General, on the other hand, emphasised the fact that as per the record and as per the respondents-authority the gold was not seized from any one of the petitioners at all, but the gold was seized from the possession of said Shri Suresh Jain, and said Suresh Jain not being the petitioner before the Court, there is no question of returning the gold to any one of the petitioners. Shri Dada then referred to the averments in paragraph 6 of the petitions and averments of the respondents in para 4 of their affidavits in reply. Shri Dada submitted that notification cannot be read in isolation which has to be read along with the Customs Act, FERA Regulation and Import and Export Regulation Act. Shri Dada then referred to several notifications and orders as well as several Sections of the Customs Act, FERA and Foreign Trade (Development and Regulation) Act, 1992. Shri Dada in substance contended that if the preparation of abetment or attempt to comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like to make a reference now to the judgment on which heavy reliance was placed by Dr. Kantawala. The very first judgment relied upon by Dr. Kantawala is the judgment of the Division Bench of this Court reported in 1994 (71) E.L.T. 349 in the case of Abdulla Kalingal Andu v. Union of India. The judgment being very short containing only two paragraphs, it is reproduced in its entirety as under : "Shri R.M. Agarwal, learned Counsel appearing for the Respondents, on taking instructions, states that the ownership of gold and silver is not a criterion for its eligibility to be imported by the passenger under the Gold Import Scheme. Accordingly incoming passengers can import the gold so long as they satisfy the conditions of stay abroad and those relating to payment of duty in foreign exchange. In view of the above statement. the present prosecution does not survive and the petitioner is entitled for order of discharge. The prosecution sought to be initiated to stand cancelled and cash security, if paid, will be returned to the petitioner. Similarly gold and silver seized from possession of the petitioner including related documents and passport be returned to the petitioner forthwit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant to notice that according to the petitioners, the gold was seized from the possession of the petitioners themselves whereas, it is categorical case of the respondent-authorities that gold was physically seized from the possession of said Shri Suresh Jain after each of the petitioners handed over the said gold to Shri Suresh Jain. Undoubtedly, once the goods are cleared in a normal circumstance without the order of clearance being set aside the order or without there being order of setting aside in revision in contemplation as stated by the Division Bench, the goods could not be confiscated. However, even the cleared goods if they are subject matter of the commission of offence under any other law, if so permitted can be confiscated in accordance with law. In the facts and circumstances of the case before us, we are of the clear opinion that it is the case of the respondent-authorities firstly that it is Shri Mohammedbhai who is the real importer and secondly in any case, after the gold was handed over to Shri Suresh Jain in view of the statement of Shri Suresh Jain, it is clear that the huge quantity of the gold was being imported by this modus operandi in India, with a view to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n prohibited under Section 11 of the Customs Act, 1962 and the provisions of that Act shall have effect accordingly. 14.Turning to the provisions of Foreign Exchange Regulation Act, 1973, Section 9 provides that save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally, by the Reserve Bank, no person in, or resident in, India shall - (a) make any payment to or for the credit of any person resident outside India; (b)- (c)- make any payment to or for the credit of any person by order(d) or in behalf of any person resident outside India ; Section 50 of FERA provides for penalty for contravention of the Rules, Orders, Directions etc. as provided therein. Section 56 provides for offences and prosecutions. Section 64 of the FERA is extremely relevant, which provides that whoever makes preparation to contravene any provisions of this Act, [other than Section 13, Clause (a) of sub-section (1) of Section 18, Section 18A Clause (a) of sub-section (1) of Section 19, sub-section (2) of Section 44 and Sections 57 and 58] or any rule, direction or order made thereund ..... X X X X Extracts X X X X X X X X Extracts X X X X
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