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TMI Blog2004 (2) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... URT] . Applying the above maxim as laid down by the Apex Court to the present case, it is observed that the department by adducing circumstantial evidence has brought out that restricted/prohibited goods were brought into the country without a valid licence. Rajendrabhai's attempt to prove the licit origin of the silver as discussed above has several loopholes. Just to mention a few one may revert back to his statement read with Hemubhai's (the worker of the refinery) statement dated 25-12-1990. Hemubhai says that Rajendrabhai has asked him to unload the silver and attend to its melting. This was on 25th itself. Rajendrabhai says that he was in possession of bills for the purchase of the silver on 25th. If that were to be so, there is no reason why he has not disclosed this fact to his worker or for that matter to his nephew whom he has asked to go and attend the work in the refinery on 25th. If he has disclosed the fact of purchase of silver to these persons, their statements would have been to the effect that the silver in question was sent by the owner of the refinery through his driver. Hemubhai would not have stated that an unknown person has delivered the silver. He w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilver - 999 was noticed. 3. The search of the premises was conducted in the presence of three workers of the Refinery. Ajaybhai Shashikantbhai Parekh the nephew of the owner of the Refinery and the panch witnesses. The person in charge of the Refinery at the material time, Shri Ajay did not have any documents evidencing legal importation of the said silver. The officers seized the said silver under Section 110 of the Customs Act, on the reasonable beliefs that it was smuggled into the country. 4. It is obvious that the seized silver bars did not have any foreign markings on them. Whatever reasonable belief the officers entertained that the silver was liable to confiscation under the Customs Act was formed on the basis of the circumstances under which silver was found in the refinery, the averments made by Shri Ajay, when the officers questioned him during their visit and his subsequent statement made under Section 108 before the officers. Shri Ajay Parekh admitted that the 704 silver chorsas were made out of 10 silver bars with foreign markings. 5. The statements made by the three workers 1. Hemubhai Babubhai Thakore 2. Manubhai Dagibhai Masani and 3. Bhairambhai Jivanbhai Prajapat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be imported into the country except with the express permission of the RBI as per the import/export policy. It is also clear that silver is not notified under Section 123 of the Customs Act in which event, the burden to prove that it is not smuggled into the country is not on the person from which possession it is seized nor is it on the person who claims himself to be the owner. 9. To complete the narration one has to revert back to the statement of the owner of the refinery Shri Rajubhai (Rajendrabhai J. Parekh) dated 12-1-91. The seizure worth of Rs. 22 lakhs took place in his refinery on 25-12-90. He was informed about it on 26-12-90 by his wife when his house was searched. But according to him he had good and sufficient reason to make himself scarce till 12-1-1991. 10. The sequence of events according to him were that on 23-12-90 he felt an urgent need to buy silver. He set off in his ambassador car No. GBN 1585 all by himself, to Delhi, reached it sometime between 8.30 to 9 A.M. on 24th, met one Shri Badrinarayan Sharma of M/s. Dhancholia Sons around 11 A.M., purchased 10 silver bars (5+5) valued at Rs. 23,20,030/- on credit, proceeded to come back to Ahmedabad on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Commissioner in the impugned order gave the following findings:- (a) The silver which was melted in the refinery on 25-12-90 and converted into chorsas was of foreign origin according to the statement made by Ajaybhai. His routine retraction before the CMM was not supported by any evidence of coercion or duress as alleged by him and the CMM did not take any cognisance of it while deciding the bail application. Nor did the Magistrate order any enquiry into the allegations made against the officers by Ajay Parekh. (b) There is no allegation in the bail application that the panchnama was drawn anywhere other than in Kamal refinery. The contents of the panchnama were not found to be false. (c) One Ajay Parekh admitted that the silver bars (10 in all) had foreign markings there was no need for the department to enquire what sort of foreign markings were found on the bars. (d) Shri Rajendra Parekh, the owner of the refinery, stated that he purchased 10 silver bar from Delhi reaching Delhi on 24th, brought them back to Ahmedabad and asked his driver to take them to the refinery. The whole transaction appeared to have taken place on credit basis even though Rajendrabhai was transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marking and should not have been relied upon. 16. The statements made by the three workers in the refinery did not disclose that the silver was of foreign origin. Whatever they stated earlier was retracted when the bail application was moved before the Magistrate. 17. Rajendrabhai statement clearly shows that the silver was purchased at Delhi. He explained each and every circumstance that was alleged to be against him. The department has no evidence that the silver in question was smuggled for it to confiscate it under Section 111(d) read with Section 120 of the Customs Act. 18. The appellants were discharged under Section 245(1) of Cr.P.C. in the criminal protection launched against them. The department's criminal revision application against the discharge did not meet with any success. The appellants were released from detention under COFEPOSA as the Advisory Board did not fixed sufficient evidence that they were dealing in smuggled silver. The discharge of the appellants clearly shows that not even prima facie case exists against them. The Commissioner was not correct in holding that the allegation levelled against the appellants were established when on the same evidence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es embossed by the refinery workers on the chorsas. That did not however mean that the officers could not ask the person in charge of the refinery as to where from and how the silver was acquired. Burden of proof being on the officer to prove the smuggled nature of the goods does not however take away the powers to investigate cases. It is the person who was in charge, Ajay, who informed the officers in the presence of panchas as well as in his statement dated 25-12-1990 that the silver bars (10) had foreign markings. What kind of markings they were he alone knew, but he chose to say that the silver before melting had foreign markings Coupled with the intelligence gathered by the officers, the statement of Ajay became significant in forming a reasonable belief that the silver in question is of foreign origin. Add to this situation that no entries in the stock register maintained in the refinery were made regarding the receipt of the silver and the person concerned was not in a position to produce any document for its legal possession except saying that some unknown person delivered the silver to the refinery workers before his arrival. The officers would have more than sufficient r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later the owner of the refinery and in this case the owner of the silver itself who has attempted to prove that the said silver was purchased legally from a Delhi bullion dealer. The show cause notice clearly brings out how this theory of purchase has several short-comings. The Commissioner in his order deals with the aspect in a detailed fashion. In his statement dated 12-1-1991, (seizure of the silver was on 25-12-1990) says that he rushed in his car to Delhi to purchase the silver on 23rd December 1990, purchased it on 24th, returned to Ahmedabad in his car and reached there on 25-12-1990. If that were to be so, he had in his possession proof of legal acquisition on 25-12-1990 itself. He came to know of the seizure on 26th when he was at Jetpur but chose not to clarify the matter till 12-1-1991. The reason stated was that he fell sick (typhoid) on 26th December and had no occasion to send the proof or answer the summons. This version has its own drawback. Property worth Rs. 23 lakhs legally belonging to him was seized and he does not bat an eyelid to prove that something close to terrible miscarriage of justice had taken place. The Tribunal has observed that belated production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the present case, it is observed that the department by adducing circumstantial evidence has brought out that restricted/prohibited goods were brought into the country without a valid licence. Rajendrabhai's attempt to prove the licit origin of the silver as discussed above has several loopholes. Just to mention a few one may revert back to his statement read with Hemubhai's (the worker of the refinery) statement dated 25-12-1990. Hemubhai says that Rajendrabhai has asked him to unload the silver and attend to its melting. This was on 25th itself. Rajendrabhai says that he was in possession of bills for the purchase of the silver on 25th. If that were to be so, there is no reason why he has not disclosed this fact to his worker or for that matter to his nephew whom he has asked to go and attend the work in the refinery on 25th. If he has disclosed the fact of purchase of silver to these persons, their statements would have been to the effect that the silver in question was sent by the owner of the refinery through his driver. Hemubhai would not have stated that an unknown person has delivered the silver. He would have said the unknown person was none other than the dri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilver at Delhi, prima facie it appears doubtful that he did but that state does not establish the nexus between what is seized by the department and the one alleged to have been acquired at Delhi. The Apex Court also observed that for weighing evidence and drawing inference from it there can be no canon. Each case presents its own particulars and in real common sense and shrewdness must be brought into play. 31. In Labhchand Dhanpat Singh Jain v. State of Maharashtra, AIR 1975 SC 182, the Apex Court observed that even in the absence of direct evidence, the character of goods recovered as well as the guilty knowledge of the accused could be inferred from circumstantial evidence. 32. The ratio laid down by the Supreme Court on various occasions seemed to have not been appreciated by the lower courts. The present case is not such that no circumstantial evidence exists to establish the illicit origin. Once Ajay Parekh stated that the silver he dealt with had foreign markings, he has to also tell the department how he acquired it legally. Rajendrabhai's explanation being what it is, the department rightly discarded his theory. 33. The learned advocate stressed on the contention that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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