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Shri Lakshmi Chand Vs. the Collector of Customs and - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Judge
Reported in(1983)LC375DTri(Delhi)
AppellantShri Lakshmi Chand
RespondentThe Collector of Customs and
Excerpt:
.....and the gold (control) act for offences relating to the impugned foreign gold. confiscation of the gold/currency are not in issue there. nor have those proceedings a bearing on the question of penalty as a result of adjudication. this appeal need not, therefore, await the outcome of the prosecution.6. the tribunal notes that the departmental officers searched the appellant's residential premises on the basis of a reasonable belief and successfully recovered foreign marked gold. the appellant has not established any case that the first floor room as accessible to others to whom the said gold could have belonged. merely raising a conjecture in this regard does not help. in fact, keeping it under the almirah could very well indicate the safeness of the room and the very unexpectedness of.....
Judgment:
1. This is a Revision Petition transferred to the Tribunal for disposal as an appeal in terms of Section 82-K of the Gold Control Act.

2. The undisputed facts are that, acting on information that the appellant was dealing in contraband gold, a search was conducted of his business and residential premises on 18.9.73 and gold, Indian currency and incriminating documents were recovered. As a result of adjudication, 7 biscuits of foreign gold weighing 816.599 gms. and 7 cut pieces of foreign gold weighing 211.800gms. were confiscated by the Deputy Collector under Section 111 (d); a penalty of Rs. 8000/ - was imposed on the Appellant under Section 112; and the currency amounting to Rs. 22,000/- was confiscated under Section 121 of the Customs Act, 1962 An appeal was filed against this order but it was rejected. The Appellate Collector held that the recovery of the gold from his house was not denied by the Appellant and he had admitted supply of gold in cut pieces in his statement following the seizure. It was not believable that the gold could have been planted, considering the quantity. As regards the currency, it was significant that it was recovered from the iron safe containing gold and gold ornaments, his stock in trade, along with daramkanta receipts and it is not convincing that his married daughter, living at Calcutta, would have kept her currency in the appellant's almirah.

3. The case was heard on 21st January, 1983. Arguing for the Appellant, Shri Ganesan stated that the recovery of gold bars and pieces was from a cloth bag under an almirah in the first room, while from the iron safe in the kitchen, sovereigns, crude gold ornaments, broken ornaments and currency were recovered. The Appellant was arrested and released on bail after two days when he immediately sent a telegram denying the voluntary nature of his statement in which he admitted purchasing gold bars and cutting one bar to give a customer and that the currency was the sale proceeds, etc. Since the recovery of gold bars/ pieces was from an open space accessible to all and the petitioner was living in a joint family, he could not be held to have exclusive possession. He relied on a son, Radha Krishna, was acquitted because some articles belonging to him were recovered from an almirah of which his father had the key. In that case it was held that the prosecution had failed to prove exclusive possession. Similarly, in AIR 1972 Mysore 329, conscious possession was not held proved where contraband gold was found in an unlocked drawer of a cupboard in a house which was also inhabited by other members of the joint family along with the accused. As regards the statement, it should not have been relied upon, not being voluntary. Delhi High Court decided on 22.5.78, in Satish Chand Gupta's case, that any statement would not be the sole basis for proceeding against a party, in the absence of material corroboration. The Counsel also submitted that there was no nexus between the currency recovered and the cut pieces of gold. They were not even found together. No personal hearing was granted as required at Agra before deciding the case. The letters/affidavits claiming the amounts by his daughter and wife have also been accepted by the Income-tax authorities. The Counsel, therefore, pleaded that the currency should be released and the penalty set aside or at least the currency released and the penalty reduced.

4. Shri Yuvraj Gupta, for the Department submitted that in the case of S.C. Gupta, the statement was recorded by Enforcement and not Customs Officers. In that case, the recovery witnesses had contradicted the recovery memo, hence this judgment was not relevant. Moreover, the statement in the present case was recorded in his own hand by the appellant. The recovery was also from the first floor of his residence, which is not easily accessible and no evidence regarding other joint family members residing there was adduced. While it is true that in his original statement he said a portion of the currency belonged to his wife, it was only later that he claimed it was the sale proceeds of silver. The Income Tax assessment was also not relevant as it was a reopened case and there was no evidence of gift tax having been paid by his daughter's mother-in-law. The Appellant did not avail of the opportunity of personal hearing and on flimsy grounds did not produce his wife when summoned. His statement was recorded in the presence of two Superintendents and the judgment in the case of Anand Kumar is not applicable as the appellant had guilty knowledge. Similarly, in the case of Radha Krishna, the key was with his father while in this case the possibility of the gold being planted is non-existent. The Senior Departmental Representative wanted the appeal to be rejected. In rebuttal, Counsel submitted that Section 123 does not apply to currency and the burden of proof that it was the sale proceeds of smuggled gold has to be discharged by the Department before confiscating it under Section 121.

5. The Tribunal is informed that the Appellant is being prosecuted under the Customs Act and the Gold (Control) Act for offences relating to the impugned foreign gold. Confiscation of the gold/currency are not in issue there. Nor have those proceedings a bearing on the question of penalty as a result of adjudication. This appeal need not, therefore, await the outcome of the prosecution.

6. The Tribunal notes that the Departmental Officers searched the Appellant's residential premises on the basis of a reasonable belief and successfully recovered foreign marked gold. The Appellant has not established any case that the first floor room as accessible to others to whom the said gold could have belonged. Merely raising a conjecture in this regard does not help. In fact, keeping it under the almirah could very well indicate the safeness of the room and the very unexpectedness of the place would enhance its safety. The voluntary nature of the statement given, in his own hand, by the Appellant need not also be doubted, according as it does with attendant circumstances.

Significantly, while allocating a portion of the currency to his wife and daughter at the time of seizure, he furnished no corroborative details at that time, which makes his claim rather hollow. That the Income-tax authorities were satisfied on this score need not necessarily controvert the Department's case that the currency was in fact the proceeds of smuggled gold. There is reasonable nexus between the weight of the missing pieces, their value at the material time and the amount of currency recovered. The appellant did not also avail of the opportunity of personal hearing, despite the large stake involved on grounds not wholly convincing, and this detracts from the value of his defence. For these reasons we see no merit in the contentions of the appellant and hold that the Appellate Collector rightly rejected his appeal.

7. In these circumstances, this appeal must fail and the Tribunal rejects it.


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