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K.i. Pavunni Vs. Collector of Customs and Central - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(5)LC1757Tri(Chennai)
AppellantK.i. Pavunni
RespondentCollector of Customs and Central
Excerpt:
.....collector of customs and central excise, cochin, referred to supra, absolutely confiscating 200 gold bars with foreign markings under section 111(d) of the customs act, 1962, read with section 3 (2) of the import and export (control) act, 1947 and sections 8 (1) and 23 a of the foreign exchange regulation act read with notification no. 12 (ii) f-l/48 dated 25-8-1948, as amended, besides imposition of a penalty of rs. 8 lakhs on the appellant under section 112(b) of the customs act, 1962.3. on prior information and in pursuance of a search warrant issued by the assistant collector, c.i.u., headquarters office, cochin, the superintendent of customs, cochin, with his staff searched the residential premises of the appellant at no. 41/840-a, st. vincent's cross road, ernakulam on.....
Judgment:
1. Since the above appeals arise out of a single transaction and the evidence is common, they are taken up together at the request of the parties and disposed of together. For the purpose of convenience we shall first take up the appeal arising out of the Customs Act, 1962.

This is a transferred case in terms of Section 131B of the Customs Act, 1962 and is directed against the order of the Collector of Customs and Central Excise, Cochin, referred to supra, absolutely confiscating 200 gold bars with foreign markings under Section 111(d) of the Customs Act, 1962, read with Section 3 (2) of the Import and Export (Control) Act, 1947 and Sections 8 (1) and 23 A of the Foreign Exchange Regulation Act read with Notification No. 12 (ii) F-l/48 dated 25-8-1948, as amended, besides imposition of a penalty of Rs. 8 lakhs on the appellant under Section 112(b) of the Customs Act, 1962.

3. On prior information and in pursuance of a search warrant issued by the Assistant Collector, C.I.U., Headquarters Office, Cochin, the Superintendent of Customs, Cochin, with his staff searched the residential premises of the appellant at No. 41/840-A, St. Vincent's Cross Road, Ernakulam on 6-12-1980. During the course of the search the authorities recovered a wooden box kept buried under earth about 2 feet away from the northern wall of the prayer room of the house. The box on examination was found to contain 200 gold bars in biscuit shape, out of which 155 bars bore the markings" CREDIT SUISSE 9990-10 Tolas CHI ESSAYER FOUNDEUR" and 45 numbers had markings JOHNSON MATHEY 9990-10 TOLAS LONDON". The purity and weight of the gold was respectively verified and ascertained as 24 ct. and 23,200 gms. The said gold bars were seized by authorities as per law under mahazar attested by witnesses besides the appellant himself. The appellant gave a statement before the authorities on 7-12-1980 admitting ownership of the gold bars under seizure. It is in these circumstances, after further investigation, proceedings were instituted against the appellant which eventually culminated in the impugned order now appealed against.

4. The learned counsel for the appellant submitted as follows inter alia : 1. Though the recovery and seizure of the gold bars from the residential compound of the appellant is not disputed, the materials on record do not warrant an inference that the appellant was in conscious, intelligent possession of the same and therefore, imposition of a penalty on the appellant is not legally sustainable.

2. The statement recorded from the appellant by the authorities on 7-12-1980 which is inclupatory in nature and confessional in character was assailed on the ground that the same is not voluntary and true, and was brought about under duress and in detention.

3. The adjudicating authority is in error to have invoked the presumption under Section 123 of the Act against the appellant when no such presumption can be drawn against the appellant as the gold bars under seizure were not recovered from his possession.

4. No reliance under law can be placed on the statement of M.P. Poulose who is in the position of an accomplice.

5. The appellant having retracted and resiled from his confessional statement, the same has no evidentiary value.

1. The statement recorded from the appellant on 7-12-1980 is clearly confessional in nature and has been rightly accepted and acted upon by the adjudicating authority.

2. The appellant did not retract the confessional statement immediately nor did he make any grievance of any coercion and illegal detention by the authorities to any authority, much less before the Judicial Magistrate when he was taken for remand and this would only establish that the statement recorded from the appellant was voluntary and true.

3. Though the appellant retracted the confession on 15-12-1980, no convincing satisfactory explanation was offered for such belated retraction.

4. The statement recorded from Poulose is clearly admissible in law and implicates the appellant.

5. Regarding the applicability of the presumption under Section 123 of the Customs Act against the appellant it was urged that the appellant being admittedly the owner of the residential building and compound and the recovery of the gold bars being from underneath the earth 2 feet away from the northern wall of the appellant's house in the closest vicinity of his prayer room, it must be construed that the recovery was from the appellant's possession within the meaning of Section 123 of the Act.

6. We have carefully considered the submissions of the parties herein.

The admitted fact remains that a substantial quantity of gold bars with foreign markings were recovered from the residential compound of the appellant. The appellant does not claim any ownership of the gold bars under seizure and indeed pleaded total ignorance and complete want of knowledge about the very presence of the gold bars in his residential compound and challenged the leviability of any penalty on him under law. The confiscation of the gold bars under the impugned order is not challenged by the appellant. The important question that falls for our determination is whether the appellant had acquired possession of the gold bars under seizure or in any way concerned with harbouring, keeping or connected with the same. One of the important pieces of evidence on which reliance is placed by the Department is the statement of the appellant himself given before the authorities on 7-12-1980. In the statement dated 7-12-1980 given before the authorities, the appellant has admitted that the gold bars with foreign markings under seizure were purchased by him 10 years back with his own earnings and possessed and preserved by him. The appellant further stated that the gold bars were so purchased by him by investing about Rs. 4 lakhs through one Thadi Hassan. The said gold bars, according to the statement of the appellant referred to supra, were kept buried in his previous residential compound and in the same wooden box from which it was seized. The appellant has also explained that the wooden box in question was made through is friend Poulose who knew about the gold bars kept buried under the appellant's residential compound. When the appellant constructed a new residential house, the gold bars were removed to the same and kept inside the new house for a day and later on the next day they were buried in the place wherefrom they were unearthed.

7. If this inculpatory statement of the appellant is clearly confessional in nature and if the same is proved and established under law to be true and voluntary, it cannot be gainsaid that the appellant would be guilty of the charges levelled against him under the impugned order. We find considerable force in the submissions of the counsel for the appellant that notwithstanding the fact that the seizure was effected on 6-12-1980 and a mahazar was drawn up by 6.30 P.M., no statement at all was recorded from the appellant till 9-30 A.M. on 7-12-1980, though according to the evidence on record and according to the Department the appellant was willing to give a statement about the gold bars in question. In expatiating on this submission for a considerable length of time, the learned counsel was at pains to explain that the appellant was taken by the authorities to the Customs office by about 1.30 P.M. on 6-12-1980 and was detained there during the night and the confessional statement was recorded only on 7-12-1980 between 9.30 A.M. and 5 P.M. It was contended that the alleged confessional statement which has seen the light of day after the appellant was kept in a state of detention in the Customs office for the whole night on 6-12-1980 would falsify the Department's case that the statement of the appellant was voluntary and true. If really the appellant was in a frame of mind to give a statement before the authorities regarding the gold bars under seizure, one would expect the authorities to immediately record a statement from the appellant and the explanation of the Superintendent that he was busy with safeguarding the huge quantity of gold bars under seizure and also in questioning the servants of the appellant and others is too artificial and incredible to merit acceptance. It passes our comprehension as to why the appellant had to stay for the whole night of 6-12-1980 in the Customs Office when his house was hardly half a kilometere away from there and so the inference is inescapable that the appellant was not in a state of freedom. It does not also stand to reason as to why no statement was at all recorded even in the morning of 7-12-1980 till about 9 A.M. and as the learned counsel submitted this circumstance would clearly show that the appellant could never have offered to give any statement at all and evidently by being kept in a state of detention in the Custom House for the whole night of 6-12-1980 and also till 9 A.M. on 7-12-1980, the appellant should have been pressurised and coerced into giving a statement against his interests.

Notwithstanding the fact that the contessional statement is admittedly in the hand-writing of the appellant himself, and as contended by the learned SDR it contains a plethora of factual details which by no stretch of imagination could be characterised as the figment of the officer's imagination. The confessional statment would lose all its value and worth if the same is proved to have been brought into existence after the appellant was detained de facto for a considerable length of time in the office of the Customs House. It might be contended that the mention of the name Thady Hassan as the one through whom the gold bars were purchased about 10 years prior to seizure, the purchase of the land by sale deed Nos. 1975/1-1052 and 1975/1-1053 dated 5-5-1975 where the appellant constructed a new residence, the fact of his occupation of the same on 21-5-1978, the approval of the plan of the new house before construction by the Cochin Corporation on 7-10-1976, the particulars of various other properties with precise details purchased and belonging to the appellant are all facts which could not be invented or fabricated by authorities and incorporated in the appellant's statement unless the appellant as a matter of fact had stated so before the authorities and mere delay in recording the statement of the appellant would not be the sole criterion on the basis of which the statement itself can be stigmatised as one brought into existence during detention and under coercion. The learned counsel submitted that inasmuch as the appellant was accompanied by the Assistant Collector and Customs Superintendent when he was produced for remand before the Judicial Magistrate, the appellant was overawed by their presence and could not complain against them. It was also stated by the learned counsel that the appellant did not choose to complain since he was made to understand that if he did complain against the officers, his application for bail would be opposed. This plea of the Appellant appears to us to be probable. But one should remind oneself of the axiomatic proposition of law that even if truth were to be extracted by blandishment, coax, coercion, threat or inducement by a person in authority, the same would be hit by Section 24 of the Evidence Act and would cease to be voluntary and in such a situation there is no alternative to a court of law except to reject the same brevi menu. References may usefully be made in this connection to the ratio decidendi in the rulings of the Supreme Court reported in :State of Uttar Pradesh v. Deoman Upadhyaye.

2. 1978 (3) Supreme Court Cases 435- Sankaraiah v. State of Rajasthan.

The circumstances under which the appellant was kept though unofficially, in the Customs House for a long spell of time and an inculpatory statement emerging after such a detention do not inspire any confidence in our mind about the voluntary nature of the same. It is indeed strange that the appellant from whose residential compound a large quantity of gold bars was unearthed should have felt fascinated to spend a whole night in the company of Custom Officers in the Custom House leaving his wife and grown up daughter alone in the house. We therefore reject the inculpatory statement recorded from the appellant as not voluntary. The learned counsel submitted that since the authorities were holding out a threat that the appellant's wife would be examined, the appellant did not complain against the Customs authorities apprehending that they might proceed against his wife as well. The fact remains that the appellant's wife was examined on 12-12-1980 and the appellant chose to retract or resile from his inculpatory statement on 15-12-1980. We are therefore inclined to accept the Appellant's explanation for belated retraction if any in the context and circumstances of this case. We therefore hold that the statement recorded from the appellant and referred to supra is not voluntary and does not merit acceptance. It therefore follows as a matter of logical corollary that there is no evidence to indicate that the appellant had corpus possessionis or animus possidendi in respect of the gold bars under seizure. Before parting with this aspect of the case, we would like to observe that the action of the Superintendent in not having recorded immediately the statement of the appellant is none too commendable and leaves very much to be desired to say the least of it. We also fail to understand why the appellant had to stay in the Custom House throughout the night on 6-12-1980. Indeed the various judicial pronouncements have condemned in strongest terms such de facto detention for a long spell of hours of persons by authorities under the guise of interrogation, eroding the value of human liberty enshrined in the Article 21 of the Constitution of India.

8. Regarding the applicability of the presumption under Section 123 of the Act, having regard to the fact that the gold bars under seizure were recovered from the backyard of the appellants's house from underneath the earth, the same could not be said to be a recovery from the possession of the appellant within the meaning of Section 123 of the Act. The contention of the learned SDR that in the context of the recovery of the gold bars near the northern wall of the residence of the appellant in the closest vicinity of the prayer room, the recovery must be construed under law to be from the possession of the appellant is not legally tenable. In our opinion, Section 123 of the Act fastens a statutory presumption against the person from whose possession foreign gold or other notified item is recovered that it is a smuggled one unless the contrary is proved by the person himself. We are not inclined to adopt a very comprehensive connotation for the word 'possession' occurring in Section 123 of the Act so as to take within its ambit and include even recoveries from the backyard of a person's house and to equate it with a recovery from a person's possession. The learned counsel drew our attention to the relevant portion in the impugned order and contended that even the adjudicating authority himself has been doubtful about the applicability of Section 123. The adjudicating authority has found the contention of the appellant that the mere fact of recovery of incriminating articles found buried under the residential compound of the appellant cannot give raise to any legal presumption that the same was buried by the person having the ownership of the property "apparently acceptable" ; yet he chose to invoke the presumption under Section 123 from other circumstances. We are not inclined to accept this part of the reasoning of the learned Collector in the impugned order with reference to the applicability of Section 123 and we therefore hold that in the instant case, the presumption incorporated in Section 123 of the Act is not applicable and cannot be invoked by the Department against the appellant. We have therefore to consider the charge against the appellant de hors the applicability of Section 123 of the Act.

9. The learned counsel contended that Poulose, being in the position of an accomplice, is the main person concerned in the gold bars under seizure and he has implicated the appellant in a bid to extricate himself from the clutches of law. We note that Poulose has also been proceeded against by the authorities and a penalty has also been imposed on him. The appellant's contention that Poulose was a close family friend and was in charge of the construction of the appellant's residence and has conveniently exploited this situation to his advantage in concealing the gold bars in the appellant's residential compound does not appear to be altogether improbable. Be that as it may, having regard to the finding we have given regarding the acceptability of the statement recorded from the appellant, coupled with the inapplicability of the presumption under Section 123 of the Act against the appellant, we do not think it relevant to go into the question with reference to the exact role played by Poulose who has not filed any appeal against the penalty imposed on him.

10. Even in criminal jurisprudence though the evidence of an accomplice is entitled to consideration the same should be corroborated in material particulars. In adjudication proceedings even if a person were to occupy the position of an accomplice, his evidence would certainly be entitled to consideration, though, of course, the adjudicating authority should scrutinise the same with great caution before acceptance. In the instant case, mere recovery of the gold bars from the residential compound of the appellant, and the statement of Poulose an accomplice would not be adequate in law for bringing home the charge against the appellant. Even at the worst for the appellant the evidence on record against him would merely engender a suspicion in our mind about his guilt in relation to the recovery of the gold under seizure and suspicion, however grave it might be cannot evidently take the place of proof and the appellant would be entitled to the benefit of doubt in such circumstances.

11. On consideration of the entire materials on record, we feel persuaded to hold that the finding of the adjudicating authority against the appellant is not sustainable in law and by giving the appellant the benefit of doubt we allow the appeal.

This is a transferred case in terms of Section 82K of the Gold Control Act and is directed against the order of the Collector of Customs and Central Excise, Cochin, dated 18-1-1982 in C. No. XVII/8/3/81 G.C. Adj. imposing a penalty of Rs. 2 lakhs on the appellant under Section 74 of the Act.

13. The learned counsel for the appellant did not advance any further arguments in this appeal and merely adopted the arguments advanced in CD(T) 197/82 referred to supra.

14. The appellant admittedly is not a gold dealer or a person entitled under law to possess primary gold in the shape of gold bars of 24 ct.

purity. The gold bars under seizure are admittedly primary gold of 24 ct. purity. Nevertheless for the reasons given by us in appeal CD 197/82 we hold that there is no evidence on record to prove that the appellant acquired ownership and control of the gold bars under seizure in contravention of Section 8(1) of the Act. We accordingly giving the appellant the benefit of doubt vacate the findings of the adjudicating authority under the impugned order and allow the appeal.


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