1. Appeals under Section 81 of the Gold (Control) Act, 1968 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the collector of Central Excise, Madras in C.No. XVII/8/46/79-GC(Adj), dated 22-9-1980.
2. These appeals coming up for orders upon perusing the records and upon hearing the arguments of Shri L. Suganchand Jain, Advocate for the appellants, and upon hearing the arguments of Shri A. Vijayaraghavan, Departmental Representative for the respondent, the Tribunal makes the following order: 3. The above bunch of revision applications filed before the Gold Control Administrator have been transferred to the Tribunal in terms of Section 82K of the Gold (Control) Act, 1968, hereinafter called the Act, for being disposed of as appeals.
4. The above batch of appeals arise out of and are directed against a common order passed by the Collector of Central Excise, Madras, referred to supra, imposing a fine of Rs. 1,25,000 under Section 73 in lieu of confiscation of primary gold weighing 4533.400 gms. under Section 71(1) and a penalty of Rs. 50,000 on appellant Ramesh Babu and Rs. 10,000 each on appellants C.P. Ramakrishnan, C.P. Srinath, K.P.Sarathy, S. Venkatesan under Section 74 and rejecting the claims of appellants V. Munirajaiah, A.K. Ranganatha Chettiar, K. Balagurunathan, V.M. Gopalakrishnan Chettiar, D.R. Chakrapani Chettiar, C.P.Ravindranath, C.P. Srinath, C.P. Ramakrishnan and Smt. Indirabai.
5. The brief facts leading to the appeals are as follows. On 8-6-1979, the officers attached to Customs Preventive Unit, Coimbatore, while patrolling at Uppilipalayam bus stop at Coimbatore, found appellant Ramesh getting out of a bus bound for Coimbatore from Erode, in a suspicious manner and on interrogation and search recovered from his person and his baggage, a hand bag and also a cloth pouch tied around his waist, containing a total quantity of 4553.400 gms. of gold pellets and bits in primary form as detailed in the original order, along with certain chits. These were seized under cover of a mahazar attested by independent witnesses as per law. On examination, appellant Ramesh Babu admitted transporting primary gold under seizure and stated that he was a pawn broker residing at Vellore and recevied one big primary gold weighing 1260 gms. and two primary gold pellets weighing 244 gms. and 314.800 gms. from his relative, appellant C.P. Ramakrishnan of Vellore with instructions to hand over the same to appellant Venkatesan residing at Coimbatore. Likewise, the primary gold pellet weighing 1791 gms., according to appellant Ramesh Babu, was received by him from his relative appellant Srinath of Vellore for being handed over to appellant Sarathy of Coimbatore and the rest to be handed over to one Natarajan, a gold broker of Coimbatore. It was admitted by Ramesh Babu that on previous occasions he had been transporting primary gold for consideration. Investigation was conducted and appellants Venkatesan, Sarathy and one Natarajan of Coimbatore and appellants Ramakrishnan, Srinath and Padmanabha Chettiar of Vellore were also examined. On completion of investigation, show cause notices were issued to the appellants and the adjudication resulted in the impugned order now appealed against.
6. The learned counsel appearing for the appellants submitted that appellant Ramesh Babu was only acting in the capacity of a certified goldsmith in transporting primary gold for the manufacture of new ornaments and so the finding of the adjudicating authority of contravention of Sections 8(1) and 27, besides other charges under Sections 16, 17, 41, 42 and 55, are not legally sustainable. It was further urged that appellant Ramesh Babu being a certified goldsmith, a charge against him under Section 8(1) and Section 42 of the Act cannot co-exist. Since appellant Ramesh Babu was a certified goldsmith, it was contended that under Section 42 of the Act, he could possess standard gold bars up to 100 gms. or any quantity of primary gold not exceeding 300 gms. and as such, the excess quantity of primary gold found in his possession could only be characterised as a technical contravention of Section 42 and, therefore, the charge under Section 8(1) for possession simplicities of primary gold is misconceived. .It was urged that in the complete absence of any evidence that appellant Ramesh Babu refined any gold, he cannot be proceeded against for contravention of Section 17 of the Act. In expatiating on the above submissions, the learned counsel conceded the contravention of Section 42 so far as appellant Ramesh Babu is concerned. The finding of the adjudicating authority regarding a charge of contravention under Section 55 against appellant Ramesh Babu was also assailed as contrary to law on facts since entries of the gold under seizure have been made in the G.S. 13 accounts. The learned counsel assailed the impugned order on the ground that reliance should not have been placed on the confessional statement of appellant Ramesh Babu recorded on 8-9-1979, particularly when the same has been retracted by wire, followed by letters to the authorities. At any rate, when many claimants referred to above have put in claims as owners of the gold under seizure, confiscation of the same is statutorily prohibited by the proviso to Section 71 of the Act. The learned counsel cited certain authorities with reference to the legal effect of an acquittal rendered by a criminal court in a prosecution arising under the provisions of the Gold (Control) Act and certain rulings relating to the ratio to be applied in the matter of imposition of penalty by courts and tribunals which we shall advert to at the relevant place.
Finally, it was urged by the learned counsel that the imposition of penalty under the impugned order smacks of arbitrariness inasmuch as appellant Ramesh Babu, who, even according to the adjudicating authority, has played merely a role of a carrier for certain mercenary consideration, has been imposed with a higher penalty, while the alleged actual offenders who were instrumental in the transport and receipt of primary gold have been dealt with leniently.
7. The learned Departmental Representative at the outset clearly conceded that having regard to the facts and circumstances of this case and the materials available on record, the charges relating to the contravention of Sections 16, 17 and 55 of the Act cannot be said to be made out and therefore did not press the same. The learned Departmental Representative contended that Sections 40, 41 and 42 impose a statutory restriction on the acquisition or sale of gold by a certified goldsmith and the limit of primary gold which a certified goldsmith may possess.
In the instant case, the possession of primary gold being far in excess of the statutory limits prescribed under Section 42, the charges under Section 8(1) as well as Section 42 have been clearly made out. The learned DR urged that the primary gold under seizure is of 24 ct.
purity and appellant Ramesh Babu, having admittedly, according to his statement, acquired primary gold from persons who are not licensed dealers but only pawn brokers, contravention of Section 41(a)(ii) of the Act is directly attracted. Regarding the charge under Section 27, the learned DR drew our attention to the comprehensive definition of the term 'dealer' under Section 2(h) which takes within its ambit any person who carries on directly or otherwise the business of making, manufacturing, preparing, repairing, polishing, buying, selling, supplying, distributing, melting, processing or converting gold, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration, and submitted that the moment a person starts transporting primary gold for purposes of sale or purchase he will be a dealer within the meaning of Section 2(h) and such dealing without licence could constitute infraction of Section 27 of the Act. Having regard to the scope of Section 27 and the definition of the term 'dealer' under Section 2(h), coupled with the statement of appellant Venkatesan before the authorities on 11-9-79, clearly implicating appellant Ramesh Babu as one who was involved in the purchase and sale of gold, the charge under Section 27 has been clearly substantiated. The learned DR further submitted that all the claimants have been subsequently set up with a view to avert confiscation of the gold under seizure and if really the gold under seizure belonged to the various claimants, appellant Ramesh Babu would have at the earliest opportunity given the names of the various claimants and the petition of Ramesh Babu dated 13-9-79 does not give names of the claimants at all and, therefore, the claimants have been, according to the learned DR, thought of at a later point of time and were set up by appellant Ramesh Babu. The learned DR also submitted that the statements of appellants Sarathy, Venkatesan and Natarajan would corroborate the inculpatory statement of appellant Ramesh Babu.
8. We have carefully considered the submissions of the parties herein.
The fact of seizure does not admit of any controversy and is indeed admitted. The contention of the learned counsel for the appellants that appellant Ramesh Babu was merely carrying such a huge quantity of primary cold only in the capacity of a certified goldsmith and not as a carrier has to be only mentioned to be rejected as utterly devoid of merits. Appellant Ramesh Babu, having been found in possession of huge quantities of primary gold, has clearly confessed to the act of his transporting primary gold for consideration even on previous occasions from Vellore to Coimbatore and the attack on the statement of Ramesh Babu as not voluntary and extorted under circumstances of coercion is clearly untenable. It is not controverted that when appellant Ramesh Babu was taken for remand, he did not make any grievance at all before the Magistrate about any alleged act of extortion or coercion regarding the statement. The statement recorded from Ramesh Babu contains plethora of details and internal evidence which could never be the case if the statement had been concocted and extorted by the authorities during interrogation. On a perusal of the confessional statement of appellant Ramesh Babu, we arc convinced and satisfied that the same is voluntary and true. The mere fact that the earlier confessional statement was sought to be retracted at a later point of time would not detract from its acceptability and the retraction in the case is also not immediate but after some days. If really the statement had been forcibly taken out of Ramesh Babu, we would expect him to send a rejoinder at the earliest opportunity and it is common knowledge when one is lodged in sub-jail under the superintendence of revenue authorities, neither the police nor Customs has anything to do with the sub-jail prisoner and as such, appellant Ramesh Babu could have sent up a petition from the sub-jail itself retracting his earlier confessional statement if the same had been brought about under threat or coercion.
The learned counsel was not able to offer any explanation for this significant omission on the part of Ramesh Babu in not resiling from his confessional statement for several days when he was in the sub-jail. Apart from it, in the case of claimants also, it is not acceptable in view of the fact that appellant Ramesh Babu does not give out the names of the claimants in his petition dated 13-9-1979. No doubt, the learned counsel for the appellants drew our attention to the various petitions of the claimants dated 13-9-1979 and 14-9-79 and contended that when the claimants themselves had made a claim, the non-disclosure of the names of the claimants by appellant Ramesh Babu is not of any consequence at all. In our opinion, the mere ipse dixit of the claimants, in the circumstances of the case does not carry with us any conviction at all regarding their claim of ownership and such a claim of ownership will have to be satisfactorily established by convincing evidence under law, more particularly having regard to the statutory presumption incorporated under Section 99 of the Act that any person who is in his possession, custody or control of any primary gold or ornaments shall be presumed, unless the contrary is proved, to the owner thereof. In our view, the statutory presumption under Section 99 of the Act against the claimants has not been dispelled by acceptable cogent evidence or other materials.
9. The learned counsel for the appellants relied upon the case reported in AIR 1965 Madras 502--Shaik Kasim v. the Superintendent of Post Offices, Chingleput Division and others-and contended that the acquittal of appellants Ramakrishnan, Srinath, Sarathy and Venkatesan by the criminal court would ipso facto wipe out their liability under the provisions of the Gold (Control) Act, in adjudication proceedings.
We have had occasion to consider in extenso the legal effect of an acquittal rendered in a criminal prosecution under the provisions of the Customs Act vis-a-vis the adjudication proceedings, in our order dated 21-1-1984 in appeal No. CD(T) (MAS) 122/80 (M/s. Rekhi Roadlines Pvt. Ltd. and Shri K.S. Rekhi, Director, M/s. Rekhi Roadlines Pvt.
Ltd., Bangalore v. Collector of Customs, Madras.
11. In particular, we should like to place reliance on the ruling of a Division Bench of the Madras High Court in Criminal Revision Case No.206 of 1976, Criminal Revision Petition No, 2,04 of 1976 in Assistant Collector of Customs, Preventive Department, Custom House, Madras v.Misrimal and Shah Monmal Mistrimal, wherein His Lordship the Chief Justice, speaking for the Bench, has held that in a case where proceedings have been taken under the Customs Act and the concerned property had been confiscated and in law it has vested in the Central Government, without challenging the confiscation proceedings, the person cannot claim to be entitled to the possession of the goods. The ratio of the above ruling is that an order of acquittal would not render negatory or inoperative a valid order of confiscation by a competent adjudicating authority and after confiscation under the Customs Act, the property itself becomes vested in the Central Government and cannot be de-vested by an order of acquittal by the Criminal Court. A similar view has also been taken by an earlier Division Bench of the Madras High Court in Assistant Collector of Customs v. Krishna Pillai, reported in 1955 Madras Weekly Notes Cr.
137. It was a case of seizure of two blocks of gold from the accused person and the Customs Department was held entitled to retain the goods seized from the accused person in spite of the acquittal of the accused in the criminal prosecution.
10. The Supreme Court in Gian Chand etc. v. Union of India, Civil Appeal Nos. 1430 to 1442 of 1966, while considering the scope of Section 167 of the Sea Customs Act, 1878 has observed : "The case of Hansraj and his associates thus fell under Section 167(8) (of the Sea Customs Act, 1878) in that their acts, on their own showing, amounted, in any event, to an attempt on their part to smuggle gold and export currency notes to Pakistan contrary to Sections 23A and 23B of the Foreign Exchange Regulation Act, 1947 read with Section 19 of the Sea Customs Act, and therefore, they were liable to personal penalty and the currency notes were also liable to confiscation. The Collector's order in these circumstances cannot be interfered with." That was also a case where in a criminal prosecution the accused persons were acquitted and the ratio decidendi of the ruling is that where an order of confiscation has been passed on the basis of sustainable presumptions and sufficient evidence, it was not open to a Court to disturb the order of confiscation.
11. In our ruling referred to in para 9, we have also discussed in depth the ruling relied upon by the learned Counsel for the appellants.
It would be redundant to cite case laws herein and it would suffice if we advert to our earlier ruling referred to above exhaustively dealing with a case having a bearing on this question. In the instant case, the Judicial First Class Magistrate, Coimbatore, in his judgment dated 13-9-82 in C.C. 1200/1981, has merely observed that in respect of appellant Ramesh Babu, the charges under Sections 8, 11, 17, 27, 32 and 55 could never be levelled against a certified goldsmith. The Criminal Court has not considered the evidence at all and has clearly misdirected, in our opinion, if we may say so with respect, with reference to the non-applicability of the aforesaid charges against a certified goldsmith. Likewise the other appellants before the Criminal Court have been acquitted merely on the ground that no evidence was let in by prosecution regarding their contravention of the provisions of the Gold (Control) Act. When the criminal court did not have evidence at all and chose to acquit the accused either for want of evidence or on the basis of a mis-construction and erroneous interpretation of the scope of the Sections of the Act, that would not automatically absolve the accused of their liabilities under the provisions of the Act in adjudication proceedings.
12. The learned Counsel for the appellants also relied upon the judgment of the Madras High Court reported in 1981 MLJ II 405 in the case of M.K.S. Abubacker v. Secretary to the Government of India, Ministry of Finance, New Delhi and others, to reiterate his submissions regarding the legal effect of an acquittal by a Criminal Court on adjudication proceedings. As pointed out by us earlier, in the instant case the Criminal Court has not gone into the merits at all and the acquittal is based purely on ground of want of evidence and on a mis-construction of the scope of the applicability of charges under Sections 8, 11, 17, 27, 32 and 55 vis-a-vis a certified goldsmith.
Therefore, in our opinion, this decision has no application to the facts of the instant case and is clearly distinguishable.
13. The ruling reported in AIR 1983 Madras 53 in K. Narayanaswamy v.Deputy Director, Enforcement Directorate, Madras and another, relied upon by the learned Counsel for the appellants has no application to the facts of the present case and that was a case arising under the provisions of Foreign Exchange Regulation Act where their Lordships found on facts that the ingredients of Section 5(1)(aa) of the Foreign Exchange Regulation Act had not been made out.
14. The learned DR drew our attention to the ruling of the Madras High Court reported in 1978 TLR 1735 in R.S. Kalyanaraman v. The Collector of Customs, Madras and another and contended on the strength of the same that the departmental proceedings under Section 112 could not be said to be vitiated merely because they were based on a consideration of the confession of the co-accused, especially when such confession was only one of the pieces of evidence taken into consideration. We have had occasion to refer to the same, with approval, in our Bench ruling in Appeal No. CD(T) (MAS) 104/80 to 106/80, dated 29-11-83-Kallatra Mahin and Ors. v. Collector of Central Excise, Bangalore. It is axiomatic that in a criminal prosecution a confession of a co-accused is not per se evidence within the meaning of Section 3 of the Evidence Act and cannot be pressed into service by prosecution as a piece of substantive evidence whereas in adjudicating proceedings the confession of a person in the position of an accomplice can well be taken into consideration as one of the circumstances.
15. Having carefully considered the materials available on record we find that the charges of contravention against appellant Ramesh Babu under Sections 8(1), 27 and 42 have been clearly made out. Likewise, the charges against the other appellants C.P. Ramakrishnan, and C.P.Srinath under Sections 8(1), 11, 17 and 27 of the Act have been established. So far as the appellants Sarathy and Venkatesan are concerned, they have clearly been privy to the illegal act of purchase and sale of primary gold on several occasions in the past and have clearly abetted in the contravention of the provisions of the Act. We find them guilty of Sections 8(1) and 27 of the Act.
16. In view of our above finding we uphold the confiscation of the primary gold in question and the redemption fine of Rs. 1,25,000 imposed on the appellant Ramesh Babu by the Collector of Central Excise. Regarding the penalty, we feel that interests of justice would be met if the same is brought on par with the one imposed on appellants Ramakrishnan, Srinath, Sarathy and Venkatesan since they were instrumental for the sale and purchase of primary gold through Ramesh Babu who acted as a carrier between them. We therefore reduce the penalty on Ramesh Babu from Rs. 50,000 to Rs. 10,000 (Rupees ten thousand only) and confirm the penalties imposed on the other appellants by the adjudicating authority.
17. Except for the above said reduction in the penalty on appellant Ramesh Babu, the appeals are otherwise dismissed.