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Shri Chandra Parameshwar Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1986)(6)LC644Tri(Chennai)
AppellantShri Chandra Parameshwar
RespondentCollector of Central Excise
Excerpt:
.....the applicant as well as the pleadings. when the applicant has put forth a specific plea that the account books under seizure are fictitious and the entries therein are imaginary, it is for the applicant to prove the same. it is fundamental that whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist. onus is always on the person who asserts a proposition or fact.it is the applicant who has been contending that the apparent is not the real state of things with reference to the accounts and the entries therein, and in such a situation, such a fact which the applicant asserts should be proved by him. this aspect has been considered in the order of the tribunal in extenso on.....
Judgment:
1. This is an application for reference arising out of the order of the Tribunal dated 15-12-1984 in appeal No. GC/(MAS) 43/84. The applicant Has urged the following questions as questions of law arising out of the order of the Tribunal referred to supra and prayed for reference of the same in terms of Section 82B of the Gold (Control) Act, 1968 to the High Court of Andhra Pradesh. For purposes of brevity we condense the pleadings and submissions of the applicant and give the substance: (1) Whether the Tribunal was justified in throwing the onus on the applicant to prove that the entries were not genuine in view of the decision in Lalit Kumar v. Assistant Collector, Meerut, reported in 1983 ELT 2208.

(2) Whether the observations of the Tribunal that the Department could invoke Sections 106 and 114 of the Evidence Act to draw an adverse inference against the applicant is legally tenable in view of the decision of the Supreme Court in 1983 ELT 1321, 1546.

(3) Whether on the facts of the case a penalty of Rs. 3 lakhs can be levied on the applicant without determining the value of the gold. (4) Whether the statments recorded from the applicant is admissible inasmuch as the same was not recorded as required by Section 70 of the Act.

(5) Whether the Tribunal is right in placing reliance on the accounts books seized from the applicant's house when the retention of the same was without the authority of law in terms of Sections 66(2) & (3) of the Act.

(6) Whether the applicant can be found guilty of contravention of Section 27(1) of the Act on the basis of entries in accounts without the authorities proving any transaction in gold done by the applicant.

2. We have considered the submissions of the learned representative of the applicant as well as the pleadings. When the applicant has put forth a specific plea that the account books under seizure are fictitious and the entries therein are imaginary, it is for the applicant to prove the same. It is fundamental that whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist. Onus is always on the person who asserts a proposition or fact.

It is the applicant who has been contending that the apparent is not the real state of things with reference to the accounts and the entries therein, and in such a situation, such a fact which the applicant asserts should be proved by him. This aspect has been considered in the order of the Tribunal in extenso on consideration of the evidence on record. The ratio of the decision in "Lalit Kumar v. Assistant Collector of Central Excise, Meerut", reported in 1983 E.L.T. 2208(A11) has absolutely no application to the facts of this case nor any relevance to the issue decided herein. That was a criminal revision decided by the learned single Judge of the Allahabad High Court in a prosecution arising under the provisions of the Gold (Control) Act, 1968. The question that arose for consideration in that case was as to whether the prosection could rely upon the entries in an account book without specific proof of the same. As a matter of fact only three extracts were made out of the entire seizure and produced as prosecution exhibits, and the account books seized from one Chandra Prakash were used against one Lalit Kumar from whom they had not been seized, which was disapproved without proper legal proof since it is a well established principle of criminal jurisprudence that the prosecution must prove the case beyond reasonable doubt. In the present case the recovery and seizure of the account books and the fact that they contained certain entries evidencing transactions in gold are admitted by the applicant who would put forth a plea that he was practising "account writing" on medical advice. As stated earlier, it is for the applicant to prove his assertion. We therefore hold that the ruling referred to above and relied upon by the applicant has absolutely no relevance to the issues arising herein and find this issue against the applicant.

3. The ratio of the decision of the Supreme Court in "Ambalal v. Union of India and others" reported in 1983 E.L.T. 1321 (S.C.) relied upon by the applicant is against him and not in his favour. The Supreme Court has held that the principle underlying Section 106 of the Evidence Act is of universal application, and under that Section, when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. It is relevant to refer to a recent ruling of the Supreme Court reported in AIR 1980 SC 393 - State of Maharashtra v.Natwarlal Darnodardas Soni - though not cited by either of the parties.

That was a case which arose out of a criminal prosecution under Section 133(a) & (b) of the Customs Act, 1962 where the Supreme Court held that even in cases where Section 123(1) of the Customs Act is not attracted the prosecution can discharge its burden by establishing circumstances from which a prudent man acting prudently may infer that in all probability the goods in question were smuggled goods and the accused had the requisite guilty knowledge in respect thereof. The Supreme Court referred to the leading case "Issardas Daulat Ram v. Union of India, 1962 Supp.(1) SCR 358 and held that in that case, in reaching the conclusion that the gold had been smuggled the Collector of Customs considered the credibility of the story put forward by the appellant about the purchase of the gold and also the conduct of the appellant in trying to get the gold melted so as to reduce its fineness by mixing silver with it, in. an attempt to approximate the resultant product to licit gold found in the market. The Supreme Court further held the ratio of this decision was followed by that Court in Labhchand Dhanpat Singh Jain v. State of Maharashtra, AIR 1975 SC 182. The appellant-accused therein was trying to enter the railway compartment at Bombay Station. Seeing his nervousness, the Railway police questioned him and searched his person and recovered nine bars of gold with foreign markings. The accused put forward an incredible story with regard to the possession of the gold. This Court held, that in the circumstances of the case, an inference could very well be drawn that the gold must have been imported after the law passed in- 1948, restricting its entry, that the burden of proving an innocent receipt of gold lay upon the appellant under Section 106, Evidence Act and that the totality of facts proved is enough to raise a presumption under Section 114, Evidence Act that the gold had been illegally imported into the country, so as to be covered by Section 111(d) of the Customs Act." Therefore, the settled proposition of law is that the Department can invoke to its advantage the principles embedded in Sections 106 and 114 of the Evidence Act, depending upon the facts and circumstances of the case. We therefore answer this issue also against the applicant.

4. The next question canvassed by the applicant that no penalty under Section 74 of the Act can be imposed without determining the value of the gold is benefit of substance. The account books seized from the applicant's premises evidence transactions in gold and the applicant has informed the authorities immediately on seizure that the books under seizure belonged to his gold business. The transactions evidence by the entries in the account books would incontrovertibly justify the imposition of a penalty for more than Rs. 3 lakhs in terms of Section 74 of the Act. This is purely a question of factual appreciation and assessment of the magnitude of clandestine transactions indulged in by the applicant. No question of law, much less one in terms of Section 74 would arise for reference. We therefore find this issue against the applicant.

5. The next question canvassed by the applicant with reference to the inadmissibility of the statement recorded from the applicant since the same is not in conformity with Section 70 of the Act is utterly devoid of any substance. Section 70 merely states that when a person makes a statement at the time of arrest or seizure under the Act to an officer, the officer shall record in writing the statement of such person in as nearly as possible the language in which such statement is made. The applicant has submitted in the reference application about coercion regarding the statement. Statements recorded by officers under the Gold (Control) Act are admissible and if the same is assailed as extracted under threat or coercion, it is for the person making such assertion to prove or probabilise it. These are questions of fact and are not of law. We therefore find this issue against the applicant.

6. The next plea of the applicant that retention of the account books against the provisions of the statute would render them inadmissible in evidence is legally untenable. Assuming arguendo that the seized account books were retained for a period exceeding six months without the approval of the Administrator as specified in Section 66(3) of the Act, the entries in the account books would not ipso facto become inadmissible. This position is no longer res Integra and is concluded by a number of authoritative pronouncements of the Supreme Court.

Reference may usefully be made to recent ruling of the Supreme Court though not cited by either of the parties, reported in AIR 1980 SC 593, where the Supreme Court has observed "assuming arguendo, that the search was illegal, then also, it will not affect the validity of the seizure and further investigation by the Customs authorities or the validity of the trial which followed on the complaint of the Assistant Collector of Customs". The Supreme Court has also adverted to an earlier ruling of the Supreme Court in "Radhakrishnan v. State of U.P.", reported in AIR 1963 SC 822, wherein his Lordship Justice Mudholkar, speaking for the Bench, held that even assuming that the search was illegal the seizure of the articles is not vitiated. Indeed, the Supreme Court has also referred to the ruling of the Supreme Court of the United States of America in "W.T. Stone, Warden v. Lloyd Charles Powell and Charles L. Wolff Jr. Warden v. David L. Rice" wherein the Supreme Court made a clear departure from its previous decision in the application of the "exclusionary Rule" of evidence. The prosecution in these cases relied upon the evidence of search and seizure, which were said to be unconstitutional and unlawful and Justice Powell, made these pertinent observations: "Upon examination, we conclude, in light of the nature and purpose of the fourth Amendment exclusionary Rule, that this view is unjustified. We hold, therefore, that where the State has provided an opportunity for full and fair litigation of a Fourth Amendment claim, the Constitution does not require that a State prisoner be granted federal habeas corpus relief on the ground that evidence obtained in an unconstitutional search or seizure was introduced at his trial." In his concurring opinion, Chief Justice Surge highlighted the injustice that often resulted from application of the 'exclusionary Rule': Said the learned Chief Justice: "To vindicate the continued existence of this Judge-made Rule, it is incubent upon those who seek its retention - and surely its extension -to demonstrate that it serves its declared deterrent purpose and to show that the results outweigh the Rule's heavy costs to rational enforcement of the Criminal Law. See, e.g. Killough v. United States, (1962) 315 F 2d 241): The burden rightly rests upon those who seek society to ignore trustworthy evidence of guilts at the expense of setting obviously guilty criminals free to ply their trade." Therefore, even in a criminal case where a search is illegal it is made clear that it would not vitiate or invalidate seizure conseguent on such an illegal search. No doubt person has a right to resist an illegal searcn, but incriminating articles recovered consequent on an illegal search would not become inadmissible in law nor a resultant trial consequent on an illegal search would be incompetent. A fortiori it follows that if the account books lawfully seized by an authority are retained beyond a period of six months specified in Section 66(3) of the Act without the approval of the Administrator they would not become inadmissible. The ratio in the ruling of Commissioner of Income-tax v. Jawaharlal Rastogi, reported in AIR 1970 SC 1651 and relied upon by the applicant has absolutely no relevance to the issues on hand. That was a case where a writ petition was filed by the assessee praying for the return of the documents seized by the income-tax authorities on an allegation that retention of the seized accounts beyond 180 days was contrary to Section 32(8) of the Income Tax Act, 1961, as amended by the Finance Act, 1969. In the instant case the question regarding the return of the account books was never an issue before the adjudicating authority or before any forum and for that matter, it is outside the scope of adjudication under the provisions of the Gold (Control) Act. We therefore find this issue against the applicant.

7. The last question canvassed by hthe applicant that without proving any transaction in gold done by the applicant, he cannot be found guilty of contravention of Section 27(1) of the Act is totally without substance. On consideration of facts and evidence the applicant has been found guilty of contravention of Section 27(1) of the Act. This factual assessment and appreciation being a question of fact is not a question of law meriting reference.

8. Therefore on careful consideration of the submissions of the applicant we find that there is no substance in any of them. The reference application is therefore dismissed.


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