TaxTMI 
TaxTMI 
2006 (5) TMI 409
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.... Sales Invoice No. 2063, dated 23-7-1996 of M/s. ALNAVAS STORE, Singapore evidencing sale of 42 FMG bars for Singapore $ 86184 to Shri Chinnakaruppan holding Indian Passport No. 425846. (ii) Tax Invoice No. CS-111834, dated 22-7-1996 of M/s. SOON HUAT GOLDSMITH PTE LTD., Singapore evidencing purchase of gold ornaments for Singapore $ 990 by Shri Chinnakaruppan. (iii) Tax Invoice No. CS-112388, dated 28-7-1996 of M/s. SOON HUAT GOLDSMITH PTE LTD., Singapore evidencing purchase of gold ornaments for Singapore $1200 by Shri Chinnakaruppan. (iv) Econony Class Boarding Pass dated 29-7-1996 of M/s. Singapore Airlines for Flight No. SQ 410, issued to Shri Chinnakaruppan for travel from Singapore to Madras. When questioned about the gold bars and ornaments mentioned in the aforesaid documents, Shri Chinnakaruppan took out 16 gold bars which had the markings "SUISSE 10 Tolas, 999.0 ESSAYER FONDEUR" and the gold ornaments (which were also 16 in No.) were found to have the marking "916". Shri Chinnakaruppan told the officers that, out of the 42 gold bars purchased by him under the aforementioned sale invoice dated 23-7-1996, he had han....
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....the remaining gold bars on 29-7-1996; that he cleared the gold bars and ornaments at Madras without declaring the same to Customs and without payment of Customs duty; that he stayed at V.M. Tours & Travels of Shri Sekar at Royapettah with his baggages; that he left Royapettah around 8.30 p.m. on 31-7-1996 along with the said Shri Sekar by his ambassador car hired for Rs. 2,500/-; that he had secreted the said 16 gold bars and 16 gold ornaments in his pant pockets; that the car was driven by Shri Muthu and that it was intercepted at Tholudur by Customs officers at about 8.30 a.m. on 1-8-1996. Shri Chinnakaruppan further stated that on interrogation, he took out the gold bars and ornaments and the connected purchase documents and handed over the same to the officers and that he could not produce any document evidencing duty payment or licit nature of the gold bars and ornaments. Shri Chinnakaruppan was arrested on 2-8-1996 and was remanded to judicial custody on the same date. 2. Shri Chinnakaruppan retracted the above statement in a petition dated 6-8-1996 sent from jail, wherein he stated that he had stayed at Singapore with his friend Shri Arumugam; that he purchased gold or....
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....s and cleared the same under Baggage Receipt No. 14285, dated 31-7-1996. Shri Balasubramanian's address shown in Baggage Receipt No. 14732, dated 31-7-1996 was "C/o Abu Palace Hotel, Madras-84" but the General Manager of this hotel stated that nobody in the name of 'Balasubramanian' had stayed in the hotel during the relevant period. The Customs officers recovered the passport of Shri Chinnakaruppan from M/s. DD Travels, Madras, through whom arrangements were being made for his further visit to Singapore. However, their efforts to apprehend Balasubramanian and Asumugam did not succeed. Shri Chinnakaruppan's retractions were rejected as afterthought, by the Customs authorities. The seized gold bass and ornaments were certified, by the Chemical Examiner, to be of purity 99.9% and 83 to 91.8% respectively. 3. On the basis of the results of investigations, a show-cause notice dated 27-11-1996 was issued to S/Shri Chinnakaruppan, Balasubramanian and Arumugam for confiscating the gold bars and ornaments and imposing penalties on the noticees. The proposals in the show-cause notice were contested. S/Shri G. Sivakumar (mahazar witness), R. Sekar (owner of car), Muthu (driver), C. Nag....
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.... the Customs Officers on 1-8-1996, it was submitted that any gold bars were not actually purchased by him under any of these documents which were collected only for the purpose of obtaining re-entry visa. In any case, according to ld. Counsel, at least the benefit of doubt should have been given to Shri Chinnakaruppan. In support of the various points raised by him, ld. Counsel has relied on the following decisions:- (i) Shankaria v. State of Rajasthan (AIR 1978 S.C. 1248) - [A confession is an efficacious proof of guilt only if it was voluntarily and truthfully made. If it appears to the Court to have been caused by inducement, threat or promise, it must be rejected]. (ii) Sevantilal Karsondas Modi v. State of Maharashtra [1999 (109) E.L.T. 41 (S.C.) = AIR 1979 S.C. 705] [If confession appears to remain untrue in any material particulars or having been caused by any inducement, threat or promise, it is hit by the mandate of Section 24 of the Evidence Act]. (iii) E. Kesavan v. Assistant Collector of Customs [1....
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....ed 2-8-1996 clinched the issue in this case. His retraction of the statement before the Judicial Magistrate was too belated to be accepted as genuine. Moreover, the retraction had no effect on the documentary evidence gathered by the department from Shri Chinnakaruppan himself. The statements dated 1-8-1996 of S/Shri R. Sekar and Muthu, who were also present in the car along with Shri Chinnakaruppan when the vehicle was intercepted by Customs Officers, corroborated Shri Chinnakaruppan's confessional statement. Their retraction, which came only at the time of their cross-examination before the adjudicating authority, was also not valid. Ld. SDR also resisted the appellants' challenge to the mahazar proceedings. In this connection, she relied on the unrebutted oral evidence of the Superintendent and Inspectors of Central Excise. With reference to Shri Balasubramanian's baggage receipt, she wondered as to why it was not delivered along with the 16 gold bars to Shri Chinnakaruppan by Shri Balasubramanian, if the story of delivery of 16 gold bars to Shri Ciiinnakaruppan by Shri Balasubramanian on 31-7-1996 was true. She opined that, if the story was true, an acknowledgment of receipt wo....
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....he latter's gold profitably in his native village and accordingly Shri Balasubramanian came to India with 42 FMG gold bars from Singapore on 31-7-1996 and delivered 16 of them to Shri Chinnakaruppan who was said to be waiting for the purpose at Madras Airport. It is also said that, at the time of delivering the gold to Shri Chinnakaruppan, Shri Balasubramanian also delivered a chit (note) to Shri Chinnakaruppan to the effect that 16 gold bars were being given to him (Shri Chinnakaruppan) for the purpose of sale in his native place. It is said that, while Shri Chinnakaruppan was carrying the 16 gold bars in his pants' pockets from the airport to his native place on 1-8-1996, the car in which he was travelling along with its owner Shri R. Sekar was intercepted by Customs officers and the gold bars along with gold ornaments were seized by them. The department's case is that 16 gold bars seized from Shri Chinnakaruppan were a part of 42 gold bars purchased by him from ALNAVAS STORE, Singapore under Invoice No. 2063, dated 23-7-1996 and that the gold ornaments seized from him had also been purchased from Singapore under 2 invoices dated 22-7-1996 and 28-7-1996. All the 3 invoices were r....
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.... 42 FMG gold bars by him for Singapore $ 86184. This invoice carried Shri Chinnakaruppan's signature along with date of sale. The appellant has not disowned this signature either. His claim is that no gold bar was actually purchased by him under this invoice and that this document was collected, without purchase of gold bars, from the shop for the mere purpose of producing it before the authority concerned for obtaining re-entry visa. But neither the appellant nor his Counsel has ever attempted to show that such a document was required, in law, for the purpose of obtaining re-entry visa. Was Shri Chinnakaruppan attempting to defraud the visa-granting authority by producing (as proof of purchase of gold) a fake invoice, i.e., an invoice which was obtained without purchasing gold? We cannot assume that he was attempting to do so. On the other hand, while dealing with his appeal, we must postulate that he is honest and law-abiding. Hence the above invoice must be accepted as genuine document covering purchase of gold by Shri Chinnakaruppan. Had it been the intention of Shri Chinnakaruppan to use the invoice for the purpose of obtaining re-entry visa, he would have produced the same al....
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....t gold bars and ornaments with foreign markings were recovered from him by the officers. They also stated that the gold bars, ornaments and documents were seized by the officers under a mahazar drawn in the presence of 2 independent witnesses. These statements were contradicted by S/Shri R. Sekar and Muthu themselves for the first time on 12-2-1997 when they were cross-examined before the adjudicating authority. These persons, however, did not have any explanation to offer for the delay of their resilement, nor did they have a case that they had been coerced into giving involuntary statements on 1-8-1996. Hence their retractions cannot be admitted into evidence. 10. It was claimed by ld. Counsel that Shri Chinnakaruppan was kept in prolonged custody of the Customs officers before his statement dated 2-8-1996 was recorded and, ipso facto, the statement was involuntary. After careful examination of the facts of the case, we have found that Shri Chinnakaruppan was arrested on 2-8-1996 and produced before the Judicial Magistrate on the same day. From the time at which the car (in which he was traveling with the contraband) was intercepted to the time of his arrest, he was w....
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....f Customs duty. The description of goods given in this document is similar to that mentioned in invoice No. 2063, dated 23-7-1996 relied on by the department. But tliis similarity of description of goods per se would not establish that the gold bars found in Shri Chinnakaruppan's possession were the same as those imported by Shri Balasubramanian. Shri Balasubramanian has claimed to have handed over 16 of his 42 gold bars to Shri Chinnakaruppan at the airport on 31-7-1996 for sale in his native village. He has also claimed to have simultaneously delivered a chit (note) to this effect to Shri Chinnakaruppan. But this chit was not found in Shri Chinnakaruppan's possession when he was intercepted by Customs officers vide mahazar dated 1-8-1996, nor was any other documentary evidence of transfer of gold between Shri Balasubramanian and Shri Chinnakaruppan available. Neither of them could produce any eye witness to such transfer also. Hence the above claim of Shri Balasubramanian is only an ipse dixit with no evidence whatsoever. It is also pertinent to note that the above baggage receipt was not produced in original before the Commissioner even at the stage of adjudication of the case. ....
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.... gold biscuits formed part of the gold biscuits imported by one Shri Balan from Dubai and cleared through Trivandrum Airport on payment of Customs duty. Shri Balan also claimed that he had handed over 30 gold biscuits to Shri Rajendra Prasad for selling the same at Coimbatore. The Apex Court, however, found no correlation between the gold biscuits seized from Shri Rajendra Prasad and those imported by Shri Balan and consequently the confiscation of the seized goods was upheld. The facts of the instant case are similar. 13. For the reasons noted by us, the confiscation of the seized gold bars is upheld, but with an option for redemption. This decision will apply to the gold ornaments, in respect of which no evidence was adduced by Shri Chinnakaruppan to support his claim that the goods were declared to the Customs authorities and legally cleared. The lower authority has not invoked Section 125 of the Customs Act to give option for redemption of the goods on payment of fine in lieu of confiscation. We direct the Commissioner of Customs to give this option to Shri Chinnakaruppan and determine an amount of fine in terms of Section 125, for the purpose. He shall be given a reasona....