TaxTMI 
TaxTMI 
2001 (7) TMI 254
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.... Customs Act as Umashankar did not produce any document for their lawful possession; that Umashankar deposed in his statement that he had brought the gold biscuits for Shri Gehrilal Dagalia of Udaipur from Shri Ashok Dagalia, Mumbai. The search of the premises of Gehrilal resulted in the recovery and seizure of 10 foreign mark gold biscuits, 3 flattened gold biscuits and foreign currencies in different denominations, one cloth neoli, one canvas jacket and a wrapper of packing tape. After investigation the Commissioner adjudicated the matter and passed the impugned Order and hence the present Appeals. 3.Shri G.K. Rana, learned Advocate, along with Shri D.K. Rana, learned Advocate, submitted that the gold and foreign currencies are not notified under Chapter IV-A of the Customs Act and the person possessing or carrying the same are not required to carry any document regarding legal import of the goods in question; that as such seizure of gold and currency is illegal as the same were seized as the documents evidencing lawful possession were not produced; that the import of gold has been permitted by the Central Government vide ITC Order No. 83/90-93, dated 29-2-92; that according to ....
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....n it was held that as the accused was wrongfully confined in customs custody for five days and he had retracted his statement at the earliest opportunity, benefit of doubt has to be extended to the accused person. Reliance was also placed on the decision in the case of Jitendra Kumar Ghishulal Jain v. Collector of Customs (Preventive), Mumbai, [1998 (103) E.L.T. 591 (T)] wherein it was held that retracted statement is a weak evidence to be solely relied upon to impose personal penalty and panchnama drawn in the office, after collecting the Panchas of the choice of the officers cannot be an independent corroboration to the statement. 5.The learned Counsel, further, submitted that Ashok Dagalia had purchased the gold biscuits from Shri Gangadharan Mullachery who had come to India from abroad on 7-4-1993; that he had brought with him 42 gold bars which were cleared by him on payment of customs duty under Baggage Receipt No. 006423, dated 7-4-93; that he had given 33 gold biscuits to Ashok Dagalia; that Shri Ashok Dagalia had also given an Affidavit dated 14-10-93 in which he had specifically affirmed that out of 33 gold biscuits received by him from Gangadharan for sale, he had given....
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....ating Authority had given his findings in Para 34 of the impugned order that the impugned gold was acquired in contravention of Section 11 of the Customs Act read with Sections 13 and 67 of the Foreign Trade (Development and Regulation) Act; that there are no such sections in Foreign Trade (Development and Regulation) Act of which any contravention can be made; that even if these are provisions of Foreign Exchange Regulation Act, these are not applicable and accordingly the findings in the said para 34 are illegal. 6.The learned Advocate further submitted that seized foreign currency was kept with Gehri Lal by Shri Mohammad Rais and Shri Nisar Mohammad who had brought the same legally to India; that Nisar Mohd. has given an Affidavit dated 7-1-1994 according to which he along with Mohd. Rais had gone to Udaipur on 6-9-93 to purchase gold and an agent directed them to Gehri Lal; that as Gehri Lal told them that gold would be available after two days, they had kept the foreign currency wrapped in two paper packets with Gehri Lal for safe custody without telling him that the packets contained foreign currencies; that Shri Mohd. Rais had also given an Affidavit to the same effect; tha....
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....ri Ashok Dagalia at the time of handing over the seized foreign marked gold biscuits; that he had retracted the statement on 28-9-93, i.e., after a gap of 20 days. He also mentioned that he was arrested only on 9th September, 1993 and was produced before the Magistrate on 10th September and accordingly there was no contravention of the provisions of the Constitution of India; He further mentioned that mentioning of wrong section is not material; that Customs Notification No. 11/93 authorises Superintendent to conduct search in certain circumstances; that as Umashankar in his statement provided specific leads to the officers, the search of the residence of Gehri Lal was conducted which is within law; that if every possession of gold and foreign exchange was legal and covered by documents, Gehri Lal should have cooperated with the Department; that instead of cooperation and putting forth his case, he did not respond to various summons issued to him; that even Ashok Dagalia did not respond to summons issued to him. He also said that no documents were found in the possession of Umashankar which is evident from his statements wherein he clearly deposed that no document was given to him ....
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....as entitled to cross-examine the panch witnesses before the authority takes a decision on proof of the offence. The Supreme Court held "the confession though retracted, is an admission and binds the petitioner. So there is no need to call Panch witnesses for examination and cross-examination by the petitioner". He further relied upon the following two decisions : (a) Mohammadbhai Chhotubhai Cutpiecewala v. Additional Collector of Customs [1986 (25) E.L.T. 413 (T)]. (b) Smt. Shainaaz S. Punjani v. Commissioner of Customs [2002 (148) E.L.T. 679 (T) = 2001 (75) ECC 466] wherein it was held that failure to mention the section specifically is not fatal to the proceedings. 8.The learned S.D.R. also mentioned that neither Rais nor Nisar had known Gehri Lal at all; they were told about him by a third person (Dalal) and it is unbelievable that they would leave their foreign exchange with him for safe custody without revealing the fact to him and without counting the same in his presence; that these pleas are nothing but after thought; that Nisar Mohd. did not appear before the Custom Authorities despite s....
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....Lal and Ashok, his carrying foreign currencies given by Gehri Lal to Ashok at Mumbai and bringing foreign gold from Ashok for said Gehri Lal. We also observe from his letter dated 15-9-93 that merely complaining of coercion used by Customs Officer, he does not give any details about the acquisition of gold and how the same was not smuggled one. Such a letter first of all cannot be considered a retraction of the statement tendered by him under Section 108 of the Customs Act. Further even this letter has been sent after 7 days of the seizure and recording of his statement. The Apex Court in the case of Surjeet Singh Chhabra, relied upon by the learned SDR, has held that confession, though retracted, is an admission and binds the petitioner. Further the Supreme Court did not find any violation of principles of natural justice in not cross-examining the Panch Witness in Surjeet Singh Chhabra case. We also do not find any force in the contention that as provisions of Chapter IVA of the Customs Act does not apply to gold, absence of any document relating to gold with Umashankar does not lead to the conclusion that gold is smuggled one. In a normal business deal of such a magnitude where ....
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....ustoms Act. 11.Coming to the confiscability of foreign currencies, we observes that the defence put forth by the Appellants is completely unbelievable. Both Mohd. Rais and Nisar have not known Gehri Lal at all and they went to him for purchase of gold on the advice of a broker, who was introduced to them by one of their acquaintance at Udaipur. To such a stranger (Gehri Lal) both Rais and Nisar handover their foreign currencies for safe custody without counting in his presence. Such a story is nothing but a feeble attempt to make the possession of currencies legal. We observe that as in respect of gold, Gehri Lal could and should have brought the fact of currencies being given to him by Rais and Nisar for safe custody immediately after the seizure of the same from his residence premises. No such disclosure is made by him nor does he appear before the Customs Officers in pursuance of summons issued to him a number of times from September, 1993 to December, 1993. It is only in his anticipatory bail application filed on 15-10-1993, he produced Affidavits of Rais and Nisar. Again neither Rais nor Nisar made a claim over the seized foreign currency with the Department inspite of their ....