[Order]. - These appeals have been filed by the appellants against the confiscation of 60 biscuits of gold and imposition of penalties ordered by Commissioner of Customs (Prev.), Kolkata-I under Order-in-Original No. 30/CUS/CCP/WB/2007, dated 19-12-2007. Under this Order-in-Original Adjudicating authority has absolutely confiscated 60 pieces of foreign marked gold biscuits, valued at Rs. 32,04,168/- under Sections 111(b) & 111(d) of the Customs Act, 1962. Penalties of Rs. 5 lakh each have been imposed upon the appellants Shri Nitya Gopal Biswas, Smt. Chhabi Biswas and Shri Lalji Bhai Kanjibhai Soni. Besides penalties of Rs. 3 lakh & Rs. 10,000/- have also been imposed upon Shri Joy Gopal Biswas & Driver Shri Subodh Das respectively.
2. Shri N.K. Choudhary (Advocate) appeared on behalf of appellant Shri Laljibhai Kanjibhai Soni of Ahmedabad and Shri B.N. Chattopadhyay (Consultant) along with Shri Arijit Chakraborty (Advocate) appeared for the remaining appellants.
2.1 Shri B.N. Chattopadhyay argued that on the basis of an information Customs officers of Barasat Customs Preventive Unit intercepted one Tata Sumo, having registration No. WB 02J8006 on 5-9-2000 (1830 hrs.) near Doltala and in addition to driver Shri Subodh Das two other persons Smt. Chhabi Biswas & Shri Joy Gopal Biswas were also found sitting in the vehicle. That all these persons belonged to Bongaon P.S. That on search of the persons 40 gold biscuits and 20 gold biscuit bearing foreign markings were respectively recovered from the possession of Smt. Chhabi Biswas and Shri Joy Gopal Biswas. That preliminary testing by a local goldsmith showed the purity of gold biscuits to be 24 carats which was subsequently confirmed by the Chemical Examiner of the Customs House Laboratory. It is the case of learned Consultant that though in the show cause notice dated 2-3-2001 and Order-in-Original dated 19-12-2007 it is mentioned that Smt. Chhabi Biswas admitted the gold to be of foreign origin but in her statement dated 5-9-2000 on the date of seizure she only stated that 40 gold pieces recovered from her were believed to have come from Bangladesh. That this statement was written by one Shri Chandan Dey who was one of the witnesses of the Panchnama in the present proceedings. That Shri Joy Gopal Biswas also stated in his statement, also written by Chandan Dey, that gold biscuits seized from him were believed to have come from Bangladesh without any licit documents. That Shri Joy Gopal Biswas also stated that seized 60 gold biscuits were taken from one Joynal for the fourth time but no investigation was done to ascertain and apprehend Joynal. That providing cross-examination of Shri Chandan Dey as requested was simply ignored by writing a letter to this witness and no subsequent efforts were made to provide his cross-examination to the appellants. That all the three occupants of the vehicle were arrested and another statement dated 22-9-2000 of Shri Joy Gopal Biswas was recorded in judicial custody wherein he deviated from his first statement dated 5-9-2000. That 60 gold biscuits were given to him by the younger brother Shri Nitya Gopal Biswas at 2 p.m. on 5-9-2000 for delivering the same back to him near Sealdah. That on the same day 25-9-2000 Shri Nitya Gopal Biswas filed a claim petition for the seized gold biscuits and that the same were purchased from one Shri Laljibhai Kanjibhai Soni of M/s. L.K. Soni, Ahmedabad by making cash payments and a photocopy of Sale bill No. 422, dated 29-8-2000 was also furnished. That Shri LaljiBhai K. Soni of Ahmedabad has confirmed in his statement to have sold the said 60 gold biscuits to Nitya Gopal Biswas which were also recorded in his accounts maintained in the computer. That verifications made by the investigation at Ahmedabad also confirmed the transactions undertaken between Shri Nitya Gopal Biswas and Shri Laljibhai K. Soni. That there is no discrepancy in the bill No. 422, dated 29-8-2000 furnished by the appellant and the copy obtained by investigation directly from Ahmedabad and the difference if any is only on account of photocopying of the document. That it has been wrongly observed in the Adjudication order that original of the bill No. 422, dated 29-8-2000 was never produced. Learned Advocate produced the original of this sale bill for verification and made the same available to the A.R. & the Bench for perusal. That the show cause notice was earlier decided by the Adjudicating authority under Order-in-Original No. 01/CUS/COM (REV) WB/2004, dated 6-1-2004 which was remanded by this Bench to the Adjudicating Authority under Order Nos. A-427-431/KOL/2007, dated 22-3-2007.
2.2 Learned Consultant also made the Bench go through second para, on internal page 17 of the Order-in-Original dated 19-12-2007 to argue that Adjudicating authority has wrongly concluded that due to 2.4 gms. difference in weight of gold between quantity, indicated in Bill No. 422, dated 29-8-2000 and the one determined at the time of seizure, establishes that the bill does not pertain to the seized goods. He relied upon the case laws of this Bench in the case of Kapil Deo Prasad v. C.C. (P), Patna [2002 (02) LCX 0099 = (Tri. - Kolkata)] and made the Bench go through para 9 of this case law to drive home the point that slight variations in the weight could be weighment errors on the date of seizure as all the seized gold bars has standard weight of 116.640 gms. That it is not necessary that buyer of gold should sign on a purchase bill as hyped by the adjudicating authority. That no CST was paid on such purchase by the seller as it was not a case of interstate sale and price of gold included the sale tax element for which seller of the gold is filing VAT returns and have a VAT registration. That Shri Laljibhai K. Soni has stated to have purchased gold from Banks and other persons who brought gold as baggage which is reflected in accounts maintained by Shri Lalji K. Soni and made the Bench go through pages 186 to 197 of the appeal memorandum to highlight that Shri Laljibhai K. Soni has maintained records before and after the date of seizure and sales and purchases are indicated in these records for which payments are made against cheque as well as in cash. That sales made to Shri Nitya Gopal Biswas on page 188 and was not the last entry in the records. That Shri Laljibhai Kr. Soni has sold 4152 TTB- Gold Bars in August, 2000 against purchase of 4733 gold bars. That Commissioner has correctly observed that there is no legal requirement to maintain the details of gold bars in the register but has wrongly recorded a different findings. He relied upon the case law of Giridhari Dubey v. CC (P), Kolkata [2001 (11) LCX 2015 = (Tri. - Mumbai)] where it is held that for non-giving specific marks of gold biscuits in the record cannot be held against the dealers of Gold [para 3C of this order]. That it is also wrongly observed by the Adjudicating authority that Laljibhai K. Soni does not get any foreign marked gold from Banks and persons who brought gold as baggage when he made his statement reflected in para 26 of the show cause notice dated 2-3-2001. That further details of documents were not asked from Shri Laljibhai K. Soni. That Revenue could have verified other transactions made in the accounts maintained by seller Shri Laljibhai K. Soni to refute the correctness of Bill No. 422, dated 29-8-2000. It was thus strongly contested by the learned Consultant that neither the gold seized was smuggled nor the bill produced by the claimant appellant is an afterthought in view of the fact on record and the relied upon case laws. Reliance was also placed by the appellant on the Apex Court decision in the case of Vinod Solanki v. U.O.I. [ (S.C.) = (S.C.)] to argue that subsequent statement of Shri Joy Gopal Biswas in judicial custody was more authentic and factual which was also investigated by the Department. That even if the seized gold is presumed to be smuggled then also option of redemption was required to be given under Section 125 of Customs Act, 1962.
3. Shri N.K. Chowdhury (Advocate) appearing on behalf of his client argued that even if it is presumed that a false/forged bill was issued by Shri Laljibhai Kr. Soni then also any action could be only taken under either IPC or any other violating statute but a penalty under Section 111of the Customs Act, 1962 cannot be imposed as alleged act of presumed illegal import is already committed without his client. That if the bill is considered to be not genuine then also no penalty is attracted under the Customs Act, 1962.
4. Shri A. Kumar, A.C. (A.R.) appearing on behalf of the Revenue as well as through written submissions filed on 9-11-15 strongly defended the conclusions arrived at by the adjudicating authority. It is Revenue’s case that the first statement of Smt. Chhabi Biswas & Shri Joy Gopal Biswas clearly mention that seized foreign marked gold was smuggled from Bangladesh and there was no document with the appellants regarding licit acquisition of seized gold. That subsequently production of a sale bill from Shri Laljibhai K. Soni of Ahmedabad was only an afterthought and manipulated which has been amply justified by the Adjudicating authority in internal pages 17 to 19 of the Order-in-Original dated 19-12-2007. It was strongly argued by the learned A.R. that Shri Nitya Gopal Biswas can hardly be considered capable of purchasing such a big quantity of gold biscuits That absolute confiscation of gold and imposition of penalties have been correctly made by the Adjudicating authority.
5. Heard both sides and perused the case records. The issues involved in these appeals are :
(i) Whether appellant Shri Nitya Gopal Biswas has managed Bill No. 422, dated 29-8-2000 to cover up 60 foreign marked gold biscuits seized on 5-9-2000 which have been held to be of smuggled nature by the Adjudicating authority.
(ii) Whether penalties are attracted against the appellants in these proceedings under Section 112 of the Customs Act, 1962.
6. It is observed from the case records that Smt. Chhabi Biswas and Shri Joy Gopal Biswas were intercepted on 5-9-2000, moving in a Tata Sumo vehicle near Doltala with 60 foreign marked gold biscuits in their possessions. None of those two persons could furnish any document regarding licit possession of the gold biscuits at the time of interception and the said gold biscuits were seized on the ground that they were smuggled when read with Section 123 of the Customs Act, 1962. Both Smt. Chhabi Biswas & Shri Joy Gopal Biswas also stated that these gold biscuits are believed to have come from Bangladesh. Shri Joy Gopal Biswas in his first statement also stated that these foreign marked gold biscuits were obtained from one Joynal for the fourth time. By another statement dated 22-9-2000 of Shri Joy Gopal Biswas, recorded by the investigation in Judicial custody, it was stated that these 60 gold biscuits were handed over to him by his younger brother Shri Nitya Gopal Biswas. Shri Nitya Gopal Biswas also lodged his claim and produced a purchase Bill No. 422, dated 29-8-2000 from one Shri Laljibhai K. Soni, a gold dealer of Ahmedabad. Investigation accepted the statement and followed the Ahmedabad trail by carrying out the investigation at Ahmedabad in detail to refute the claim of Shri Nitya Gopal Biswas. Department never took any initiation to carry out any investigation to trace out whereabouts of Joynal named by Shri Joy Gopal Biswas in his statement dated 5-9-2000 which Revenue is claiming it in their favour. The very fact that the present consignment was the fourth one received from Joynal by Shri Joy Gopal Biswas, investigation should have taken further details about the correct address, mobile number, etc. of Joynal to know as to how Shri Joy Gopal Biswas was contacting Joynal regularly. Simultaneously, following this trail could have easily established the true nature of origin of 60 foreign marked gold whether smuggled or otherwise. Having not done that the whole effort of the department was concentrated to deflate refute the authenticity of purchase bill No. 422, dated 29-8-2000 produced by claimant Shri Nitya Gopal Biswas.
6.1 Adjudicating authority by his findings recorded on pages 17 to 19 has observed that initial statements of Smt. Chhabi Biswas & Joy Gopal Biswas and investigation done at Ahmedabad established that Bill No. 422, dated 29-8-2000 was an afterthought and cover up action and the foreign marked gold was of smuggled nature. Various parameters taken into account by the Adjudicating authority while confiscating the foreign marked gold and imposing penalties are as follows:
(i) That weight of the seized gold as per Pnchnama is 6996 gms. whereas this quantity is mentioned as 6998.400 gms. in sale Bill No. 422, dated 28-8-2000.
(ii) That the sale bill dated 28-8-2000 does not bear the signature of the buyer.
(iii) That particulars of CST/Sales Tax paid by M/s. Laljibhai K. Soni are not appearing on sales bill dated 28-8-2000.
(iv) That hand written bill book/computerized accounts are maintained in order to manipulate and manufacture document of dubious nature.
(v) That the sale bill dated 28-8-2000 produced by Shri Nitya Gopal Biswas and the one maintained by the supplier Shri Laljibhai K. Soni are distinctly different and details of the gold bars are not mentioned in the registers.
6.2 On the issue of slight variation in the weight of the impugned gold bars it is the case of the appellant Shri Nitya Gopal Biswas that the same could be due to weighing error during drawal of Panchnama. The argument taken by the appellant has some force because standard weight of foreign marked gold bar is 116.640 gms. each and slight variation could be due to weighing or human error. This observation is also fortified by the stand taken by this very Bench in the case of Kapildeo Prasad v. CC (Prev.), Patna [2002 (02) LCX 0099 = (Tri. - Kolkata)]. The arguments and ratio laid are contained in paras 9 & 12 below :-
“9. He, further, contended that the Commissioner has observed that there is a discrepancy in the description of the gold in question. Whereas the voucher of M/s. Chauhan Zevares shows that the goods sold to the appellants was T.T. Bars (116.640 foreign marked), the goods seized by the Officers are gold biscuits weighing 1868.800 gms. and of purity 998.7, 998.8 and 998.9, as certified by the India Government Mint, Calcutta. He has, further, observed that the sale voucher of M/s. Chauhan Zevares shows that the sixteen pieces were totally weighing 1866.240 gms. and were of purity 999.00. From this he concluded that the documents produced by the appellants are not covering the seized gold in question. Shri Chattopadhyay, learned Consultant submits that in commercial parlance, there is no difference between the biscuits and the bar. T.T. Bars is an abbreviation form of gold biscuit of 10 tolas. As regards weight, he submitted that the bar of foreign origin of 10 tolas has a standard weight of 116.640 gms. As such, the total weight of the 16 pieces has been shown as 1866.240 gms. in the sale voucher of M/s. Chauhan Zevares. The difference in weight made by the Customs showing a difference of about two grams, is a human error. Similarly, he submits that all foreign gold biscuits are of a standard purity of 999.00 and the test report of the India Government Mint showing the purity of little less than 999.00 is nothing but the result of human error. In any case, he submits that there appears to be no doubts about the genuineness of the sale voucher by M/s. Chauhan Zevares Pvt. Ltd. and as such, the rejection of the same by the adjudicating authority on a minor pseudo-discrepancy is not warranted.”
“12. The gold biscuits seized from Shri Awadesh Kr. Thakur have been confiscated by the adjudicating authority after rejecting the documentary evidence produced by the appellants showing the legal purchase of the same from M/s. Chauhan Zevares Pvt. Ltd. and by referring to certain discrepancy in the said document of the seized gold biscuits. However, I find that the discrepancies referred to by the adjudicating authority are not real inasmuch as he has held that whereas the sale voucher shows the goods to be “T.T. Bars”, the seized gold is biscuit. He has thus observed that such descriptive variation between the biscuits and the bars raises a reasonable doubt regarding the genuineness of the transaction. The appellants have contended that biscuits and the bars are synonymous terms used by the persons dealing in gold and are interchangeable “T.T. Bars” represent ten tola bars which are also referred to as biscuits. The Commissioner in his impugned Order has nowhere observed as to what is the difference between a biscuit and a bar. Similarly, as regards weight, I find that there is a variation of about 2 gms. in the weight of all the sixteen pieces of gold. The standard 10 tola bars weigh 116.640 gms, and as such, the total weight of 16 pieces of biscuits would come to 1866.240 gms, which is reflected in the sale voucher of M/s. Chauhan Zevares. Similarly, it is a matter of common knowledge that the standard purity of gold is 999.00. As such, as rightly contended by the learned consultant, the small variation in the weight or in the purity of gold is attributable to the human error and cannot be made the basis for rejecting the sale voucher of M/s. Chauhan Zevares who have admitted to have sold the goods to the appellants. This has also been observed by the Commissioner that M/s. Chauhan Zevares have subsequently stated that they were not sure that the gold under seizure was the same as was purchased from them. Naturally, a person who has sold the gold, cannot confirm whether the gold seized by the Customs Officers from that person, is the same gold or not. But the said statement made by M/s. Chauhan Zevares further confirms that the sixteen pieces of gold were, in any case, purchased by Shri Kapildeo Prasad from the said M/s. Chauhan Zevares Pvt. Ltd.”
6.3 The argument taken by adjudicating authority is that details of sales tax paid and non-existence of signatures of the buyer on the sale Bill No. 422, dated 28-8-2000 are essential to establish the genuine nature of the document. It is observed from the copies of the said bill and the original produced during the course of hearing that particular of sales tax registration number of M/s. Laljibhai Kanjibhai Soni are existing on Bill No. 422, dated 29-8-2000. The claim of the appellant is that final price agreed is inclusive of sales tax. If the seller of the gold bars not issuing a sale bill by not showing sales tax paid or payable on the goods then buyer cannot be faulted with. No investigation has been done to know whether the seller in fact had paid sales tax on the said transaction or not. It is further observed from copies of bill dated 29-8-2000, existing at pages 198 & 199 of the appeal No. C/88/2008, that Copy at page 198 was argued to have been provided by appellant and copy at page 199 has been obtained by the investigation done at Ahmedabad. Both contain the same details except that top of the copy as available at page 199 is blackened out due to improper photocopying above the words ‘Ornaments Merchant’. Signature of the sellers as well as general handwriting of both the documents is also seemingly similar. No opinion of the handwriting expert has been obtained by the Revenue to pursue their case that both are copies represent different documents. Further records maintained by M/s. Lljibhai Kanjibhai Soni, enclosed with the appeal memorandum of the claimant, also show huge transactions in gold bars and many of the transactions of purchase & sale of gold are cheque sales. It is not the case of the Revenue that investigation with respect to some of the other entries in the accounts of M/s. Laljibhai Kanjibhai Soni, were also made and all were found to be bogus. Such records are maintained for the period prior and after the period when Sale Memo No. 422, dated 29-8-2000 was issued. As many as 4733 pcs. of gold bars are purchased & 4152 are sold by M/s. Laljibhai Kanjibhai Soni in August, 2000 alone. In the light of the above glaring evidences it cannot be said that sale Bill No. 422, dated 29-8-2000 was created afterwards as a cover up as held by the Adjudicating authority.
6.4 Adjudicating authority in his finding is also giving a finding in the order-in-Original that there is no legal requirement to mention the details of gold bars in the register but in the same breath continues to say that it is a normal business requirement for proper accounting of stock register, which is astonishingly not done by Gold and Silver ornament merchants. It is observed that If there is no legal requirement to mention details of foreign marked gold bars in the stock register maintained by M/s. Laljibhai K. Soni then neither the seller nor buyer of such gold bars in the present transaction can be held responsible for not mentioning the details of gold markings in the bill. On this issue CESTAT, Mumbai in the case of S.K. Chains v. Commr. of Customs (Prev.), Mumbai [2000 (09) LCX 0202 = (Tri. - Mumbai)] made following observations in paras 4 to 7 of this order :-
“4. Section 123 of the Act is an exception to the normal rule of the burden being upon the prosecution to establish the guilt of the accused. Ordinarily every element that constitutes the offence has to be proved by the prosecution and this burden never shifts. But the burden shifts on the accused when Section 123 of the Act is invoked. After the initial burden of acquiring reasonable belief is discharged by the Customs, it is the offender who has to establish the lawful importation and acquisition of the gold. The appellants in this case have not questioned the existence of reasonable belief. They, however, consistently claimed that the gold was legally acquired.
5. Gold occupies a special position in the Indian psyche. Gold is the most liquid investment capable of being encashed at any time in any society or locality. Gold is routinely presented to temples and to relatives on ceremonial occasions. It is customary, even mandatory that a bride is given away with gold ornaments. The demand for gold in India is perennial. There was only one gold mine operating at Kolar near Mysore which would produce about 2 tons of gold every year. That has also stopped functioning. The gap between rising demand and scant supply was invariably filled by smuggling. Estimates vary but it is expected that during the 80s on an average 250 Tons of gold was smuggled into India every year. Any smuggling is bad for the economic health of the country as it would defeat the very purpose behind imposition of restriction on import. The case of gold is more acute. Unchecked smuggling of gold would threaten the very stability of the country's currency. There was a time when the paper currency in the country was backed fully by the gold held by the Govt. Over the last century the basis and the support for the currency has shifted from Gold reserves to the country's assets. But every Central Bank still keeps a gold reserve called Monetary Reserve. Thus, gold in the hands of the Central Govt. would make the currency strong and conversely the gold in the hands of the public would weaken the currency. To wean away the Indian public from the craze of the gold and also to ensure stability of the currency the Gold (Control) Act, 1968 was enacted. In fact, the provisions had existed earlier in the Defence of India Rules also. Notifications were issued prohibiting entirely import of gold except by the Govt. Provisions such as Section 120 were incorporated in the Customs Act which continued the liability to confiscation of any gold illegally imported notwithstanding any change in its composition and identity. Provisions of Gold (Control) Act restricted the activity of refining of gold limiting it to the Govt. of India Mint. Making of gold of purity higher than 995 was also prohibited since the imported gold generally is of the purity of 999. This prohibition would make it easy to establish the imported character of the gold. The combined effect of all the acts and prohibitions was to prevent smuggling, to make disposal of the smuggled gold difficult and to make it difficult for smugglers to defend themselves. In those days seizure of gold with foreign marking and of purity of 999 would generally suffice to establish the smuggled nature of the gold. Certain exceptions were made in the early 80s to these rigours. Licences were given to the manufacturers of gold jewellery for import of gold for manufacture into jewellery for export. At a later date, the rigidity of administration of these exemptions was reduced substantially. The banks were permitted to import and sell gold. At a later date passengers of Indian origin arriving into India after a prescribed period of stay abroad were permitted to import 5 kgs. of gold. Gold can also be imported on Special Import Licences. No restrictions were placed upon the disposal of gold so imported on payment of duty. According to official statistics the legal import of gold through these Schemes was of the following magnitude :
| Year | Import of Gold in Metric tones |
| | OGL | BAGGAGE | SIL | TOTAL |
| 1996 | - | 256 | 42 | 298 |
| 1997 | 62 | 398 | 68 | 548 |
| 1998 | 532 | 93 | 19 | 644 |
| 1999 | 513 | 39 | 18 | 570 |
| 2000 | 158 | 2 | 1 | 163 |
| (Up to June) | | | | |
6. As a result of such liberalisation there was ample availability of foreign marked gold in the market. In the absence of any serial numbers on the gold bars it became impossible to distinguish the gold imported legally and that imported illegally.
7. Thus, today there exists a very peculiar situation. On the one hand the Customs Act considers it necessary to ask a person to establish the legality of the origin of the gold seized from him while on the other hand in pursuance of the relaxations made in the Import Policy and the Baggage Rules framed under that very Act, there is a flood of foreign marked gold in the town. Such gold changes hands several times on importation. Since the repeal of the Gold (Control) Act in 1968, there is no legal requirement for the buyers and sellers of gold to maintain any registers nor is there any requirement to issue invoices under any Central Act.”
6.5 CESTAT, Kolkata in the case of Giridhari Dubey v. C.C. (P), Kolkata [2001 (11) LCX 0215) = (Tri. - Mumbai)] also made following observations in para 3(c) of this order :
“(c) In view of our findings we would set aside the order of confiscation of 32 pcs. of gold also relying at the findings of this Tribunal in the case of S.K. Chains reported in wherein in Para 10 of the reported decision the Tribunal has considered the effects of the liberalized policy as regards import and dealing in gold and thereafter concluded that that onus as placed under Section 123 was discharged in the facts of that case. We would also considering the onus under Section 123 has been discharged in the facts of this case by the appellants. If the Revenue wants that the gold dealers indulging in sale and purchase of foreign marked gold in India, should indicate the brand names and that discharge under Section 123 shall be only with respect to each brand then foreign marked gold should have been declared as one of the items under Chapter IVA of the Customs Act. We find that no such notification of placing foreign marked gold exists. Therefore the confiscation of the foreign marked gold for non satisfactory brandwise accounting as arrived at in the facts of this case was not called for.”
6.6 In view of the above observations and the settled proposition of law claimant appellant has discharged the onus of licit acquisition of foreign marked gold biscuits by producing a bill. It is also observed from the first statement dated 5-9-2000 of Smt. Chhabi Biswas and Shri Joy Gopal Biswas that it was only their belief that said gold biscuits were from Bangladesh. It is also not coming out of the investigation as to how both of them believed that gold in their possession was of Bangladesh origin. As already observed trace leading to Joynal, mentioned by Shri Joy Gopal Biswas in his very first statement dated 5-9-2000, was not followed by investigation to establish that seized foreign marked gold biscuits were in fact smuggled into India. Reasonable doubt of smuggled nature of foreign marked gold may be sufficient for the purpose of seizure of gold, by virtue of Section 123 of the Customs Act, 1962, but the same is not sufficient for confiscation under Section 125 of the Customs Act, 1962 when appellant has produced legal document of their licit acquisition. Accordingly, it is held that department is not able to establish the smuggled nature of seized foreign marked gold whereas claimant appellant has been able to discharge his burden by providing licit document of the purchase of 60 foreign marked gold biscuits. In the light of liberalized policy of the Central Government it cannot be held that all the foreign marked gold being bought and sold in India is of smuggled nature. Retraction of the earlier statement of Shri Joy Gopal Biswas by a second statement, recorded by investigation in judicial custody, has to be seen in the light of Supreme Court case law of Vinod Solanki v. U.O.I. [ (S.C.)]. Hon’ble Apex Court made following observations on the issue where retraction can be accepted.
“34. A person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat, etc. if the same is to be relied upon solely for the purpose of securing a conviction. With a view to arrive at a finding as regards the voluntary nature of statement or otherwise of a confession which has since been retracted, the Court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant factors. Law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc. but the requirement is that it may appear to the court as such.”
In the present case the statements of both Smt. Chhabi Biswas and Shri Joy Gopal Biswas were written by one of the panch witnesses Shri Chandan Dey. Even their first statements dated 5-9-2000 only convey that they believed that foreign marked gold came from Bangladesh. The trail of Joynal was not pursued by investigation. It was not existing in the statements of Smt. Chhabi Biswas & Shri Joy Gopal Biswas as to how the seized gold was brought into India and by whom. In the above factual matrix, subsequent statement of Shri Joy Gopal Biswas dated 22-9-2000 recorded in Judicial Custody was more detailed, authentic and the trail given by Shri Joy Gopal Biswas and Shri Nitya Gopal Biswas was followed by investigation. Shri Laljibhai K. Soni confirmed to have sold the said 60 gold biscuits to the claimant appellant. In view of the above observations made, the findings arrived at by the Adjudicating authority, can only raise strong suspicion about the smuggled nature of seized gold but suspicion howsoever grave cannot take the place of evidence when appellant has discharged his onus. It is accordingly held that statements recorded on 5-9-2000 were not reflecting the correct facts of the case. Accordingly, issue framed at para 5(i) above is decided in favour of the claimant appellant and against the Revenue.
7. So far as imposition of penalties upon the appellants is concerned it is opined that once the case is decided on merits in favour of the claimant appellant then penalties imposed upon all the appellants under Section 112 of the Customs Act, 1962 in these appeals, are not justified and are required to be set aside.
8. In view of the above observations, appeals filed by the appellants are allowed with consequential relief, if any.
(Pronounced in the Court on 4-12-2015)