Full Judgment Text
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CASE NO.:
Appeal (civil) 1204 of 2007
PETITIONER:
Commissioner of Customs (Preventive)
RESPONDENT:
Vijay Dasharath Patel
DATE OF JUDGMENT: 08/03/2007
BENCH:
S.B. Sinha & Markandey Katju
JUDGMENT:
J U D G M E N T
(Arising out of S.L.P. (C) No. 7947 of 2006)
With
CIVIL APPEAL NO. 1206/2007 @ S.L.P.(C)No.10603 of 2006
CIVIL APPEAL NO. 1207/2007 @ S.L.P.(C)No.11522 of 2006
CIVIL APPEAL NO. 1208/2007 @ S.L.P.(C)No.13000 of 2006
CIVIL APPEAL NO. 1209/2007 @ S.L.P.(C)No.14311 of 2006
CIVIL APPEAL NO. 1205/2007 @ S.L.P.(C)No.14312 of 2006
S.B. Sinha, J.
Leave granted in S.L.Ps.
These appeals are directed against a judgment and order dated 30th
January, 2006 passed by the High Court of Gujarat at Ahmedabad in Tax
Appeal Nos. 1923, 1924, 1925, 1930, 1928 and 1929 of 2005 respectively,
whereby and whereunder the appeal preferred by the appellant herein was
dismissed holding that no substantial question of law for its consideration
had arisen therein. The factual matrix obtaining herein is not in dispute.
Eight persons including the respondents herein were detained for carrying
551 gold biscuits of foreign origin, the details whereof are as under :
Sr.No.
Name
Foreign
Mark of
gold
Quan-
tity
Nature of
possession
of gold
bars
1.
Sh. Shailesh Ratilal
Patel, Proprietor of
M/s. S.K. Jewellers
ARGOR
SUISSE
100
Kept in
4 plastic
packets
each of
25 bars
2.
Sh. Vijaybhai
Dashrathlal Patel,
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Proprietor of M/s.
Paras Bullion
(Respondent herein)
CREDIT
HERAEUS
90
A small
green bag
carried by
him
3.
Smt. Rasilaben Rathod
ARGOR
HERAEUS
95
Under her
attire tied
with a
waist belt
4.
Shri Jaswantbhai K.
Patel
ARGOR
HERAEUS
PAMP
SUISSE
JOHNSON
MATHEY
95
09
09
Hidden in
sole of the
shoes
5.
Bhikhabhai T.K. Patel
CREDIT
SUISSE
55
Hidden in
sole of the
shoes
6.
Arvindbhai K.K. Patel
ARGOR
HERAEUS
55
Hidden in
sole of the
shoes
7.
Shri Nandubhai Brijlal
Soni
UBS
51
Hidden in
sole of the
shoes
8.
Nathubhai @ Nitinbhai
B. Patel
CREDIT
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SUISSE
55
Hidden in
sole of the
shoes
Out of the said 551 of gold biscuits, 200 belonged to Shri Vijaybhai
Dashrathlal Patel, Proprietor of M/s. Paras Bullion, whereas 351 belonged to
Shri Shailesh Ratilal Patel, Proprietor of M/s. S.K. Jewellers. Both of them
were arrested. They made their statements under Section 108 of the
Customs Act, 1962 (’the Act’, for short). Shri Vijaybhai Dashrathlal Patel,
respondent herein, allegedly, in his statement disclosed that he had
purchased the said 200 gold biscuits from one Ridhi Siddhi Bullion Ltd. who
had produced a delivery challan of ABN AMRO Bank issued in its favour.
Other than the said delivery challan, allegedly, he could not produce any
other document. The purported letter of ABN AMRO Bank dated
12.11.1999 addressed the Assistant Commissioner of Customs, Ahmedabad
is in the following terms :
"We wish to inform you that we had sold 100 Ten Tola
Gold Bars and 150 Ten Tola Gold Bars to the captioned
company under our invoice numbers 99/BAR/138 dated
25th October, 1999 for Rs.55,53,640/- and 99/BAR/139
dated 25th October, 1999 for Rs.81,49,025/-.
The above Ten Tola Gold Bars were out of the
consignment stock of 1000 TT bars imported by us from
Credit Suisse First Boston, Zurich under AWB No.085-
1490-2753 dated 20th September, 1999. We had paid the
applicable customs duty at the time of clearance of the
consignment on 22nd September, 1999. We also confirm
that the delivery was effected on our behalf by M/s.
Brinks Arya (India) Pvt. Ltd., Ahmedabad.
This letter has been issued at the request of M/s.
Riddhisiddhi Bullions Ltd. We hope the above
information is sufficient and shall be glad to furnish any
further information you may require."
According to him, he had sold 200 gold biscuits to one Devangbhai
Patel on 23.10.1999, but had no document to establish the same or that he
had not received any payment therefor. It was the further statement of the
said respondent that he had sold 300 gold biscuits to Shailesh Patel, but
again therefor no commercial invoice or delivery challan had been issued. A
further statement was made to the effect that out of the said 300 gold
biscuits, 130 having UBS marking were purchased from one K.L. Chokshi
and remaining 170 were purchased from different parties, but again therefor
no payment was made either in cash or cheque. Statement of Shailesh Patel
was recorded on 24.10.1999 under Section 108 of the Act when he disclosed
that he had purchased 300 gold bars from Paras Bullion but no bill had been
issued therefor nor any payment has been made by him. On the said date,
statement of Naresh Chokshi was also recorded, wherein, allegedly, he did
not make any statement to the effect that he had sold any gold bar of UBS
mark to Paras Bullion. The second statement of Shailesh Patel was recorded
on 29.10.1999, wherein he reiterated his earlier statement, stating :
"...On being further questioned, I have to state that the
details of the receipt/purchase of the said foreign mark
gold biscuits are narrated in the prior statement given by
me..."
In his statement recorded on 28.10.1999, Vijay Dasharath Patel had
made a statement that details of purchases of the gold biscuits could be
furnished only upon perusal of his books of accounts.
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We need not refer to the other statements made by other persons
recorded by the Customs Officers on that date, being not relevant for the
purpose of this case. We may, however, notice that proceedees retracted
from their statements on 11.11.1999, alleging that he had the requisite
documents to support their contentions that gold seized were not smuggled
ones.
However, according to Vijay Dasharath Patel, 300 gold bars were sold
to M/s. S.K Jewellers, out of which 201 were purchased from M/s. K.L.
Chokshi and the rest were purchased from other jewellers. According to
him, he did not maintain any stock register. He further stated that he had
sold 200 gold bars to Patel Bullion on 23.10.1999, although he had not
received any payment from the said vendee.
A show cause notice was issued upon the respondents on 1.3.2000
asking them to show cause as to why the seized gold bars should not be
confiscated and penalty should not be imposed. Cause having been shown
and the matter having been heard, the Commissioner, by his order dated
28.2.2001, inter alia, held :
"....substantial number of foreign marked gold bars i.e.
361 pieces, were found to have been concealed in the
shoes, body parts of the noticees......
....In their initial statements recorded before the Customs
Officers on 24.10.99 both Shri Shailesh R. Patel and Shri
Vijay D Patel admitted that they had no documents for
legal importation....
....Section 123 of the Customs Act, 1962, which casts the
burden in respect of "Gold", on the person from whose
possession it is recovered, to prove that it is not
smuggled...
....Statements were not recorded under any duress or
mental torture."
According to the Commissioner of Customs, the respondents had not
discharged their burden of proof in terms of Section 123 of the Act, in
support whereof the following findings were recorded :
? The delivery challan issued by ABN AMRO Bank
to Riddi Siddi Bullion does not in any way account
for the possession of gold bars by Vijay Dashrath
Patel.
? Shailesh Patel although stated that he had
purchased 300 gold bars from Paras Bullion, no
bill was issued in his name by the aforesaid firm
nor he has made any payment towards purchase of
300 foreign marked gold bars.
? Statements dated 24.0.1999 were retracted on
29.10.1999 but retractions cannot be relied upon.
? In the absence of any mention of identity or brand
specifications of the gold bars and also in face of a
clear admission that no payments have been made
or received and no bills having been issued, it is
fully established that all 500 gold bars were not
legally imported or acquired.
? The bills bearing Nos.5877, 5960 and 5936 which
have been produced by Vijay Patel to prove his
possession of 200 gold biscuits cannot be relied
upon at all. The gold biscuits seized are not of the
same brand for which the bills have been
produced.
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? On 24.10.1999, Vijay Dasharath Patel has stated
that he had purchased 200 pieces of foreign mark
gold bars of "CREDIT SUISSEE" mark from M/s
Riddi Siddi Bullion on 23.10.1999. However,
from the statement of Shri Dinesh authorised
signatory of M/s Riddi Siddi Bullion did not
mention whether the gold biscuits delivered to Mr.
Vijay Dasharath Patel were of CREDIT SUISSEE
mark. It was also observed that the alleged Bill
No.294/GL/99/2000 dated 23.10.1999 also does
not show the markings of the brand name of the
gold biscuits.
? Statement of Ashwinbhai Patel is relied upon to
show that Bill No.11931 was a complete after
thought and it had been in fact prepared on
24.10.1999. Ashwinbhai Patel had stated that his
maternal nephew Shri Devang Patel had phoned
him on 24.10.1999 and informed him about the
recovery of the gold biscuits by police and on
being called by him, he had gone to the residence
of Shri Vijay Dasharath Patel on 24.10.1999 and
he had prepared the Bill No.11931.
? Both Vijay Dasharath Patel, Proprietor of Paras
Bullion and Shailesh Patel admitted that no
payment has made for the 300 pieces of foreign
mark gold bars covered by Bill No.11931.
Further, the alleged Bill No.294/GL/99/2000
purported to be issued by Riddi Siddi Bullion in
favour of Paras Bullion for 350 gold bars does not
contain the details regarding identity/brand of the
gold bars nor the printed or pre-printed Sl.No. of
the Bill. Also no evidence of payment made by
M/s Paras Bullion to M/s Riddi Siddi Bullion has
been produced.
? M/s Riddi Siddi Bullion had relied upon Bill
No.2753 dated 22.10.1999 issued by Anjali Exim
Pvt. Ltd. in favour of M/s. Riddi Siddi Bullion for
200 gold brars of UBS mark. However, it is found
that there are no gold biscuits of foreign origin of
UBS brand among the 500 gold biscuits and,
therefore, the said bill has no relevance with the
gold biscuits under seizure.
? The plea taken by Vijay Dasharath Patel in his
statement dated 11.11.2004 regarding the gold
biscuits in his possession, is an after thought and
the same is not acceptable. In view of the facts
which have been initially stated in the statement
dated 24.10.1999 and which have been
corroborated by Shailesh Patel in his statement
dated 24.10.1999, it is established that there was
no document to show the source of 300 gold bars
sold by Vijay to Shailesh Patel.
? It was found on close scrutiny of the documents
that bills, delivery challans, vouchers produced by
the notices that none of these is serial numbered or
pre-serial numbered. Ad hoc numbers have been
given to these documents and hence these do not
inspire confidence and hence the documents
produced have no credibility.
? Although it was admitted by Vijay Dasharath Patel
and Shailesh Patel that no bills, vouchers, delivery
challans were issued in respect of the sale of 300
gold bars. Entries have been made and Bill
No.11930 and 11931 have been subsequently
prepared on 24.10.1999 to legalise the sale.
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? 72 entries of purchase and sale have been made in
the stock account of M/s Paras Bullion after the
alleged transactions of bills No.11930 and 11931.
It is humanly impossible that all these entries can
be made within one hour and that the entries in
which stock register of M/s Paras Bullion were
made with a view to create the impression of legal
purchase and sale of 500 foreign mark gold
biscuits.
? No man of ordinary prudence will transport legally
imported foreign mark gold biscuits in the way
notices have been found to be doing. The facts
and circumstances of the recovery of the gold bars
by way of concealment in shoes and other body
parts of the notice is a positive circumstancial
evidence to suggest that the gold was illegally
acquired and hence it was transported in a
surreptitious and clandestine manner more often
adopted by smugglers.
? Satishbhai Patel, who is the accountant of M/s S.K.
Jewellers, was also liable as he had abetted
Shailesh Patel in contravention of the various
provisions of the Customs Act.
? All the carriers of gold bars had not demanded any
document in support of the illicit import/
acquisition of the gold biscuits received by them
from Satish Patel and Vijay Dasharath Patel and as
such have abetted Shailesh Patel and Vijay
Dasharath Patel in committing contravention of
law.
? Accordingly, it was directed that the 500 gold bars
weighing 58.320 Kgs. valued at Rs.2,70,00,000/-
be confiscated under section 111(D) of the
Customs Act. Penalties were also imposed on the
notices."
Appeals filed by Respondents before the Tribunal, by reason of an
order dated 5.6.2003 were dismissed.
Applications for rectification of mistakes were filed alleging that
various aspects had not been considered in the original order. Special Civil
Application No. 5468 of 2004 was also filed before the High Court of
Gujarat at Ahmedabad against the said order of 5.6.2003.
The Tribunal by an order dated 7.1.2004 allowed the applications for
rectification of mistakes filed by the respondents.
Against the said order dated 7.1.2004, the Revenue filed Special Civil
Application No.2640 of 2004.
The High Court set aside the order dated 7.1.2004 passed by the
Tribunal in the applications for rectification of mistakes and on the same day
allowed the said Special Civil Application filed by the respondents, in terms
whereof the order of the Tribunal was set aside and the matter was directed
to be considered afresh.
The Tribunal, thereafter, passed an order on 30.9.2005, wherein, inter
alia, it was held :
"......This finding of the Commissioner cannot be upheld
since the Appellant has produced documentary evidence
of having purchased/procured the 200 bars from RBL
who in turn have got the same from M/s. ABL Amro
Bank, Ahmedabad, the importers of TT bars at
Ahmedabad, one of the permissible route as per the
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findings of the Commissioner. In any case, the
Commissioner and the department do not reject the letter
dt.12.11.99 of ABN Amro Bank certifying "CREDIT
SUSSE" TT bars to RBL nor does the Commissioner find
RBL to have given forged/fabricated delivery
challan/invoices to the appellants, ABN Amro Bank or
RBL or M/s. K.L. Chokshi or and M/s. Amrapali
Industries are not being questioned on their credibility
the TT bars supplied by them cannot be found to be non
duty paid or and cleared from an unauthorized port
without payment of duty and thus liable to confiscation
under Section 111(d) of the Customs Act, 1962...
...Therefore, there was no reason to believe that gold
covered by the ABN Amro Bank document was not duty
paid....."
Dealing with the submissions made on behalf of the proceedees, it
was held :
"....These submissions have force and discharge the
burden of the TT bars to be duty paid and not smuggled...
...Further, in their statements recorded on 24.10.1999
itself, everybody i.e. Dinesh C. Jain of RBL, Sh. Naresh
K. Chokshi of M/s. K.L. Chokshi and Shri Yeshwant A.
Thakkar of Amrapali Ltd., not only admitted having sold
the gold to the appellants but also provided documentary
evidence of having purchased the gold from Banks. By
not issuing any Show Cause Notice to those persons, we
find that the Revenue agrees and were fully satisfied that
the gold was legally acquired by them and supplied to the
appellants.
? Nandubhai Soni, one of the carriers was let off
although he was similarly placed as other carriers.
? Transportation of gold in shoes appears to be a
normal fashion of transporting gold bars, by carriers
in the bullion market, irrespective of the fact
whether they have bills or vouchers.
? Satishbhai Patel, the Accountant of S.K. Jewellers
cannot be said to have abetted Shaileshbhai Patel by
preparing ante dated bills. The proven practice of
sales in this market would led us to find nothing
amiss in invoices being written/prepared with or
without brand marks.
? ABN AMRO Bank letter dated 12.11.99 confirms
that the gold was legally imported.
? Although the documents do not show that the gold
bars were of a particular origin, there is no statutory
requirement which prescribe invoices to describe
foreign marks.
? Admitted fact that no payments were made as on the
date of seizure in respect of the seized gold bars.
However no adverse inference could be drawn.
? We do not consider anything to be amiss in
payments for the 500 bars not having been effected.
? We are arriving at our findings that the entire 551
gold TT bars..... To be duty paid gold....
? Dinesh Jain, Naresh Chokshi and Yeshwant Thakkar
of Amrapali admitted having sold gold bars to the
Appellants. The Revenue had not issued any show
cause to these persons.
? Confiscation order and penalty set aside."
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As indicated hereinbefore, on an appeal preferred against the said
judgment by the Revenue, the High Court refused to interfere on the premise
that no substantial question of law arise for its consideration.
Mr. Mohan K. Parasaran, learned Additional Solicitor General
appearing for the Union of India would contend that the High Court
committed a manifest error in opining that no substantial question of law
arose for its consideration, although, it is evident that the Tribunal had failed
to consider the well reasoned judgment of the Commissioner of Customs in
its proper perspective. The learned counsel urged that the High Court failed
to notice that the Tribunal had referred to several trade practices in support
whereof the proceedees did not adduce any evidence. It was submitted that
the Tribunal furthermore failed to consider the question as to whether the
proceedees had discharged their burden of proof cast upon them in terms of
Section 123 of the Act.
Mr. Joseph Vella Palli and Mr. Anand Narain Haksar, learned
Senior Counsel appearing on behalf of the respondents, on the other
hand, would submit that from a bare perusal of the order of the learned
Tribunal, it would appear that the reasonings of the Commissioner of
Customs had been considered in great details therein and, thus, this Court
should not interfere therewith. It was urged that no question of law was
raised in relation to the specific findings of fact arrived at by the Tribunal
and in that view of the matter, having regard to the provisions of Section
130 of the Act, the findings of fact being binding on the High Court, no
error has been committed by it in opining that no substantial question of
law arise for its consideration.
Section 130E of the Customs Act, as it stood then, provided for an
appeal from an order passed in appeal by the Appellate Tribunal, save and
except those specifically mentioned therein, only in the event a satisfaction
is arrived at by the High Court that the same involves a substantial question
of law.
Before the High Court, as also before us, several questions of law
have been raised. We, however, in view of the order proposed to be passed,
need not deal with all of them in details.
We are not oblivious of the fact that the High Court’s jurisdiction in
this behalf is limited. What would be substantial question of law, however,
would vary from case to case.
Moreover, although, a finding of fact can be interfered with when it is
perverse, but, it is also trite that where the courts below have ignored the
weight of preponderating circumstances and allowed the judgment to be
influenced by inconsequential matters, the High Court would be justified in
considering the matter and in coming to its own independent conclusion.
{See Madan Lal vs. Mst. Gopi & Anr. [AIR 1980 SC 1754].}
The High Court shall also be entitled to opine that a substantial
question of law arises for its consideration when material and relevant facts
have been ignored and legal principles have not been applied in appreciating
the evidence. Arriving at a decision, upon taking into consideration
irrelevant factors, would also give rise to a substantial question of law. It
may, however, be different that only on the same set of facts the higher court
takes a different view. {See Collector of Customs, Bombay vs. Swastic
Woollens (P) Ltd. & Ors. [(1988) Supp. SCC 796]; and Metroark Ltd. vs.
Commissioner of Central Excise, Calcutta [(2004) 12 SCC 505].}
Even in a case where evidence is misread, the High Court would have
power to interfere. {See West Bengal Electricity Regulatory Commission
vs. CESC Ltd. [(2002) 8 SCC 715]; and also Commissioner of Customs,
Mumbai vs. Bureau Veritas & Ors. [(2005) 3 SCC 265].}
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In M/s. Dutta Cycle Stores & Ors. vs. Gita Devi Sultania & Ors.
[(1990) 1 SCC 586], this Court held :
"Whether or not rent for the two months in
question had been duly paid by the defendants is a
question of fact, and with a finding of such fact, this
Court does not ordinarily interfere in proceedings under
Article 136 of the Constitution, particularly when all the
courts below reached the same conclusion. But where
the finding of fact is based on no evidence or opposed to
the totality of evidence and contrary to the rational
conclusion to which the state of evidence must
reasonably lead, then this Court will in the exercise of its
discretion intervene to prevent miscarriage of justice."
We have hereinbefore noticed the judgment of Tribunal as also the
one rendered by the Commissioner of Customs. The Commissioner of
Customs, inter alia, has gone into the entire materials brought on records by
the parties. It has taken into consideration a number of circumstances in
arriving at its findings. The Tribunal, however, as noticed hereinbefore,
inter alia, not only proceeded on the basis that one of the carriers had been
let off but also the purported normal fashion of transport of gold bars for
which no evidence was brought on records.
Mr. Joseph Vella Palli would submit that the Tribunal consists not
only of judicial member but also of technical member and in that view of
the matter the Tribunal could take judicial notice of the trade practice
prevailing in a particular trade and, thus, no illegality has been committed
thereby. No evidence, however, admittedly, was laid in relation to the
purported trade practices. We, therefore, cannot accept the said
contention. This Court, in Hukma vs. State of Rajasthan [AIR 1965
SC 476], laid down the law in the following terms :
".....Learned counsel rightly pointed that while S.178-A
has the result of placing the burden of proof that the gold
was not smuggled on the accused, it is of no assistance to
the prosecution to prove that the accused was carrying
the gold knowingly to evade the prohibition which was
for the time being in force with respect to the import of
gold into India. Once, however, it is found, as it must be
found in this case, in consequence of the provisions of
S.178-A (the accused has not tried to discharge the
burden that lay on him that the gold was not smuggled)
that he was carrying smuggled gold, the circumstances
under which the gold was discovered, the manner in
which he was carrying the gold, the considerable quantity
of the gold that was being carried and the form in which
gold was being carried, namely, blocks and bars in which
the major portion of the gold was found, all these
circumstances establish beyond a shadow of doubt that
the accused was carrying the gold knowingly and with
the intention of evading the prohibition that was in force
with respect to the import of gold into the country. Mr.
Kapur tried to argue that when gold is carried by persons,
they often carry it in this manner in a nouli concealed
under trousers. That may well be so. Here, however,
there is an additional circumstance that a pointsman of
the Railway, not expected to have so much gold in his
possession, was carrying the gold which was, as already
mentioned, in six blocks and 22 bars apart from some
small pieces and one pair of murkees. The total quantity
was as much as 286 tolas and 11 annas, that is, about
three kilograms. When all these circumstances are taken
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together, it is not possible to accept learned counsel’s
suggestion that he might be carrying the gold innocently
having purchased it from somebody. In our opinion, the
High Court has rightly held that all the ingredients of the
offence under S.167(81) of the Sea Customs Act have
been established...."
The Tribunal furthermore noticed only the last statements made by the
proceedees. The purported subsequent statements, in the light of their earlier
statements, were not taken into consideration.
It had furthermore not taken into consideration in regard to the
connectivity of the gold bars imported, in respect whereof the custom duty
had been paid and the gold bars seized.
We, therefore, do not accept the contention of Mr. Vella Palli that no
question of law had been raised. It was done by the Revenue in its grounds,
stating :
"That the Ld. Tribunal has erred in holding that the
finding of the commissioner is not sustainable because
Shri Vijay D. Patel, Prop. of M/s. Paras Bullion has
produced documentary evidence of purchasing 200 bars
from M/s. Riddhisidhi Bullion Ltd., which was received
by the said Riddhisidhi Bullion Ltd. from ABN Amro
Bank, Ahmedabad. It is worthwhile to note that the
document was not accompanying the consignment at
time of detection by the police and was produced
subsequently at the time of statement of Shri Vijay D.
Patel, on 24-10-1999. The Ld. Tribunal has recorded this
finding by stating reasons that the commissioner and the
department has not rejected the letter dated 12.11.1999 of
the ABN Amro Bank certifying "Credit Suisse" TT bars
to RBL nor they have alleged that RBL has given
false/fabricated delivery challans/invoices to the noticees.
It is respectfully submitted that the Ld. Tribunal has
recorded the above finding without any material or
evidence on record and without even looking into the
content of the letter dated 12.11.1999 of the ABN Amro
Bank. It is submitted that the bank’s letter referred to
invoices dated 25.10.1999 and in such circumstances the
question of effecting delivery by the bank to the
authorized dealer under delivery challan dated
23.10.1999 which is two days prior to the date of invoice
is not credit worthy. It is also against normal trade
practice and makes the transaction suspect. Further, a
bare glance at the documents of the bank undoubtedly
establishes that the stock of FM GB shown in the
delivery challan does not establish that the said challan
relates to the gold pieces seized under panchnama dated
28/29.10.1999. It is submitted that no convincing record/
evidence is led before the competent authority that the
200 seized pieces of gold bars are clearly linked/part
(including the same brand name) of the stock shown in
the aforesaid delivery challans and invoices. Thus, a
vital link of sale transaction of the seized gold is not fully
established. It is the duty of the person purchasing
foreign mark gold bars to see that the correct description
of the goods is entered in the respective challans"
The aforementioned letter dated 12.11.1999 issued by the ABN
AMRO Bank was the main fulcrum of the reasonings of the Tribunal. It
was, therefore, in our considered view, required to be considered at some
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details. Even the error of law committed by the Tribunal in relying upon the
trade practices had expressly been taken by the Revenue, stating :
"The Ld. Tribunal has erroneously held that the proven
practice of sales in gold/bullion market lead to finding
that there is nothing amiss in invoices being
written/prepared with or without brand marks,
subsequent to sales and deliveries and thus the penalty as
arrived on the Shri Satishbhai A. Patel is to be set aside.
It is submitted that Shri Satishbhai A. Patel has also
actively concerned himself in abetting the smuggling of
the seized gold as no prudent buyer or seller will buy or
sell such a huge quantity of gold without mentioning
individual mark or details."
Similarly, in regard to the fact of non-payment of consideration had
been raised by the Revenue in its grounds.
In regard to the purported retracted statements, the Commissioner
dealt with the matter elaborately, opining :
"....The retractions are in the form of two separate
(almost identical) letters both dated 29.10.99 from Shri
Shailesh R. Patel and Shri Vijay D. Patel wherein they
have merely stated that their statements were taken
forcibly. They also said that the Police and the Customs
Officers had illegally detained them in "their own
premises". Similarly, telegrams have been received on
29.10.99 from other Noticees alleging wrongful
confinement by the Police & Customs officers........
It is observed that all these retractions are belated, i.e.
after 6 days, during which the investigations had been
carried out. The Noticees or their family members could
have sought the intervention of the senior officers of the
department during this period i.e. 23.10.99 to 28.10.99 if
there was any truth in their allegations of wrongful
confinement or detention. This has not been done.
Moreover, they have not produced any evidence to
support that any physical or mental torture was inflicted
on them.
The CEGAT in their decision in the case of P.
Pratap Rao Sait versus Collector of Customs, Cochin
reported at 1988 (33) ELT 433 (Trib.) had held that:
"The detailed statement before Customs officers prima
facie merits acceptance and by mere retraction, the
original statement does not lose all evidentiary value."
Since the retractions are made belatedly and without any
supporting evidences, these have no evidentiary value in
the eyes of law."
It was furthermore held by the Tribunal that the bills had been
prepared subsequently.
The learned Commissioner had opined that their existed serious
discrepancies in the bills or vouchers. The Tribunal, in our opinion, should
have dealt with the aforementioned findings of the Commissioner.
Mr. Vella Palli has strongly relied upon Meenakshi Mills, Madurai
vs. The Commissioner of Income Tax, Madras [1956 SCR 691], wherein
it was held :
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".....On these facts, the Tribunal came to the conclusion
that the contentions of the Department had been fully
established, namely, that the intermediaries were
dummies brought into existence by the appellant for
concealing its profits, that the sales standing in their
names were sham and fictitious, and that the profits
ostensibly earned by them on those transactions were, in
fact, earned by the appellant, and should be added to the
amounts shown as profits in its accounts. The point for
decision is whether there arises out of the order of the
Tribunal any question which can be the subject of
reference under section 66(1) of the Act. Under that
section, it is only a question of law that can be referred
for decision of the court, and it is impossible to argue that
the conclusion of the Tribunal is anything but one of
fact."
There is no dispute as regards the proposition of law but, as noticed
hereinbefore, same question of law did arise for consideration of the High
Court.
For the reasons aforementioned, we are of the opinion that the High
Court may not be entirely correct in holding that no substantial question of
law arise for its consideration. Ordinarily, although, we have referred the
matters back to the High Court, having regard to the fact that we have
ourselves examined the findings of the Tribunal and the findings of the
Commissioner, we are of the opinion that instead of remitting the matter
back, interest of justice would be met if upon setting aside the judgment of
the High Court and Tribunal the matters are remitted to the latter for
considering them afresh. The parties shall be entitled to raise their
respective contentions before the Tribunal. We intend to make it clear that
our reference to the findings of the Commissioner as also the Tribunal was
made only for the purpose of considering as to whether any substantial
question of law arose for consideration before the High Court and for no
other purpose. We may not therefore be understood to arrive at any finding
in regard to any question which would arise for the consideration of the
Tribunal.
For the reasons aforementioned, the appeals are allowed. The
impugned judgments of the High Court as well as the order of the Tribunal
are set aside. The matter is remitted to the Tribunal for consideration thereof
afresh.