UNION OF INDIA Vs. RAJENDRA PRABHU

JUDGEMENT

(1.) The respondent herein was intercepted in the early hours of 22nd October, 1994 by the Circle Inspector of Police, Chalakudy while he was travelling in a car. The Police recovered 30 gold biscuits of foreign markings from him and the respondent was handed over to the Superintendent of Customs. SCP Unit, Kodungalloor. It is stated that the respondent made a statement the same day to the Customs authorities that he had purchased the said gold from one P. Thomas of Kottayam for Rs. 15 lakhs and that he did not have any document to prove the licit importation of the said gold. Therefore, the gold was seized under the Customs Act under a reasonable belief that the gold biscuits were liable to be confiscated under the provisions of the Customs Act. On 23-10-1994, the respondent made a statement before the Customs Officers wherein he reiterated that the gold in question was purchased from one P. Thomas and gave a telephone number as belonging to said Thomas. The efforts of the Customs Officers to locate the said Thomas proved futile as he was found to be a non-existing person and the telephone number given by the respondent was found to be a telephone registered in the name of State Bank of Travancore, Mannanam Branch.

(2.) On 28-10-1994, i.e., 6 days later, one Balan wrote a letter to the Central Excise Superintendent, SCP Unit, Kodungalloor and claimed that he had bought 42 gold biscuits from Dubai on 19-10-1994 and cleared the same on payment of customs duty at Trivandrum Airport. He also stated that out of the same he had handed over as many as 30 gold biscuits to the respondent herein for selling them at Coimbatore. He enclosed a copy of the receipt indicating the payment of duty on 42 gold biscuits. After the receipt of the letter of said Balan i.e. on 31-10-1994 the respondent wrote a letter corroborating the claim of said Balan. In a subsequent statement made on 14-11-1994 he retracted the statement made to the Customs Officers on 23-10-1994 and affirmed the claim of said Balan.

(3.) Both the respondent as well as Balan were issued show cause notices by the Customs authorities asking why the gold in question should not be confiscated and penalty imposed under the Customs Act. Pursuant to the said show cause notice, the respondent as well as Balan filed a reply and after hearing the parties the Commissioner of Central Excise and Customs, Cochin by his Order dated 12-1-1996 held that the gold seized from the respondent was not duty-paid and not imported legally and accordingly was liable to confiscation under Section 11(a) of the Customs Act 1962. He further held that the respondent from whose possession the gold was seized was liable for a penalty under Section 112(b) of the Customs Act, 1962 and accordingly while confiscating the gold in question imposed a penalty of Rs. 5 lakhs on the respondent. The said Commissioner, however, came to the conclusion that the said Balan was only lending his name in order to make the importation of gold licit, hence he has not committed any offence punishable under Section 112(a) and (b) and held him not liable to any penalty under Section 112 of the Customs Act.