PRITHVIRAJ B. JAIN Vs. COMMISSIONER OF CUSTOMS (P)

JUDGEMENT

(1.) THESE two appeals are preferred by the above appellant against the above captioned impugned order dated 6.12.88 praying for quashing and/or setting aside the personal penalty of Rs. 1 lakh each or such order as deemed it.

(2.) THE brief facts of the case are that on 17.1.88 on the basis of prior information officers of night mobile Squad, Rummaging and intelligence unit of Bombay custom preventive collectorate apprehended two persons, who parked the scooter No. BLK 7194 in the compound of Edul -Aic -Co -operative Housing Society Ltd., 13th Khetwadi Lane, Grant Road, Bombay -4. They gave their name as Prithviraj Babulal Jain (appellant). Owner of the scooter and Babulal Kapoorji Mali (Pillionrider). They were questioned whether they were carrying contrabond gold or in the scooter, for which they replied in the affirmative. Since it was a open road side, and gathering of large crowd, it was not practicable and feasible to carry out examination of the scooter bearing No. BLK 7194 and personal search of the above two persons, scooter was loaded in the customs vehicle and brought to the new customs house Bellard Estate along with the said two persons. In the presence of panchas, Custom Officers again questioned as above, for which Prithviraj Jain replied that two packets of gold of foreign origin were on the person of Babulal K Mali, which was confirmed by him before panchas. During his personal search, before Panchas and Prithviraj Jain two newspaper wrapped packets tied with white thread were recovered from the inner front pockets of the trouser worn by Babulal K. Mali. On opening one packet wrapped with adhesive tapes before Panchas, it was found to contain 20 gold bars of 10 Tolas each and other packet, on opening was found to contain 12 gold bars of 10 Tolas each with foreign markings, in all 32 Gold bars weighing 3731.2 gms valued at Rs. 7,23,852.80 (IMV) and Rs. 12,93,457.60 (LMV) were seized under the panchanama in the reasonable belief that same were smuggled into India hence liable for confiscation under the provision of Customs and Gold Control Act. Scooter No. BLK 7194 valued at Rs. 7500 LMU was also seized in the reasonable belief it was used to carry or transport contrabond gold under seizure. On personal search of Prithviraj Jain before Panchas old and new driving licences and one paper chit with details of accounts were recovered and seized under panchanama, as relevant and useful for further enquiry providings. Search of scooter did not yield any thing. News -paper wrappings, adhesive tapes, white thread along with the trouser worn by Babulal Kapoorji Mali were also seized, as used to conceal the seized gold bars. Statements under Section 108 of Customs Act was recorded of Babulal Kapoorji Mali and Prithviraj Babulal Jain. Both of them retracted them by their letters dated 8.2.88 and 27.1.88, which was rebutted by the department under the letter dated 17.2.88, as an after thought, and falsely made solely with the intention to alleviate the responsibility and burden of proof ownership of gold under seizure. Persuant to the specific information gold was to be delivered at plot No. 1. 1st floor, Building No. 232. Edul -Aie -Co -op. Hsg. Society, Ltd. 13th Khet Wadi Lane Grant Road, Bombay, which was found to be occupied by Sri Harishkumar G. Sharma and his father Goverdhandas Sharma, 65 yrs., at the time of search of the premises. They did not respond to summons and were not traceable to record statements. Residential premises of appellant and Babulal K. Mali were searched but nothing incriminating was found. They were arrested on 18.1.88 and were produced before Juvenile Magistrate (Babulal K. Mali) and Additional Chief Metropolitan Magistrate (Prithviraj B. Jain) and were released on bail.

(3.) IMPORT of gold into India unless covered by a valid permit issued by Reserve Bank of India is prohibited in terms of Section 13(i) of FERA 1973 and vide Govt. of India M.F Notification 12(11) F 1.48/25/8143 (as amended) and under Section 67 of the above Act, the said prohibition is deemed to have been imposed under Section 11 of Customs Act. Since no such permit and/or Import Trade Control Licence for import of the gold is forthcoming, nor has any evidence been produced of the legal import and/or acquisition, it is prima facie indicated that the gold is smuggled and hence liable to confiscation under Section 111(d) of Customs Act and 71 (1) of Gold Control Act. Scooter used on means of Transport of gold under seizure is also liable for confiscation under Section 115(2) of Customs Act. Paper wrapping, adhesive tapes, white thread and trousers are also liable to confiscation under Section 118 read with Section 119 of Customs Act. Concealment, non -declaration of gold made seizure, possessed/acquired/accepted/received in contravention of Section 8(1) Gold Control Act renders the same liable under Section 111(i) and (m) of Customs Act and Section 71(1) of Gold Control Act. Under Section 123 of Customs Act burden of proof was in the person/persons from whose possession the gold have been seized. It is also prima facie indicated that Babulal Kapoorji Mali, Prithviraj Babulal Jain, Harishkumar Govardhandas Sharma and Govardhandas Sharma did or omitted to do an act which act or omission rendered the gold seized liable to confiscation under Gold Control Act, 1968 and Customs Act, 1962 or had abetted the doing or omission of the said act and have thus rendered themselves liable to penal action under Section 74 of Gold Control Act and Section 112 of Customs Act. Accordingly a memorandum of notice was issued on 5.7.88 to show cause and explain to CCR Bombay within 30 days from the date of receipt of the same, as to why the gold seized should not be confiscated and why penalty should not be imposed them under both the above acts. Prithviraj Jain (appellant) filed reply on 17.8.88. Babulal Kapoorji Mali filed reply on 20.8.88. Others were not served for want of availability. Personal hearing was held on 3.11.88 Counsel for both the above cross -examined superintendent KVP UNNI, I.O., R.S, Negi, seizing officer. Heard the counsel. After going through the written submission and records, Collector of Customs (Preventive) Bombay passed the impugned order, confiscating 32 gold bars seized under Section 111(d) of the Customs Act and under Section 71(1) of Gold Control Act, and absolutely confiscated under Section 118 read with Section 119 of Customs Act of paper wrappings, adhesive tapes, white thread and trouser, and also confiscated scooter No. BLK 7194 under Section 115(2) of the Customs Act with redemption fine of Rs. 3500, and imposed penalty of Rs. 1 lakh each on Prithviraj Jain, Harish Govardhandas Sharma and Govardhandas Sharma both under Section 112 of the Customs Act and Section 74 of Gold Control Act, and Rs. 15,000 each on Babulal K. Mali under the same provisions. Hence these appeals.