Important point
Where customs authorities confiscation of smuggled gold was upheld by two statutory authorities, High Court should not interfere with their concurrent findings of fact supported by evidence in writ jurisdiction.

Headnote:(i) Customs Act, 1962—Section 11(2)—Confiscation of imported gold biscuits recovered from respondent on ground that it was imported illegally without duty paid—Penalty imposed under Section 12(b)—Explanation that respondent purchased it from third person Mr. Balan not believed—Commissioner ordered confiscation and penalty—Tribunal upheld confiscation but reduced penalty—High Court reversed the Tribunal—Appeal to Supreme Court—Whether High Court was right in reversing concurrent findings of two statutory authorities in limited jurisdiction under Article 226 and 227? (No).
       These findings of the authorities below to which we have made a brief reference to show that the findings are based on the material on record and, in our opinion, are arrived at on a reasonable and legitimate assessment of the evidence on record. (Para 9)
       Held : The High Court, however, by the impugned order came to the conclusion that the initial burden of proving that the goods in question were smuggled, lay on the Department which according to it, was not discharged by the Department. This conclusion of the High Court is obviously based on a misappreciation of the evidence that was already considered by the lower authorities. The High Court, in our opinion, not only erred in reappreciating the evidence already considered by the authorities below and in that process committed a further error of substituting its subjective opinion in the place of the findings of the authorities below. Therefore, we are of the opinion that the finding of the High Court that the concurrent conclusions of the statutory authorities were either not based on evidence or were perverse, is unsustainable. (Para 10)
       (ii) Customs Act, 1962—Section 123—Presumption in favour of Custom Department—Gold seized by Police and Custom Authorities—Whether custom authorities can take advantage of presumption under Section 123—Not factually correct, even without Section 123 confiscation and penalty was justified on material on record.
       Held : From the material available on record, we find that on finding the respondent carrying the gold in question, the Police as a matter of fact did not seize the gold but actually produced the respondent with the gold which was in his possession, before the Customs Authorities who in fact on such production, seized the gold. Be that as it may, we notice that the appellate authority itself did not choose to rely upon any presumption available under Section 123 of the Customs Act but proceeded to consider and rely upon the material that was available to establish that on the date of arrest the respondent was in possession of unmarked gold biscuits; in regard to origin of which or importation of which the respondent was either ignorant or was not willing to divulge and remained evasive. The authorities also have taken note of other materials on record to which we have already made reference and which, in our opinion, are sufficient in the circumstances of this case to come to the conclusion that the gold found in possession of the respondent is liable for confiscation and the respondent was liable for the penalty de hors the presumption contemplated under Section 123 of the Customs Act. (Para 11)
       Held finally : For the reasons stated above, this appeal succeeds, the impugned judgment is set aside and the order of confiscation and the penalty as imposed by the Commissioner and as modified by the tribunal shall be restored. (Para 12)

JUDGMENT

Santosh Hegde, J.—The respondent herein was intercepted in the early hours of 22nd October, 1994 by the Circle Inspector of Poiice, Chalakudy while he was travelling in a car. The Police recovered 30 gold biscuits of foreign markings irom 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 duly 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.

4. The respondent and said Balan both preferred an appeal before the Customs Excise & Gold (Control) Appellate Tribunal, South Zonal Bench at Madras (‘the tribunal’) wherein it was contended that since the gold biscuits were seized by the Police originally, the provisions of Section 123 of the Customs Act 1962 cannot be invoked. Therefore, in the absence of any presumption being available in favour of the Department the burden was on the Department to prove that the gold in question was smuggled. It was also contended that in view of the fact that the initial statement of the respondent was taken under duress and coercion, and also in view of the fact that the said statement was retracted, his original statement cannot be taken into account. It was also argued that the document produced by said Balan establi

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2001 Supreme(SC) 520

Important pointWhere customs authorities confiscation of smuggled gold was upheld by two statutory authorities, High Court should not interfere with their concurrent findings of fact supported by evidence in writ jurisdiction.

Important point
Where customs authorities confiscation of smuggled gold was upheld by two statutory authorities, High Court should not interfere with their concurrent findings of fact supported by evidence in writ jurisdiction.