IMPORTANT POINT
In appeal under Section 130E of the Customs Act, 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 prepondering 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.

Headnote:Customs Act, 1962 — Sections 108, 123, 130 & 130E — Seizure of 551 gold biscuits foreign origin — Imposition of penalty — Eight persons including respondents were detained for carrying 551 gold biscuits of foreign origin — In their statements made u/s 108 of the Act, respondent disclosed that he had purchased the said 200 gold biscuits from one ‘R’ who had produced a delivery challan — Proceedees retracted from their statements alleging that he had the requisite documents to support their contentions that gold seized were not smuggled ones — Commissioner held that substantial number of foreign marked gold bars were found to have been concealed and that in their initial statements recorded before the Customs Officers respondents admitted that they had no documents for legal importation — According to the Commissioner of Customs, respondents had not discharged their burden of proof in terms of Section 123 of the Act — Applications for rectification of mistakes filed by respondents alleging that various aspects had not been considered in the original order — Tribunal allowed applications for rectification of mistakes — Tribunal held that Revenue were fully satisfied that the gold was legally acquired by them and supplied to respondents — Appeal filed by Revenue — High Court refused to interfere holding that no substantial question of law arose for its consideration — Whether judgment of the High Court is sustainable — (No) — Matters remitted to the Tribunal for considering them afresh.
       Held : 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. (Para 20)
       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. (Para 22)
       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. (Para 23)
       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. (Para 24)
       Even in a case where evidence is misread, the High Court would have power to interfere. (Para 25)
       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. (Para 27)
       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. (Para 29)
       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. (Para 30)
       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. (Para 38)
       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. (Para 39)

JUDGMENT

S.B. Sinha, J. — Leave granted in S.L.Ps.

2. 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 Quantity Nature of of gold possession of gold bars

1. Sh. Shailesh Ratilal Patel, ARGOR 100 Kept in 4 plastic Proprietor of M/s. S.K. Jewellers SUISSE packets each of 25 bars

2. Sh. Vijaybhai Dashrathlal Patel, CREDIT 90 A small green bag Proprietor of M/s. Paras Bullion HERAEUS carried by him (Respondent herein)

3. Smt. Rasilaben Rathod ARGOR 95 Under her attire HERAEUS tied with a waist belt

4. Shri Jaswantbhai K. Patel ARGOR 95 Hidden in sole HERAEUS of the shoes PAMP SUISSE 09 JOHNSON MATHEY 09

5. Bhikhabhai T.K. Patel CREDIT 55 Hidden in sole of SUISSE the shoes

6. Arvindbhai K.K. Patel ARGOR 55 Hidden in sole of HERAEUS the shoes

7. Shri Nandubhai Brijlal Soni UBS 51 Hidden in sole of the shoes

8. Nathubhai @ Nitinbhai B. Patel CREDIT 55 Hidden in sole of SUISSE the shoes

3. 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.”

4. 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

Click Here to Read the rest of this document

2007 Supreme(SC) 312

Cases Referred (7)