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1999 Supreme(Ker) 8
Judges : A.R.LAKSHMANAN,K.NARAYANA KURUP
Rajendra Prabhu - Appellant
Versus
Union of India - Respondent
Case No : O.P.No. 21479 of 1997
Decided On : 01/05/1999
Advocates Appeared :
A.K. Madhavan Unni For Petitioners K. Ramakumar (S.C.G.S.C.)For Respondents
The findings of the statutory authorities can be set aside if they are based on no evidence or can be regarded as perverse.
Headnote:
Customs Act - Confiscation of Gold - S.110, S.108, S.111(d), S.112 - The court held that the orders impugned in this writ petition cannot be legally sustained as it is based on no evidence. The department failed to discharge its initial burden of proving that the goods in question are smuggled goods either by direct evidence or by circumstantial evidence. The court emphasized that suspicion, however strong, cannot take the place of proof. The findings recorded by the statutory authorities were based on no evidence and can be regarded as perverse. Therefore, the findings are liable to be interfered with notwithstanding the existence of alternate remedy by way of appeal. The court quashed the orders and directed the third respondent to return the 30 gold biscuits seized from the first petitioner forthwith.
Fact of the Case:
The second petitioner imported 42 gold biscuits and entrusted 30 gold biscuits to the first petitioner for finding intending purchasers. The first petitioner was apprehended by the police with the gold biscuits, which were later seized by the Customs authorities. The authorities issued a show cause notice for confiscation and imposed a penalty, which was confirmed by the Tribunal.
Finding of the Court:
The court held that the orders impugned in the writ petition cannot be legally sustained as they were based on no evidence. The department failed to discharge its initial burden of proving that the goods in question are smuggled goods. The findings recorded by the statutory authorities were based on no evidence and can be regarded as perverse. Therefore, the findings are liable to be interfered with notwithstanding the existence of alternate remedy by way of appeal.
Issues: The main issue was whether the confiscation of the gold and imposition of penalty by the authorities could be legally sustained based on the evidence presented.
Ratio Decidendi: The court emphasized that the department has the initial burden of proving that the goods in question are smuggled goods, which can be discharged by circumstantial evidence. However, suspicion, however strong, cannot take the place of proof. The findings of the statutory authorities can be set aside if they are based on no evidence or can be regarded as perverse.
Final Decision: The court quashed the show cause notice, order of adjudication, and the judgment of the Tribunal, and directed the third respondent to return the 30 gold biscuits seized from the first petitioner forthwith.
K. Narayana Kurup, J.
The second petitioner as an eligible passenger imported 42 gold biscuits weighing 4897.2 grms. and paid customs duty of Rs. 1,07,738/- as borne out by Ext. P1 baggage receipt dt. 19.10.1994. Out of the aforesaid 42 gold biscuits, the second petitioner on 22.10.1994 entrusted the first petitioner (a goldsmith by profession) 30 gold biscuits for finding out intending purchasers. While the first petitioner was going to Coimbatore in a taxi car with the 30 gold biscuits, the Circle Inspector of Police, Chalakudy apprehended the first petitioner at Potta junction, Chalakudy at about 3 a.m. on 22.10.1994 during the course of a routine search of vehicles and took into custody an airbag containing the aforesaid gold biscuits under a mahazar. Thereafter the police handed over the first petitioner and the gold to the Superintendent of Customs, Special Unit, Kodungallur on the evening of 22.10.1994. The Customs author it is prepared Ext. P2 mahazar and seized the gold under S.110 of the Customs Act. On 23.10.1994 Ext. P3 statement of the first petitioner was recorded under S.108 of the Customs Act. The first petitioner was produced before the Addl. Chief Judicial Magistrate, Economic Offences, Ernakulam at 6.30 on 24.10.1994 with a remand report. Ext. P4 is the bail application preferred by the first petitioner stating that the gold in question belongs to the second petitioner supported by Ext. P1 copy of the duty paid baggage receipt. However, the first petitioner was remanded to judicial custody till 31.10.1994. In the meantime the second petitioner importer vide Ext. P5 letter to the Customs Superintendent, claimed ownership of the gold in question. On 29.10.1994 the first petitioner vide Ext. P6 retracted from Ext. P3 statement. In Ext. P6 it is stated that the gold in question belonged to the second petitioner and duty in respect of the same was paid vide Ext. P1 baggage receipt. On 31.10.1994 the first petitioner was released on bail. Again on 14.11.1994 the first petitioner gave a retracted statement with correct details regarding the ownership and the fact that the gold in question is part of legally imported gold covered by Ext. P1. On the same day the second petitioner gave Ext. P7 statement under S.108 of the Customs Act before the Superintendent, Special Customs Preventive Unit, Kodungalloor reiterating what has been stated by him in Ext. P5 letter and requesting to drop further proceedings and return of the gold. Thereafter, Ext. P8 notice was issued to the petitioners by the Deputy Collector (Customs) to show cause as to why the gold in question shall not be confiscated under S.111(d) of the Customs Act, 1962 and why a penalty shall not be imposed under S.112 of the Act. Ext. P8 show cause notice was followed by Ext. P11 order of adjudication passed by the third respondent Commissioner of Central Excise and Customs, Kochi absolutely confiscating the entire gold and imposing penalty of Rs. 5 lakhs. Exts. P12 and P13 are appeals preferred by the petitioners against Ext. P11. The second respondent Tribunal (CEGAT) passed Ext. P14 common judgment confirming the order of confiscation and reducing penalty to Rs. 4 lakhs from Rs. 5 lakhs. On being found that Ext. P14 contain factual mistakes and omissions going to the root of the matter, the first petitioner filed an application for rectification of mistake which was dismissed as per Ext. P15 order. The challenge in this Original Petition is directed against Ext. P8 show cause notice, Ext. P11 order of adjudication confiscating the gold and imposing penalty and Ext. P14 judgment of CEGAT confirming Ext. P11 and for a consequential direction to return the 30 gold biscuits seized from the first petitioner.
2. We heard learned counsel on both sides.
3. The question to be considered is whether the order of confiscation as confirmed by the Appellate Tribunal can be legally sustained or not. While dealing with this petition, we are conscious of the settled
