Per Gowri Shankar:

These two appeals are against the order of the Commissioner of Customs (Preventive), Mumbai. In that order he has ordered confiscation under Section 121 of the Act of currency of Rs. 75 lakhs seized from the possession of Mohan Shet, the appellant in appeal 403; imposed penalty of Rs. 10 lakhs on Mohan Shet and of Rs. 2.5 lakhs on Sujatha Mohan Shet, his wife.

2. Mohan Shet and his wife run a shop in the name of Dhanalaxmi Jewellers at Matunga, Mumbai. The proprietor on record is Sujatha Mohan Shet, his wife. The customs officers searched her house and the shop on 30th May, 1997. They found Rs. 75 lakhs in the house which they seized on the belief that it was sale proceeds of smuggled gold. They also found some documents stated to be incriminating. In the course of their investigation they recorded statements of Mohan Shet, Uday Ravankar and Naresh Thakkar who worked for him in his flat; Sujatha Shet. Kamalesh Bakashi Sharma, an accountant who maintains the accounts of Dhanalaxmi Jewellers. The Commissioner has cited in his order in support of his finding seven statements of Mohan Shet, and the statements of Ravankar and Thakkar. In his first statement recorded on 31.5.1997 Mohan Shet said that this money of Rs. 75 lakhs was the sale proceeds of gold. The gold was supplied to him by Abdullah, whom he met at Kumta, his home town around three months earlier. Abdullah said that he could arrange supply of gold brought by 'NRI passengers', evidently a reference to passengers residing abroad who are permitted to import gold, if they satisfy the conditions specified in the Import Policy; Shet claimed that he told Abdullah that having suffered preventive detention earlier, he was only interested in buying gold that was legitimately imported. There being no objection from Abdullah he agreed to purchase 135 bars (of 10 tolas each) of the gold. He did this four days prior to the seizure. He made arrangements for delivery of the gold to be taken and also found buyers for it. The money was the sale proceeds of this gold. He gave names. addresses and telephone numbers of the buyers of the gold and said that no bill was issued to them. In his later statements on 1st and 2nd June, Shet made some minor corrections and additions to his earlier statement. He agreed that the total quantity of the gold sold by him, was 130 bars and speculated that the other 5 bars had been sold by Babu Mane, his employee. He gave details about Abdullah and agreed that no duty receipts were provided by Abdullah. He said that details of the transactions were not entered into his account books. He could not produce the account books of Dhanalaxmi Jewellers for 196-97 or later. He said that they could be with his accountant Sharma, whose address he did not know. In his statement on 4th and 5th June he confirmed what he said earlier and added that the accounts book could not be located nor KB. Sharma or Babu Mane. He also said that he did not know where his wife was; she was not living with him. He agreed that the gold sold to him by Abdullah might be smuggled. In his statement on 3.7.1997 he said that Sharma given him the accounts books on 27th June. He referred to an entry in his account book showing purchase of 123 bars of gold from Abdullah on 27.5.1997. Another entry of the same day purchased from Azhgar Khatri for 12 bars of gold. He now said that in his earlier statement of 31st May, he had mistakenly said that he got the 137 bars from Abdullah. He was asked whether the customs duty receipts which he produced for support of gold were genuine and did not reopened. He was asked how he would explain the difference in the Azghar Khatri's address stated by him and as appeared in the customs receipt. He said that the address in the account book was erroneous. Further statements were recorded on 16.10.1997 and 3.11.1997. In these statements he said that Abdullah's present address was not known to him and Babu Mane remained absconding from the date