(1.) BEING aggrieved by the decision of the Additional Collector of Customs (Preventive), West Bengal, Calcutta in Order No. 9/90 dated 28th September, 1989, the appellant has preferred this appeal. In terms of the above order, the learned Additional Collector has confiscated the goods under Item Nos. 1 and 2 of the Search List dated 14-12-1988 under Section 111(d) and 111(p) of the Customs Act, 1962. He also confiscated the goods under Item No. 3 of the search list. Indian currencies seized from the residence of the appellant was also confiscated under Section 121 of the Customs Act. A penalty of Rs. 2,500/- was imposed on the appellant under Section 112(a) and (b) of the Customs Act.
(2.) Briefly stated the case of the department is that on information received by the Officers on 14-12-1988, they searched the residential premises of the appellant and as a result they recovered 45 pieces of wrist watch movements-ST-69N (Swiss made), and 47 pcs. of wrist watch movements-ST-69N (Swiss made), and 4 pcs. of wrist watches - Anglo Swiss cavalry fitted with ST-96-N (Swiss made movements). Further, Indian currency of Rs. 10,000/- was recovered from underneath the bed in the cot placed in the bedroom of the said premises. The appellant could not produce any document in support of the legal possession of the goods recovered and, therefore, on a reasonable belief that the said goods were smuggled into India and the Indian currency recovered was the sale proceeds of smuggled goods, the same were seized under a search list. Thereafter, the shop premises of the appellant named and styled as M/s. Das Nagar Watch Co. was also searched by the Officers on the same day, i.e. 14-12-1988 in the presence of independent witnesses. The search resulted in the seizure of 8 pcs. of Wrist Watch, Anglo Swiss Tiny fitted with movements S-69-N & ST-96N (Swiss made), 7 pcs. of wrist watches, Anglo Swiss Cavalry fitted with movements. Indian currency amounting to Rs. 15,000/- was also recovered from the top of the iron case placed in the ante-room of the said shop. As the appellant could not produce any document in support of the legal possession of the goods in question, the departmental officers seized them on reasonable belief. Further, the amount of Rs. 15,000/- of Indian currency was also seized. Accordingly a show cause notice was issued to the appellant. A statement of the appellant was recorded by the officers on 14-12-1988 under Section 108 of the Customs Act, 1962. In reply to the show cause notice, the appellant furnished a reply. He denied having made such a statement. He also stated that he had purchased these watch movements from the brokers and produced certain documents. A personal hearing was granted to the appellant and after adjudication the impugned order was passed.
Shri K.P. Dey, learned Consultant, appearing along with Shri S.K. Poddar, contended before me that the watches were assembled in India and they were only fitted with foreign movements and, therefore, it was contended that these were Indian watches and not foreign watches. In such circumstances, Shri Dey strenuously contended before me that Section 123 does not apply to the facts of this case and the burden was not shifted to the appellant to prove that the goods in question were not smuggled goods. It was contended by him that there is nothing to show that these watches are foreign made watches and, therefore, the departmental officers could not have any reasonable belief for seizing the same. He, therefore, contended that Section 123 of the Customs Act does not come into play in this case and the burden is still on the department to prove that the impugned goods were smuggled by the appellant. As far as Indian currency is concerned, it was urged by the learned Consultant that the same is not notified item and, therefore, the burden is on the department to prove that the amounts seized were sale proceeds of smuggled goods. In this connection, he relied on the decision of the Tribunal in the case of Jumma Abdul Gani v. Collector of Customs, Bombay, reported in 1983 (12) E.L.T. 401 to contend that merely on the presumption that the seized currency was the sale proceeds of the smuggled watches, the same could not have been confiscated. He also relied on an unreported decision of the Tribunal vide Order No. 651 of 1990 dated 31st December, 1990 [Appeal No. C-366/89 & C-367/89 Shri Srikanta Haldar and Shri Sushanta Haldar v. Collector of Customs (Preventive), West Bengal, Calcutta - 1991 (53) E.L.T. 425 (Tri.)] and contended that it was not proved by the department that the amounts seized were the sale proceed of the smuggled goods. Another unreported decision of the Tribunal in the case of Collector of Customs (Prev.), West Bengal v. Sri Tulsi Sarkar, vide Order No. 69/Cal/89 dated 3rd February, 1989 [Appeal No. C-363/88] was relied on by the learned Consultant, to contend that there is no proof to show that Indian currency is the sale proceeds of the smuggled goods. Relying on the abovesaid judgment, he contended that the confiscation of the Indian currency is not in accordance with law. He further relied on the decision of the Tribunal reported in 1984 (18) E.L.T. 274 to contend that when there is no record to show that the applicant had imported any goods and the seized currency represents the sale proceeds of such goods, the same could not have been confiscated. In this connection, he drew my attention of the confessional statement of the appellant. In the first instance, he contended that this is not a voluntary statement. In the second instance, he contended that even if the statement is taken into consideration, there is nothing to establish that the seized currency represented the sale proceeds, of the smuggled watches. The learned Counsel referred to the relevant portion of the statement to show that the sale proceeds are the proceeds of wrist watches fitted with Swiss movements. Therefore, he contended that even if the statement is taken to be true, it can only be said that these watches are assembled in India and, therefore, even if the amount represents the sale proceeds of such watches, it cannot be said that they are smuggled goods. In this connection, he relied on the decision of the Orissa High Court in the case of State (Collector of Central Excise) v. Tapan Kumar Shome, reported in 1984 (18) E.L.T. 278 (Orissa), wherein His Lordship relied on a judgment of the Privy Council 1939 AIR PC 47. In that decision, their Lordships of the Allahabad High Court stated that the statement could amount to a confession only if it admits the offence or substantially of the facts which constitute the offence and an admission of gravely incriminating character would not, by itself, amount to a confession. He, therefore, contended that the above confession does not show that the seized amount represents the sale proceeds of the smuggled watches. He relied on the decision of the Tribunal in the case of Hasmukh Dalpatrai Ganatra and Anr. v. Collector of Customs, Bombay, reported in 1987 (30) E.L.T. 782 (Tribunal) and contended that sole proprietor and proprietary firm are not different entities and that imposition of separate penalties on the proprietor and the proprietary firm is not in accordance with the law. On all these counts, he prayed that the appeal may be allowed.
(3.) REPLYING to the abovesaid decision, the learned JDR Shri Sarkar contended that under Section 123 of the Customs Act, watches and watch movements are all notified items and the departmental officers on a reasonable belief have seized the same. Shri Sarkar also contended that the appellants could not produce any legal documents in support of these watches and watch movements and, therefore, there was reasonable belief in the mind of the Officers that these watches and watch movements were imported into the country clandestinely and, therefore, Section 123 of the Act is attracted to the facts of this particular case. Shri Sarkar, therefore, contended that the burden is on the appellant to prove that these are not smuggled goods. Shri Sarkar also contended that the appellant had given a statement on the very same day of seizure on 14-12-1988 and in that statement, he had clearly stated that this amount of Rs. 10,000/- seized from his residence and the amount of Rs. 15.000/- seized from his shop represents the sale proceeds of the wrist watches fitted with Swiss movements, which he had bought from some brokers. Therefore, he contended that the statement of the appellant clearly goes to show that these amount represents sale proceeds of the smuggled goods. In this connection, Shri Sarkar contended that even though the statement was recorded on 14-12-1988 the appellant chose to deny the statement only on 11-9-1989 when he filed the reply to the show cause notice. Therefore, he contended that this belated retraction is only an afterthought and the original statement is to be taken into account. In this connection, he drew my attention to the following decisions to contend that a belated retraction cannot be considered as a true one and the original statement given by the authority under Section 108 is to be relied :-
1985 (21) E.L.T. 525
1987 (27) E.L.T. 679
1988 (35) E.L.T. 122
Shri Sarkar also contended that the appellant has not produced any evidence to show that the wrist watches and the watch movement had been legally acquired by him. He also contended that the statement of the appellant can be admitted against him and the same does not come within the mischief of Section 25 of the Evidence Act, as a statement given by the accused under Section 108 of the Customs Act does not come within the mischief of Section 25 of the Evidence Act. Therefore, this statement of the accused (appellant) can be relied on to find him guilty. He also contended that the statement of the appellant clearly reveals that this amount seized from the residence as well as shop represents the sale proceeds of the smuggled watches. Confiscation of the watches as well as the Indian currencies are in accordance with law. For the same reasons, he contended that the imposition of penalty on the appellant under Section 112(a) and (b) of the Customs Act are also justified. With respect to the imposition of the penalty on the firm, he left the matter at the discretion of the Bench.;