The Hindu Business Line : Gold bars in a grocery bag

ONE has heard a lot about harassment during the erstwhile FERA regime. FEMA was enacted with the idea of making the Act user-friendly. The Customs Act also gives opportunities for officers to play truant with assessees.

One such instance that had a cinematic touch to it came up before the Central Excise and Service Tax Appellate Tribunal (CESTAT) in Ashok Kumar vs Commissioner of Customs, Delhi 2003 (158 ELT 441(Tri.-Del).

High drama

On November 27, 1998, Ashok Kumar (AK) arrived at the premises of the Embassy of Korea in Delhi. He came out of the Embassy holding a packet wrapped in newspaper. DRI officials who had some information about him, stopped him and took him to the DRI Office.

There, a search was conducted of his car and the controversial packet was seized and opened and in which was found 40 gold bars of 10 tolas each. AK was then taken to the 7th floor and a Panchnama was prepared in the presence of two independent witnesses, Shishu Pal Singh and Manwar Singh Rawat. To add to his misery, AK also had some French francs and US dollars with him. He was coerced into making a confessional statement. With an intent to make the whole affair official, he was produced before another officer, Mr Bakshi.

A show-cause notice was issued to AK and, in reply, he denied the recovery. An order was slapped on him, confiscating all the incriminating materials, including the car, and he was given an option to get the same redeemed on payment of a redemption fine of Rs 30,000 and personal penalty of Rs 5 lakh. In protest, AK filed an appeal before the CESTAT.

The arguments

Before the Tribunal, AK argued that there is no reliable evidence on the record to prove the very recovery of the gold bars and foreign currency from the possession of the appellant, and the order was passed only on inadmissible, inadequate and inconclusive evidence.

The confessional statement was said to have been obtained by coercion and by beating AK. After his period of remand was over, he withdrew the confessional statement the next day.

The decision

The Tribunal noted that no personal search of AK was made at the time he was stopped opposite the Embassy. The witnesses were with the officer who stopped AK. Even the car was not searched there but at the office of the DRI. When asked why they did not search AK then and there, it was stated that the place was not suitable for conducting personal search.

The Tribunal could not digest this reply and noted that even when the car was searched at the DRI office, the panchnama was not prepared and the event occurred at the 7th floor of the building. Even to this poser, DRI maintained a stoic silence. On further investigation, the CESTAT found that one of the witnesses was a worker at the tea stall located opposite the DRI office and supplied tea to the DRI staff. He denied going out with the DRI officials that day and said that the gold bars and currency were not confiscated at all. The other witness never ever turned up for the show.

The CESTAT decided to cross-examine the other officer, Mr Bakshi. He submitted that a sealed packet was shown to him but the contents not disclosed. It also came to light that AK was running a kirana shop and was supplying kirana items to the Embassy's employees.

On a review of all the developments in the case, the CESTAT ruled that the retraced confessional statement of AK could not be taken as substantial piece of evidence without seeking corroboration from other reliable evidence before holding him guilty personally under Section 112(b) of the Act and confiscating his car under Section 115(2) of the Act.

The order of the Commissioner of Customs was set aside and the penalty revoked.

This case shows how a few high-handed officials of the Customs department can harass assessees and extract their pound of flesh turning a blind eye to the provisions of law.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Making safe whistle blowing

Democracy and development: Contradiction in terms?

Preparing for the polls

All interests are not equal

A ruling to warm cold storages

Why make routine of a `last resort'

Gold bars in a grocery bag

The muddle over TDS interest

Kim Jong-il is the one fat man in the whole country