K. P. Abdul Majeed v. Commissioner of Customs, Cochin

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **THURSDAY, THE 3RD DAY OF JULY 2014/12TH ASHADHA, 1936** **RC.No. 1 of 2010** **-----------------------[REFERENCE ARISING OUT OF HON'BLE HIGH COURT'S ORDER IN C.P.NO.5778/98-K. REFERENCE APPLICATION NO.C/REF/206/97. ARISING OUT OF TRIBUNAL FINAL ORDER NO.2140/97 DATED 04/08/97 IN APPEAL NO.C.461/91 PASSED BY THE C.E.S.T.A.T BANGALORE]** **PETITIONER:** **-------------------** **MR.K.P.ABDUL MAJEED, S/O. HUSSANKOYA HAJI, MELAYIPARAMBIL HOUSE, PANNIYANKARA, VIA. KALLAI, CALICUT DISTRICT.** **BY SRI.K.RAMAKUMAR, SENIOR ADVOCATE, ADVS. SRI. RAMPRASAD UNNI, PREM NAVAZ.J.R,** **RESPONDENT:** **----------------------** **COMMISSIONER OF CUSTOMS, COCHIN, C.R. BUILDING, I.S. PRESS ROAD, COCHIN - 682 018.** ## **BY ADVS.SRI.C.S. GOPALAKRISHNAN NAIR** **SRI.THOMAS MATHEW NELLIMOOTTIL, SRI.TOJAN J.VATHIKULAM,S.C, SRI.JOHN VARGHESE,S.C,** **THIS REFERRED CASE HAVING BEEN FINALLY HEARD ON 11-04-2014, THE COURT ON 03-07-2014 PASSED THE FOLLOWING:** **Prv.** **R.C.1/2010:** ## **APPENDIX** ## **PETITIONER'S ANNEXURES:** **ANNEXURE - A: FORWARDING LETTER/INDEX. ANNEXURE -B: SHOW CAUSE NOTICE. ANNEXURE -C: ORDER IN ORIGINAL. ANNEXURE -D: FINAL ORDER COPY. ANNEXURE -E: REFERENCE. ANNEXURE -F: STATEMENT OF FACTS. ANNEXURE -G: QUESTION OF LAW. ANNEXURE -H: PETITION/STAY/COD. ANNEXURE -I: H.C. ORDER/REFERENCE APPLICATION.** ## **RESPONDENT'S ANNEXURES: NIL.** **//TRUE COPY//** **P.A. TO JUDGE.** **Prv.** Manjula Chellur, C.J. & A.M. Shaffique, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= R.C.No. 1 of 2010 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 3[rd] day of July, 2014. ## J U D G M E N T ## Shaffique, J. Following questions of law have been referred to this Court by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench of Bangalore: - **“1. Whether the Customs, Excise & Gold (Control) Appellate Tribunal (Appellate Tribunal for short), under the facts and circumstances of this case, is legally justified in finding the appellant guilty and imposing penalty of Rs. 15 lakhs under the Provisions of the Customs Act 1962 only on the basis of the retracted confessional statements of the co-accused?** **2. Whether 'the Appellate Tribunal under the facts and circumstances of this case, is correct in finding the appellant guilty under the provisions of the Customs Act when the retracted confessional statements of the co-accused were not corroborated by any substantial and independent evidence either generally or in material particulars?** **3. Whether the Appellate Tribunal under the facts and circumstances of this case, is justified in giving a finding that the coaccused have retracted their statements only after two months in spite of the bail** R.C.No. 1 of 2010 -: 2 :- **applications of the co-accused containing retractions and the order of the learned Chief Judicial Magistrate (Economic Offences), Ernakulam directing the jail authorities to provide medical treatment to those coaccused?** **4. Whether the Appellate Tribunal under the facts and circumstances of this case, is correct in holding that statements of the co-accused are voluntary and true of the prolonged illegal custody of the co-accused from 24.02.89 to 27-02-89 during which period statements obtained from the co-accused?** **5. The Appellate Tribunal under the facts and circumstances of this case, is legally correct in relying on the Judgement of two judges bench of the Supreme Court in the case of Naresh J Sukhwani vs.Union of India, reported in 1996 (83) Excise Law Times 258 (SC) in preference to the judgment of the Constitutional Bench of the Supreme court reported in A.I.R.1964, Supreme Court 1184?** **6. The Appellate Tribunal under the facts and circumstances of this case, is correct in following the judgement of the Supreme court in the case of Naresh J.Sukhwani Vs. Union of India, reported in 1996 (83) Excise Law Times 258 which is distinguishable on facts and which deals with confessions of the co-accused but not retracted** R.C.No. 1 of 2010 ## -: 3 :- ## **confessions of co-accused?** **7. Whether the Appellate Tribunal under the facts and circumstances of this case, has mis-read and mis-understood the judgement of the Supreme Court, K.I.Pavunni Vs. Asstt, Collector of Customs, Cochin reported in 1997 (69) Excise and Customs Reported 209(SC) for coming to the conclusion that the retracted statement can form the sole basis for conviction?** **8. Whether the Appellate Tribunal, under the facts and circumstances of this case, is legally correct in relying on the confessional statements of coaccused who were not produced for cross-examination at the time of personal hearing in spite of the applicants' request for crossexamination for finding the appellant guilty?** **9. Whether the Appellate tribunal, under the facts and circumstances of this case, is legally Justified in imposing huge penalty of Rs 15 lakhs on the applicant when penalty of Rs 50,000/was imposed on the co-accused Kadavathu Abdullah@Atha who is alleged to have played similar role in this case?** **10. Whether the perusal penalty of Rs 15 lakhs impose don't the appellant is reasonable or warranted under the facts and circumstances of this case?** R.C.No. 1 of 2010 -: 4 :- 2. The facts involved in this case would disclose that the Circle Inspector of Police, Nadakavu and party searched the residential premises of one N.K. Abdul Rahiman. 900 gold biscuits of foreign origin weighing 104 kgs. and 891 grams with 9 empty cotton jackets were seized and handed over to the Assistant Collector of Customs in terms of Mahazar dated 24.2.1989. The officers of Directorate of Revenue Intelligence seized gold biscuits of foreign origin from a Contessa Car on 25.2.1989, which was parked in the residential premises of K.V. Moosan Haji. On 26.2.1989, the Superintendent of Special Customs Preventive Unit, Calicut, seized currency of Rs.4,37,550/- and one semi-automatic rifle from the house of one E.K. Sivanandan at Calicut. Several vehicles and articles were also seized during the aforesaid operations. Though the residential premises of the appellant was searched by the officers on 3.3.1989, no incriminating materials were recovered. Several other business premises were also searched and statements were recorded under Section 108 of the Customs Act. When statements were taken, 17 of them had spoken about the role of the appellant in smuggling contraband gold biscuits to India. All the persons were arrested under Section 104 of the Customs Act and remanded to judicial R.C.No. 1 of 2010 -: 5 :- custody by Additional Chief Judicial Magistrate (Economic Offences), Ernakulam. The persons, who had given statement under Section 108, had filed statements, retracting their statements as well. 3. The appellant appeared before the Assistant Collector of Customs, Calicut on 6.5.1989. He did not give any confessional statement admitting commission of offence under the Customs Act. Show cause notice dated 8.8.1989 was issued to the appellant and others on the allegation of smuggling 3300 gold biscuits into India. The appellant denied the allegations. The adjudicating authority, after considering the replies filed by the persons involved in the matter, held that the appellant is liable for imposition of penalty. Hence, penalty was imposed for an amount of Rs.20 lakhs under Section 112A of the Customs Act, 1962. 4. The appellant preferred an appeal before the appellate authority against the order of the original authority. As per final order dated 4.8.1997, the penalty imposed on the appellant was reduced to Rs. 5 lakhs. It is aggrieved by the said order that the reference application was filed before the Tribunal. 5. When reference application was filed belatedly with an application to condone delay, the same was dismissed. Consequently, reference application was also dismissed. Against the said order, R.C.No. 1 of 2010 -: 6 :- the appellant filed revision before this Court and the matter was directed to be heard on merits. 6. It is after considering the submissions made by either parties that the Tribunal had formulated the above questions to be decided by this Court. 7. The main argument raised by the learned senior counsel appearing for the petitioner is that there is no material to penalise the petitioner. The petitioner had not given any statement under Section 108 of the Customs Act. No material was seized at the time of search conducted at the premises of the petitioner. The witnesses who had spoken against the petitioner in the statement under Section 108 had retracted from their statements. Therefore, those statements cannot be taken as the basis for imposing a liability on the petitioner. 8. On the other hand, the learned standing counsel for the Department would submit that none of these questions of law arise for consideration in this reference case. All the factual circumstances involved in the matter had been clearly considered by the original authority and such factual issues cannot be gone into in a reference case. 9. On a perusal of the original order, it is clear that the basis of imposing penalty on the petitioner is found on the statement given by the co-accused in the R.C.No. 1 of 2010 -: 7 :- case. The first question to be considered is whether the retracted confessional statements of the co-accused can be the basis of the penalty. It is settled position of law that if the statements of a co-accused was corroborated with other materials, such statements can be the basis for imposing penalty on others. This is not a case in which there is lack of evidence. Several persons had spoken about the involvement of the petitioner in the aforesaid smuggling activity. Such statements, though retracted, cannot lead to a conclusion that the statements are baseless. Even if an accused retracted from the earlier statement under Section 108, unless sufficient materials are available to take on record that such statements have been forcibly taken from the accused, it is not possible for the courts or quasi judicial authorities to ignore the statement given under Section 108. The retraction might be an after thought as well. 10. Apparently, in this case, retracted statements were filed after two months from the date on which the accused were apprehended. The learned senior counsel further made specific reference to the fact that all the accused were made to give such statements by force and by inflicting them with severe injuries and using third degree methods. This fact was mentioned by the accused, when he was produced before the R.C.No. 1 of 2010 -: 8 :- Magistrate. The accused had stated that they were subjected to severe manhandling and the matter was recorded by the Magistrate. We therefore called for the entire files from the Additional CJM's Court (Economic Offence), Ernakulam and on a reference of the files, we do not find any such statement being made by the accused nor any record is available to indicate that the accused who had given such statements under Section 108 had mentioned to the Magistrate at the time they were brought before the Magistrate indicating that they were subjected to any such manhandling, force or coercion as such. Therefore, it will not be possible for this Court at this stage to conclude that the statements were given by the coaccused by use of force. Hence, we are unable to agree with the contention that retracted statements cannot be the basis for imposing penalty on the petitioner. 11. Further, it was found on the basis of the judgment of the Supreme Court in **Naresh J. Sukhawani v. Union of India** , 1996(83) ELT 258 (SC) that the statement made before the customs officials is not a statement recorded under Section 161 of the Crl. P.C. Therefore, such statement is a material piece of evidence collected by customs officers under Section 108 of the Customs Act. The material incriminates the petitioner in the contravention of the R.C.No. 1 of 2010 -: 9 :- provisions of the Customs Act. Such material can certainly be used to connect the petitioner also to the contravention as the statement of co-accused clearly inculpates not only himself but also the petitioner which can be used as a substantive piece of evidence connecting the petitioner. In the light of the aforesaid judgment, there is nothing wrong in placing reliance upon the statement of the co-accused, and such questions doe not arise for consideration. 12. It is contended by the learned senior counsel that the judgment in **Naresh's case** (supra) is distinguishable on facts and especially in the light of the judgment of the Constitution Bench of the Supreme Court in **Haricharan Kurmi v. State of Bihar** , AIR 1964 SC 1184. 13. This aspect of the matter had already been considered by the Tribunal. In the Constitution Bench judgment, their Lordships held that evidence of coaccused is a confessional evidence and the same can be used in order to corroborate the evidence which is already on record. In fact, the law on the point is very clear. It is settled position that retracted confession must be looked into with a greater concern unless the reasons given for having made it in the first instance or on the face of them falls. Once confession is proved to be satisfactorily obtained, any admission therein R.C.No. 1 of 2010 -: 10 :- must be satisfactorily withdrawn or making of it explained as having proceeded from fear, duress, promise etc. 14. Having regard to the legal implications evolved from the aforesaid factual situation, it is clear that confession statement of co-accused can be treated as evidence, provided sufficient materials are available to corroborate such evidence. As far as retraction statement is concerned, it is for the person who claims that retraction has been made genuinely to prove that the statements were obtained under force, duress, coercion etc. Otherwise, the materials indicate that statements were given voluntarily. When the statute permits such statements to be the basis of finding of guilt even as far as co-accused is concerned, there is no reason to depart from the said view. It is a question of appreciation of evidence. The original authority has considered the contentions of the petitioner in the following manner: “35. In this case all persons from whom statements were recorded had given a wealth of details as to how the entire smuggling operation was carried out resulting in the seizure of the gold and these details could have been only in the personal knowledge of the persons who made those statements. The intricate details of movements from one place to another, the type and number of vehicles used, the time when they moved from one place to another are details which cannot be invented by the Custom Officers. By merely retracting from the statements, -: 11 :- R.C.No. 1 of 2010 the persons have only tried their best to avoid the consequence of penal action and in the light of concrete corroborative evidence in the form of seizure of gold biscuits both from the house of Abdul Rehiman and from the Contessa car, the lorry with a secret cavity, the walkie talkie which was used for communication and the canoe with an outboard motor which was used for bringing the gold from the main vessel to the shore, and the number of cars and motor bikes, it would be futile to expect the adjudicating authority to accept the claim that statements have been recorded under force and they are not voluntary. 36. However, while arriving a the gravity of offence committed by each person who is a party to these proceedings, I have taken into account not the entire portion of the statement given by them but only such of those details which can be confirmed by some form of corroborative evidence. I have also gone by the preponderance of probabilities and accepted circumstantial evidence since in these types of activities of smuggling it is not always possible to catch the culprits red-handed in the actual act of smugging. 1. Accordingly, I find that K.P. Abdul Majeed is the kingpin of the entire operation assisted by various persons in some capacity or the other. No statement could be recorded from Abdul Majeed and even when he appeared once before the Assistant Collector of Customs, S.C.P. Division, Calicut, he neve choose to give any statement or volunteered any information. But all the others in these proceedings have implicated his involvements and I have no hesitation to hold that he is the person directly connected with the smuggling of 25 jackets of gold biscuits which were actually seized. He was behind arranging the team for transporting the gold from the main vessel to the sea shore, transferring part of it from the sea shore to the house of Abdul Rahiman and also transporting another portion in the Contessa car parked in the compound wall of the house of K.V. Moosan Haji. I also hold him responsible for the illicit import of the Walkie Talkie found in the lorry and also the fire arm with R.C.No. 1 of 2010 -: 12 :- ## ammunition found in the house of E.K. Sivanandan.” When such facts are also appreciated and considered by two authorities, we do not think that the questions now raised has any legs to stand. 15. A contention was raised that the accused were arrested on 24.2.1989, but they were produced before the Magistrate only on 27.2.1989 and in the process, they were ill-treated and manhandled for obtaining statement under Section 108. The Tribunal found that four co-accused were arrested on 26.2.1989. The officers have also indicated during cross examination that though co-accused were with them, their movements were not restricted. Hence, the Tribunal came to an opinion that if the appellant has a case that the accused were under restraint by the officers, it is for the accused to prove the same and in the absence of any such material, the said contention cannot be considered. In the result, the questions of law now raised by the petitioner does not arise for consideration and R.C.No. 1 of 2010 -: 13 :- accordingly the reference case is answered in favour of the Department. Sd/- Manjula Chellur, Chief Justice Sd/- A.M. Shaffique, Judge. Tds/ [True copy] P.S. to Judge.