http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12  

CASE NO.: Appeal (civil)  1204 of 2007

PETITIONER: Commissioner of Customs (Preventive)

RESPONDENT: Vijay Dasharath Patel

DATE OF JUDGMENT: 08/03/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T (Arising out of S.L.P. (C) No. 7947 of 2006)  With CIVIL APPEAL NO. 1206/2007 @ S.L.P.(C)No.10603 of 2006 CIVIL APPEAL NO. 1207/2007 @ S.L.P.(C)No.11522 of 2006 CIVIL APPEAL NO. 1208/2007 @ S.L.P.(C)No.13000 of 2006 CIVIL APPEAL NO. 1209/2007 @ S.L.P.(C)No.14311 of 2006 CIVIL APPEAL NO. 1205/2007 @ S.L.P.(C)No.14312 of 2006

S.B. Sinha, J.

       Leave granted in S.L.Ps.

       These appeals are directed against a judgment and order dated 30th  January, 2006 passed by the High Court of Gujarat at Ahmedabad in Tax  Appeal Nos. 1923, 1924, 1925, 1930, 1928 and 1929 of 2005 respectively,  whereby and whereunder the appeal preferred by the appellant herein was  dismissed holding that no substantial question of law for its consideration  had arisen therein.  The factual matrix obtaining herein is not in dispute.   Eight persons including the respondents herein were detained for carrying  551 gold biscuits of foreign origin, the details whereof are as under :

Sr.No. Name Foreign  Mark of  gold Quan- tity Nature of  possession  of gold  bars 1. Sh. Shailesh Ratilal  Patel, Proprietor of  M/s. S.K. Jewellers ARGOR  SUISSE 100 Kept in     4 plastic  packets  each of   25 bars 2. Sh. Vijaybhai  Dashrathlal Patel,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12  

Proprietor of M/s.  Paras Bullion  (Respondent herein) CREDIT  HERAEUS 90 A small  green bag  carried by  him 3. Smt. Rasilaben Rathod ARGOR  HERAEUS 95 Under her  attire tied  with a  waist belt 4. Shri Jaswantbhai K.  Patel ARGOR  HERAEUS  PAMP  SUISSE  JOHNSON  MATHEY 95

            09                                               09 Hidden in  sole of the  shoes 5. Bhikhabhai T.K. Patel CREDIT  SUISSE 55 Hidden in  sole of the  shoes 6. Arvindbhai K.K. Patel ARGOR  HERAEUS 55 Hidden in  sole of the  shoes 7. Shri Nandubhai Brijlal  Soni UBS 51 Hidden in  sole of the  shoes 8. Nathubhai @ Nitinbhai  B. Patel CREDIT

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12  

SUISSE 55 Hidden in  sole of the  shoes

       Out of the said 551 of gold biscuits, 200 belonged to Shri Vijaybhai  Dashrathlal Patel, Proprietor of M/s. Paras Bullion, whereas 351 belonged to  Shri Shailesh Ratilal Patel, Proprietor of M/s. S.K. Jewellers.  Both of them  were arrested.  They made their statements under Section 108 of the  Customs Act, 1962 (’the Act’, for short).  Shri Vijaybhai Dashrathlal Patel,  respondent herein, allegedly, in his statement disclosed that he had  purchased the said 200 gold biscuits from one Ridhi Siddhi Bullion Ltd. who  had produced a delivery challan of ABN AMRO Bank issued in its favour.   Other than the said delivery challan, allegedly, he could not produce any  other document.  The purported letter of ABN AMRO Bank dated  12.11.1999 addressed the Assistant Commissioner of Customs, Ahmedabad  is in the following terms :

"We wish to inform you that we had sold 100 Ten Tola  Gold Bars and 150 Ten Tola Gold Bars to the captioned  company under our invoice numbers 99/BAR/138 dated  25th October, 1999 for Rs.55,53,640/- and 99/BAR/139  dated 25th October, 1999 for Rs.81,49,025/-.

The above Ten Tola Gold Bars were out of the  consignment stock of 1000 TT bars imported by us from  Credit Suisse First Boston, Zurich under AWB No.085- 1490-2753 dated 20th September, 1999.  We had paid the  applicable customs duty at the time of clearance of the  consignment on 22nd September, 1999.  We also confirm  that the delivery was effected on our behalf by M/s.  Brinks Arya (India) Pvt. Ltd., Ahmedabad.

This letter has been issued at the request of M/s.  Riddhisiddhi Bullions Ltd.  We hope the above  information is sufficient and shall be glad to furnish any  further information you may require."  

       According to him, he had sold 200 gold biscuits to one Devangbhai  Patel on 23.10.1999, but had no document to establish the same or that he  had not received any payment therefor.  It was the further statement of the  said respondent that he had sold 300 gold biscuits to Shailesh Patel, but  again therefor no commercial invoice or delivery challan had been issued.  A  further statement was made to the effect that out of the said 300 gold  biscuits, 130 having UBS marking were purchased from one K.L. Chokshi  and remaining 170 were purchased from different parties, but again therefor  no payment was made either in cash or cheque.   Statement of Shailesh Patel  was recorded on 24.10.1999 under Section 108 of the Act when he disclosed  that he had purchased 300 gold bars from Paras Bullion but no bill had been  issued therefor nor any payment has been made by him.  On the said date,  statement of Naresh Chokshi was also recorded, wherein, allegedly, he did  not make any statement to the effect that he had sold any gold bar of UBS  mark to Paras Bullion.  The second statement of Shailesh Patel was recorded  on 29.10.1999, wherein he reiterated his earlier statement, stating :

"...On being further questioned, I have to state that the  details of the receipt/purchase of the said foreign mark  gold biscuits are narrated in the prior statement given by  me..."

       In his statement recorded on 28.10.1999, Vijay Dasharath Patel had  made a statement that details of purchases of the gold biscuits could be  furnished only upon perusal of his books of accounts.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12  

       We need not refer to the other statements made by other persons  recorded by the Customs Officers on that date, being not relevant for the  purpose of this case.  We may, however, notice that proceedees retracted  from their statements on 11.11.1999, alleging that he had the requisite  documents to support their contentions that gold seized were not smuggled  ones.   

       However, according to Vijay Dasharath Patel, 300 gold bars were sold  to M/s. S.K Jewellers, out of which 201 were purchased from M/s. K.L.  Chokshi and the rest were purchased from other jewellers.  According to  him, he did not maintain any stock register.  He further stated that he had  sold 200 gold bars to Patel Bullion on 23.10.1999, although he had not  received any payment from the said vendee.  

A show cause notice was issued upon the respondents on 1.3.2000  asking them to show cause as to why the seized gold bars should not be  confiscated and penalty should not be imposed.  Cause having been shown  and the matter having been heard, the Commissioner, by his order dated  28.2.2001, inter alia, held :

"....substantial number of foreign marked gold bars i.e.  361 pieces, were found to have been concealed in the  shoes, body parts of the noticees......         *               *               *               * ....In their initial statements recorded before the Customs  Officers on 24.10.99 both Shri Shailesh R. Patel and Shri  Vijay D Patel admitted that they had no documents for  legal importation....         *               *               *               * ....Section 123 of the Customs Act, 1962, which casts the  burden in respect of "Gold", on the person from whose  possession it is recovered, to prove that it is not  smuggled...

....Statements were not recorded under any duress or  mental torture."

       According to the Commissioner of Customs, the respondents had not  discharged their burden of proof in terms of Section 123 of the Act, in  support whereof the following findings were recorded :

?       The delivery challan issued by ABN AMRO Bank  to Riddi Siddi Bullion does not in any way account  for the possession of gold bars by Vijay Dashrath  Patel. ?       Shailesh Patel although stated that he had  purchased 300 gold bars from Paras Bullion, no  bill was issued in his name by the aforesaid firm  nor he has made any payment towards purchase of  300 foreign marked gold bars. ?       Statements dated 24.0.1999 were retracted on  29.10.1999 but retractions cannot be relied upon. ?       In the absence of any mention of identity or brand  specifications of the gold bars and also in face of a  clear admission that no payments have been made  or received and no bills having been issued, it is  fully established that all 500 gold bars were not  legally imported or acquired. ?       The bills bearing Nos.5877, 5960 and 5936 which  have been produced by Vijay Patel to prove his  possession of 200 gold biscuits cannot be relied  upon at all.  The gold biscuits seized are not of the  same brand for which the bills have been  produced.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12  

?       On 24.10.1999, Vijay Dasharath Patel has stated  that he had purchased 200 pieces of foreign mark  gold bars of "CREDIT SUISSEE" mark from M/s  Riddi Siddi Bullion on 23.10.1999.  However,  from the statement of Shri Dinesh authorised  signatory of M/s Riddi Siddi Bullion did not  mention whether the gold biscuits delivered to Mr.  Vijay Dasharath Patel were of CREDIT SUISSEE  mark.  It was also observed that the alleged Bill  No.294/GL/99/2000 dated 23.10.1999 also does  not show the markings of the brand name of the  gold biscuits. ?       Statement of Ashwinbhai Patel is relied upon to  show that Bill No.11931 was a complete after  thought and it had been in fact prepared on  24.10.1999.  Ashwinbhai Patel had stated that his  maternal nephew Shri Devang Patel had phoned  him on 24.10.1999 and informed him about the  recovery of the gold biscuits by police and on  being called by him, he had gone to the residence  of Shri Vijay Dasharath Patel on 24.10.1999 and  he had prepared the Bill No.11931. ?       Both Vijay Dasharath Patel, Proprietor of Paras  Bullion and Shailesh Patel admitted that no  payment has made for the 300 pieces of foreign  mark gold bars covered by Bill No.11931.   Further, the alleged Bill No.294/GL/99/2000  purported to be issued by Riddi Siddi Bullion in  favour of Paras Bullion for 350 gold bars does not  contain the details regarding identity/brand of the  gold bars nor the printed or pre-printed Sl.No. of  the Bill.  Also no evidence of payment made by  M/s Paras Bullion to M/s Riddi Siddi Bullion has  been produced. ?       M/s Riddi Siddi Bullion had relied upon Bill  No.2753 dated 22.10.1999 issued by Anjali Exim  Pvt. Ltd. in favour of M/s. Riddi Siddi Bullion for  200 gold brars of UBS mark.  However, it is found  that there are no gold biscuits of foreign origin of  UBS brand among the 500 gold biscuits and,  therefore, the said bill has no relevance with the  gold biscuits under seizure. ?       The plea taken by Vijay Dasharath Patel in his  statement dated 11.11.2004 regarding the gold  biscuits in his possession, is an after thought and  the same is not acceptable.  In view of the facts  which have been initially stated in the statement  dated 24.10.1999 and which have been  corroborated by Shailesh Patel in his statement  dated 24.10.1999, it is established that there was  no document to show the source of 300 gold bars  sold by Vijay to Shailesh Patel.   ?       It was found on close scrutiny of the documents  that bills, delivery challans, vouchers produced by  the notices that none of these is serial numbered or  pre-serial numbered.  Ad hoc numbers have been  given to these documents and hence these do not  inspire confidence and hence the documents  produced have no credibility. ?       Although it was admitted by Vijay Dasharath Patel  and Shailesh Patel that no bills, vouchers, delivery  challans were issued in respect of the sale of 300  gold bars.  Entries have been made and Bill  No.11930 and 11931 have been subsequently  prepared on 24.10.1999 to legalise the sale.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12  

?       72 entries of purchase and sale have been made in  the stock account of M/s Paras Bullion after the  alleged transactions of bills No.11930 and 11931.   It is humanly impossible that all these entries can  be made within one hour and that the entries in  which stock register of M/s Paras Bullion were  made with a view to create the impression of legal  purchase and sale of 500 foreign mark gold  biscuits. ?       No man of ordinary prudence will transport legally  imported foreign mark gold biscuits in the way  notices have been found to be doing.  The facts  and circumstances of the recovery of the gold bars  by way of concealment in shoes and other body  parts of the notice is a positive circumstancial  evidence to suggest that the gold was illegally  acquired and hence it was transported in a  surreptitious and clandestine manner more often  adopted by smugglers. ?       Satishbhai Patel, who is the accountant of M/s S.K.  Jewellers, was also liable as he had abetted  Shailesh Patel in contravention of the various  provisions of the Customs Act. ?       All the carriers of gold bars had not demanded any  document in support of the illicit import/  acquisition of the gold biscuits received by them  from Satish Patel and Vijay Dasharath Patel and as  such have abetted Shailesh Patel and Vijay  Dasharath Patel in committing contravention of  law. ?       Accordingly, it was directed that the 500 gold bars  weighing 58.320 Kgs. valued at Rs.2,70,00,000/-  be confiscated under section 111(D) of the  Customs Act.  Penalties were also imposed on the  notices."  

       Appeals filed by Respondents before the Tribunal, by reason of an  order dated 5.6.2003 were dismissed.

       Applications for rectification of mistakes were filed alleging that  various aspects had not been considered in the original order.  Special Civil  Application No. 5468 of 2004 was also filed before the High Court of  Gujarat at Ahmedabad against the said order of 5.6.2003.   

       The Tribunal by an order dated 7.1.2004 allowed the applications for  rectification of mistakes filed by the respondents.   

       Against the said order dated 7.1.2004, the Revenue filed Special Civil  Application No.2640 of 2004.  

       The High Court set aside the order dated 7.1.2004 passed by the  Tribunal in the applications for rectification of mistakes and on the same day  allowed the said Special Civil Application filed by the respondents, in terms  whereof the order of the Tribunal was set aside and the matter was directed  to be considered afresh.

       The Tribunal, thereafter, passed an order on 30.9.2005, wherein, inter  alia, it was held :

"......This finding of the Commissioner cannot be upheld  since the Appellant has produced documentary evidence  of having purchased/procured the 200 bars from RBL  who in turn have got the same from M/s. ABL Amro  Bank, Ahmedabad, the importers of TT bars at  Ahmedabad, one of the permissible route as per the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12  

findings of the Commissioner.  In any case, the  Commissioner and the department do not reject the letter  dt.12.11.99 of ABN Amro Bank certifying "CREDIT  SUSSE" TT bars to RBL nor does the Commissioner find  RBL to have given forged/fabricated delivery  challan/invoices to the appellants, ABN Amro Bank or  RBL or M/s. K.L. Chokshi or and M/s. Amrapali  Industries are not being questioned on their credibility  the TT bars supplied by them cannot be found to be non  duty paid or and cleared from an unauthorized port  without payment of duty and thus liable to confiscation  under Section 111(d) of the Customs Act, 1962...         *               *               *               * ...Therefore, there was no reason to believe that gold  covered by the ABN Amro Bank document was not duty  paid....."

       Dealing with the submissions made on behalf of the proceedees, it  was held :

"....These submissions have force and discharge the  burden of the TT bars to be duty paid and not smuggled...         *               *               *               * ...Further, in their statements recorded on 24.10.1999  itself, everybody i.e. Dinesh C. Jain of RBL, Sh. Naresh  K. Chokshi of M/s. K.L. Chokshi and Shri Yeshwant A.  Thakkar of Amrapali Ltd., not only admitted having sold  the gold to the appellants but also provided documentary  evidence of having purchased the gold from Banks.  By  not issuing any Show Cause Notice to those persons, we  find that the Revenue agrees and were fully satisfied that  the gold was legally acquired by them and supplied to the  appellants.         *               *               *               * ?       Nandubhai Soni, one of the carriers was let off  although he was similarly placed as other carriers. ?       Transportation of gold in shoes appears to be a  normal fashion of transporting gold bars, by carriers  in the bullion market, irrespective of the fact  whether they have bills or vouchers. ?       Satishbhai Patel, the Accountant of S.K. Jewellers  cannot be said to have abetted Shaileshbhai Patel by  preparing ante dated bills.  The proven practice of  sales in this market would led us to find nothing  amiss in invoices being written/prepared with or  without brand marks. ?       ABN AMRO Bank letter dated 12.11.99 confirms  that the gold was legally imported. ?       Although the documents do not show that the gold  bars were of a particular origin, there is no statutory  requirement which prescribe invoices to describe  foreign marks. ?       Admitted fact that no payments were made as on the  date of seizure in respect of the seized gold bars.   However no adverse inference could be drawn. ?       We do not consider anything to be amiss in  payments for the 500 bars not having been effected. ?       We are arriving at our findings that the entire 551  gold TT bars..... To be duty paid gold.... ?       Dinesh Jain, Naresh Chokshi and Yeshwant Thakkar  of Amrapali admitted having sold gold bars to the  Appellants.  The Revenue had not issued any show  cause to these persons. ?       Confiscation order and penalty set aside."

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12  

       As indicated hereinbefore, on an appeal preferred against the said  judgment by the Revenue, the High Court refused to interfere on the premise  that no substantial question of law arise for its consideration.

       Mr. Mohan K. Parasaran, learned Additional Solicitor General  appearing for the Union of India would contend that the High Court  committed a manifest error in opining that no substantial question of law  arose for its consideration, although, it is evident that the Tribunal had failed  to consider the well reasoned judgment of the Commissioner of Customs in  its proper perspective.  The learned counsel urged that the High Court failed  to notice that the Tribunal had referred to several trade practices in support  whereof the proceedees did not adduce any evidence.  It was submitted that  the Tribunal furthermore failed to consider the question as to whether the  proceedees had discharged their burden of proof cast upon them in terms of  Section 123 of the Act.

       Mr. Joseph Vella Palli and Mr. Anand Narain Haksar, learned  Senior Counsel appearing on behalf of the respondents, on the other  hand, would submit that from a bare perusal of the order of the learned  Tribunal, it would appear that the reasonings of the Commissioner of  Customs had been considered in great details therein and, thus, this Court  should not interfere therewith.  It was urged that no question of law was  raised in relation to the specific findings of fact arrived at by the Tribunal  and in that view of the matter, having regard to the provisions of Section  130 of the Act, the findings of fact being binding on the High Court, no  error has been committed by it in opining that no substantial question of  law arise for its consideration.

       Section 130E of the Customs Act, as it stood then, provided for an  appeal from an order passed in appeal by the Appellate Tribunal, save and  except those specifically mentioned therein, only in the event a satisfaction  is arrived at by the High Court that the same involves a substantial question  of law.

       Before the High Court, as also before us, several questions of law  have been raised.  We, however, in view of the order proposed to be passed,  need not deal with all of them in details.

       We are not oblivious of the fact that the High Court’s jurisdiction in  this behalf is limited.  What would be substantial question of law, however,  would vary from case to case.                   Moreover, although, a finding of fact can be interfered with when it is  perverse, but, it is also trite that where the courts below have ignored the  weight of preponderating circumstances and allowed the judgment to be  influenced by inconsequential matters, the High Court would be justified in  considering the matter and in coming to its own independent conclusion.   {See Madan Lal vs. Mst. Gopi & Anr. [AIR 1980 SC 1754].}

       The High Court shall also be entitled to opine that a substantial  question of law arises for its consideration when material and relevant facts  have been ignored and legal principles have not been applied in appreciating  the evidence.  Arriving at a decision, upon taking into consideration  irrelevant factors, would also give rise to a substantial question of law.  It  may, however, be different that only on the same set of facts the higher court  takes a different view.  {See Collector of Customs, Bombay vs. Swastic  Woollens (P) Ltd. & Ors. [(1988) Supp. SCC 796]; and Metroark Ltd. vs.  Commissioner of Central Excise, Calcutta [(2004) 12 SCC 505].}  

       Even in a case where evidence is misread, the High Court would have  power to interfere.  {See West Bengal Electricity Regulatory Commission  vs. CESC Ltd. [(2002) 8 SCC 715]; and also Commissioner of Customs,  Mumbai vs. Bureau Veritas & Ors. [(2005) 3 SCC 265].}

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12  

       In M/s. Dutta Cycle Stores & Ors. vs. Gita Devi Sultania & Ors.  [(1990) 1 SCC 586], this Court held :

       "Whether or not rent for the two months in  question had been duly paid by the defendants is a  question of fact, and with a finding of such fact, this  Court does not ordinarily interfere in proceedings under  Article 136 of the Constitution, particularly when all the  courts below reached the same conclusion.  But where  the finding of fact is based on no evidence or opposed to  the totality of evidence and contrary to the rational  conclusion to which the state of evidence must  reasonably lead, then this Court will in the exercise of its  discretion intervene to prevent miscarriage of justice."

       We have hereinbefore noticed the judgment of Tribunal as also the  one rendered by the Commissioner of Customs.  The Commissioner of  Customs, inter alia, has gone into the entire materials brought on records by  the parties.  It has taken into consideration a number of circumstances in  arriving at its findings.  The Tribunal, however, as noticed hereinbefore,  inter alia, not only proceeded on the basis that one of the carriers had been  let off but also the purported normal fashion of transport of gold bars for  which no evidence was brought on records.  

       Mr. Joseph Vella Palli would submit that the Tribunal consists not  only of judicial member but also of technical member and in that view of  the matter the Tribunal could take judicial notice of the trade practice  prevailing in a particular trade and, thus, no illegality has been committed  thereby.  No evidence, however, admittedly, was laid in relation to the  purported trade practices. We, therefore, cannot accept the said  contention.  This Court, in Hukma vs. State of Rajasthan [AIR 1965  SC 476], laid down the law in the following terms :

".....Learned counsel rightly pointed that while S.178-A  has the result of placing the burden of proof that the gold  was not smuggled on the accused, it is of no assistance to  the prosecution to prove that the accused was carrying  the gold knowingly to evade the prohibition which was  for the time being in force with respect to the import of  gold into India.  Once, however, it is found, as it must be  found in this case, in consequence of the provisions of  S.178-A (the accused has not tried to discharge the  burden that lay on him that the gold was not smuggled)  that he was carrying smuggled gold, the circumstances  under which the gold was discovered, the manner in  which he was carrying the gold, the considerable quantity  of the gold that was being carried and the form in which  gold was being carried, namely, blocks and bars in which  the major portion of the gold was found, all these  circumstances establish beyond a shadow of doubt that  the accused was carrying the gold knowingly and with  the intention of evading the prohibition that was in force  with respect to the import of gold into the country.  Mr.  Kapur tried to argue that when gold is carried by persons,  they often carry it in this manner in a nouli concealed  under trousers.  That may well be so.  Here, however,  there is an additional circumstance that a pointsman of  the Railway, not expected to have so much gold in his  possession, was carrying the gold which was, as already  mentioned, in six blocks and 22 bars apart from some  small pieces and one pair of murkees.  The total quantity  was as much as 286 tolas and 11 annas, that is, about  three kilograms.  When all these circumstances are taken

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12  

together, it is not possible to accept learned counsel’s  suggestion that he might be carrying the gold innocently  having purchased it from somebody.  In our opinion, the  High Court has rightly held that all the ingredients of the  offence under S.167(81) of the Sea Customs Act have  been established...."    

       The Tribunal furthermore noticed only the last statements made by the  proceedees.  The purported subsequent statements, in the light of their earlier  statements, were not taken into consideration.

       It had furthermore not taken into consideration in regard to the  connectivity of the gold bars imported, in respect whereof the custom duty  had been paid and the gold bars seized.   

       We, therefore, do not accept the contention of Mr. Vella Palli that no  question of law had  been raised.  It was done by the Revenue in its grounds,  stating :

"That the Ld. Tribunal has erred in holding that the  finding of the commissioner is not sustainable because  Shri Vijay D. Patel, Prop. of M/s. Paras Bullion has  produced documentary evidence of purchasing 200 bars  from M/s. Riddhisidhi Bullion Ltd., which was received  by the said Riddhisidhi Bullion Ltd. from ABN Amro  Bank, Ahmedabad.  It is worthwhile to note that the  document was not accompanying the consignment at  time of detection by the police and was produced  subsequently at the time of statement of Shri Vijay D.  Patel, on 24-10-1999.  The Ld. Tribunal has recorded this  finding by stating reasons that the commissioner and the  department has not rejected the letter dated 12.11.1999 of  the ABN Amro Bank certifying "Credit Suisse" TT bars  to RBL nor they have alleged that RBL has given  false/fabricated delivery challans/invoices to the noticees.  It is respectfully submitted that the Ld. Tribunal has  recorded the above finding without any material or  evidence on record and without even looking into the  content of the letter dated 12.11.1999 of the ABN Amro  Bank.  It is submitted that the bank’s letter referred to  invoices dated 25.10.1999 and in such circumstances the  question of effecting delivery by the bank to the  authorized dealer under delivery challan dated  23.10.1999 which is two days prior to the date of invoice  is not credit worthy.  It is also against normal trade  practice and makes the transaction suspect.  Further, a  bare glance at the documents of the bank undoubtedly  establishes that the stock of FM GB shown in the  delivery challan does not establish that the said challan  relates to the gold pieces seized under panchnama dated  28/29.10.1999.  It is submitted that no convincing record/  evidence is led before the competent authority that the  200 seized pieces of gold bars are clearly linked/part  (including the same brand name) of the stock shown in  the aforesaid delivery challans and invoices.  Thus, a  vital link of sale transaction of the seized gold is not fully  established.  It is the duty of the person purchasing  foreign mark gold bars to see that the correct description  of the goods is entered in the respective challans"  

       The aforementioned letter dated 12.11.1999 issued by the ABN  AMRO Bank was the main fulcrum of the reasonings of the Tribunal.  It  was, therefore, in our considered view, required to be considered at some

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12  

details.  Even the error of law committed by the Tribunal in relying upon the  trade practices had expressly been taken by the Revenue, stating :

"The Ld. Tribunal has erroneously held that the proven  practice of sales in gold/bullion market lead to finding  that there is nothing amiss in invoices being  written/prepared with or without brand marks,  subsequent to sales and deliveries and thus the penalty as  arrived on the Shri Satishbhai A. Patel is to be set aside.   It is submitted that Shri Satishbhai A. Patel has also  actively concerned himself in abetting the smuggling of  the seized gold as no prudent buyer or seller will buy or  sell such a huge quantity of gold without mentioning  individual mark or details."

       Similarly, in regard to the fact of non-payment of consideration had  been raised by the Revenue in its grounds.

       In regard to the purported retracted statements, the Commissioner  dealt with the matter elaborately, opining :

"....The retractions are in the form of two separate  (almost identical) letters both dated 29.10.99 from Shri  Shailesh R. Patel and Shri Vijay D. Patel wherein they  have merely stated that their statements were taken  forcibly.  They also said that the Police and the Customs  Officers had illegally detained them in "their own  premises".  Similarly, telegrams have been received on  29.10.99 from other Noticees alleging wrongful  confinement by the Police & Customs officers........         *               *               *               * It is observed that all these retractions are belated, i.e.  after 6 days, during which the investigations had been  carried out.  The Noticees or their family members could  have sought the intervention of the senior officers of the  department during this period i.e. 23.10.99 to 28.10.99 if  there was any truth in their allegations of wrongful  confinement or detention.  This has not been done.   Moreover, they have not produced any evidence to  support that any physical or mental torture was inflicted  on them.           The CEGAT in their decision in the case of P.  Pratap Rao Sait versus Collector of Customs, Cochin  reported at 1988 (33) ELT 433 (Trib.) had held that:

"The detailed statement before Customs officers prima  facie merits acceptance and by mere retraction, the  original statement does not lose all evidentiary value."

Since the retractions are made belatedly and without any  supporting evidences, these have no evidentiary value in  the eyes of law."

       It was furthermore held by the Tribunal that the bills had been  prepared subsequently.

       The learned Commissioner had opined that their existed serious  discrepancies in the bills or vouchers.  The Tribunal, in our opinion, should  have dealt with the aforementioned findings of the Commissioner.

       Mr. Vella Palli has strongly relied upon Meenakshi Mills, Madurai  vs. The Commissioner of Income Tax, Madras [1956 SCR 691], wherein  it was held :

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12  

".....On these facts, the Tribunal came to the conclusion  that the contentions of the Department had been fully  established, namely, that the intermediaries were  dummies brought into existence by the appellant for  concealing its profits, that the sales standing in their  names were sham and fictitious, and that the profits  ostensibly earned by them on those transactions were, in  fact, earned by the appellant, and should be added to the  amounts shown as profits in its accounts.  The point for  decision is whether there arises out of the order of the  Tribunal any question which can be the subject of  reference under section 66(1) of the Act.  Under that  section, it is only a question of law that can be referred  for decision of the court, and it is impossible to argue that  the conclusion of the Tribunal is anything but one of  fact."                             There is no dispute as regards the proposition of law but, as noticed  hereinbefore, same question of law did arise for consideration of the High  Court.

       For the reasons aforementioned, we are of the opinion that the High  Court may not be entirely correct in holding that no substantial question of  law arise for its consideration.  Ordinarily, although, we have referred the  matters back to the High Court, having regard to the fact that we have  ourselves examined the findings of the Tribunal and the findings of the  Commissioner, we are of the opinion that instead of remitting the matter  back, interest of justice would be met if upon setting aside the judgment of  the High Court and Tribunal the matters are remitted to the latter for  considering them afresh.  The parties shall be entitled to raise their  respective contentions before the Tribunal.  We intend to make it clear that  our reference to the findings of the Commissioner as also the Tribunal was  made only for the purpose of considering as to whether any substantial  question of law arose for consideration before the High Court and for no  other purpose.  We may not therefore be understood to arrive at any finding  in regard to any question which would arise for the consideration of the  Tribunal.

       For the reasons aforementioned, the appeals are allowed.  The  impugned judgments of the High Court as well as the order of the Tribunal  are set aside.  The matter is remitted to the Tribunal for consideration thereof  afresh.