State v. K. M. Gopal — 1978 DIGILAW 207 (MAD)

Judgment :- Appeal under Section 378(4) of the Code of Criminal Procedure, 1973 against the acquittal of the aforesaid Respondent Nos. 1 & 2 in each of the appeals (Accused Nos. 1 & 2) of an offence of A. I. (C. A. 528/75) offence under Rules 173(8)(1)(2)(4) read with Rules 173(a)(b) & (d) and Rule 52 (A) of the Central Excise Rules, 1944 and under Sections 9(a), 9(b) and 9(d) of the Central Excises and Salt Act, 1944 These appeals coming on for hearing on Monday the 23rd and Monday the 30th day of January, 1978 upon perusing the petitions of Appeal and the record of the evidence and proceedings before the said lower Court and upon hearing the arguments of Mr. Habibullah Badsha, Central Govt. Prosecutor on behalf of the Appellant in both the appeals and of Mr. A. Nagarajan, Advocate for the respondent Nos. 1 and 2 in each of the Appeal (Accused Nos. 1 & 2) and having stood over for consideration till this day, the court delivered the following Judgment. Criminal Appeal No. 528 of 1975 is an appeal preferred by the State represented by the Asst. Collector of Central Excise, Vellore against the order of the judicial Second Class Magistrate of Gudiyatham in C. C. No. 592 of 1973 acquitting the two accused-respondents K. M. Gopal and T. P. Velayutham under Sec. 245(1) Cr. P. C. Criminal Appeal No. 529 of 1975 is a similar appeal preferred by the State represented by the Asst. Collector of Central Excise, Vellore against the order of the learned Judicial Second Class Magistrate, Gudiyatham in C. C. No 591 of 1973 acquitting the accused-respondents K.M. Mahalingam and T. P. Velayutham under Section 245(1) of the Criminal Procedure Code. Two separate complaints were laid by the State represented by the Assistant Collector of Central Excise, Vellore against the respondents in both the appeals for offence under Sections 9(a) (b) and 9(d) of the Central Excises and Salt Act of 1944 and Rules 173 G(1)(2) and (4) read with Rules 173 Q(a)(b) and (3) and Rule 52-A of the Central Excise Rules, 1944.The material allegations in the complaint were as follows :- 2. The accused in C.C. No. 591 of 1973 who is the first respondent in C.A. No. 529 of 1975 is running a match factory at Gudiyatham under the name and style of Mohan Match Industries under a valid licence issued by the Central Excise Department at premises No. 73 Mailpatti Road, Cheruvanju village in Gudiyatham taluk while the first accused in C. C. No. 592 of 1973 who is the first respondent in C. A. No. 528 of 1975 is running a match factory at Gudiyatham under the name and style of Gopal Match Industries at No. 3, Sannadhi St., Nellorepet, Gudiyatham under a valid licence issued by the Central Excise Department. Both the aforesaid match factories were using an approved trade label 'chank' on the matches manufactured by those factories. The Gudiyatham Match Industries was also using the same trade label and it was with the consent of the Gudiyatham Match Industries that the aforesaid match factories were using the same label. The second accused both in C. C. No. 592 of 1973 and C. C. No. 593 of 1973 who is second respondent both in C. A. No. 528 of 1975 and C. A. No. 529 of 1975, is a saleman working in the Gudiyatham Match Industries and is also the Prop. of M/s. Moorthy Traders at Gudiyatham and he was being used for moving out the matches manufactured by the aforesaid factories to outside agencies in a van bearing registration No. MSY 5229 belonging to M/s. Gudiyatham Match Industries and in a van bearing registration No. TNJ 337 belonging to M/s. Gopal Match Factories. On 29-8-1972, the Superintendent of Central Excise, Hqrs. Prev. Madras along with other Central Excise Officers intercepted the van TNJ 337 driven by one Ramalingam, the driver of M/s. Gudiyatham Match Industries at Chettupattu in North Arcot Dist. The van was found to contain 265 bundles of matches and had the 'chank' label. These matches were despatched from the depot of the second accused who was also seated in the van. When those 265 bundles of matches found in the van were examined, it was found that 20 of those bundles related to M/s. Gudiyatham Match Industries, 170 of those bundles belonged to M/s. Gopal Match Industries and 75 of the bundles belonged to M/s. Mohan Match Industries. When those 265 bundles of matches found in the van were examined, it was found that 20 of those bundles related to M/s. Gudiyatham Match Industries, 170 of those bundles belonged to M/s. Gopal Match Industries and 75 of the bundles belonged to M/s. Mohan Match Industries. The van driver produced a letter given by M/s. Moorthy Traders of which the second accused in both the cases, was the proprietor. That letter showed a despatch of 275 bundles in the van but actually only 265 bundles were found in the van. Since the shortage of 10 bundles was not adequately explained, the van was taken to Pondicherry and a probe was made when it was noticed during the probe that the bundles with serial numbers far ahead of the Sl. Nos. found on the 265 bundles were available in the market already. In the case of Sl. Nos. 583, 581 and 608 noticed on some of the bundles, wrappers with those Sl. Nos. were noticed in three shops at Villianoor. The Superintendent of Central Excise, Hqrs. Prev., Madras had thus round that some of the bundles in the van had the same serial numbers as some bundles which had already been supplied and gone into circulation in the market. Hence the entire consignment of 265 bundles of matches were seized by the Superintendent on a reasonable belief that in respect of that consignment, duty had not been paid. A statement was also recorded from the 2nd accused in the presence of witnesses. During the course of further investigation, it was found that the first accused had supplied match bundles manufactured at his factory bearing identical serial numbers to different dealers. A check of distributors and retail dealers also resulted in the recovery of the match wrappers as well as full match bundles which bore numbers identical with those numbers found on the 265 bundles seized from the van. Therefore, the first accused had thus removed from his factory premises bundles of matches bearing 'Chank' labels bearing the same identical serial nos. Therefore, the first accused had thus removed from his factory premises bundles of matches bearing 'Chank' labels bearing the same identical serial nos. without a gate-pass and without payment of duty to the Central Government and without debiting the amount of the duty in the statutory registers maintained at his factory and he did so with the aid and connivance of the first accused and that thereby the first accused in both the cases have contravened Rules 173F, 173G(1)(2) and(4) read with Rule 173-Q 9(a), (b) and (d) and 52A of the Central Excise Rules, and Section 9(a) and (b) of the Central Excises and Salt Act, 1944 while the 2nd accused in both the cases has contravened Rule 52-A of the Central Excise Rules, 1944 and Section 9(d) of the Central Excises and Salt Act of 1944. 3. In support of the aforesaid allegations in the complaints, the prosecution examined eight witnesses in C.C. No. 592 of 1973 against the judgment in which C.A. No. 528 of 1975 has been filed and had also filed 27 documents. In C.C. No. 591 of 1973 against the judgment in which C.A. 529 of 1975 has been preferred 21 witnesses were examined by the prosecution and as many as 62 exhibits were filed. The learned Magistrate, after considering the evidence found that the guilt of the accused in both the cases have not been established beyond reasonable doubt and hence he acquitted the accused. The State has therefore preferred these appeals. Section 9(1) of the Central Excises and Salt Act of 1944 runs as follows : - 'Whoever commits any of the following offences namely :- (a) contravenes any of the provisions of a notification issued under sec. 6 or of sec. The State has therefore preferred these appeals. Section 9(1) of the Central Excises and Salt Act of 1944 runs as follows : - 'Whoever commits any of the following offences namely :- (a) contravenes any of the provisions of a notification issued under sec. 6 or of sec. 8 or of a rule made under clause (iii) of sub-section (2) of section 37; evades the payment of any duty (b) payable under this Act; removes any excisable goods in (bb) contravention of any of the provisions of this Act or any rule made thereunder or in any way concerns himself with such removal; acquires possession of, or in (bbb) any way concerns himself in transporting, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with any excisable goods which he knows or has reason to believe are liable to confiscation under this Act or any rule made thereunder; xx xx xx xx (c) attempts to commit, or abets the (d) commission of, any of the offences mentioned in clauses (a) and (b) of this section, shall be punishable, Rule 173-F of the Rules framed under the Central Excises and Salt Act says : - "Where the assessee has complied with the provisions of rules 173-B, 173-D and, where applicable, 173-C he shall himself determine his liability for the duty due on the excisable goods intended to be removed and shall not, except as otherwise expressly provided in these rules," * remove such goods, unless he has paid the duty so determined.'Rule 173-B says : "1. Before removing any excisable goods, every assessee shall file with the proper officer for approval a list in such form as the Collector may direct, in quadruplicate showing - (a)the full description of (i) all excisable goods produced or manufactured by him, (ii) all the excisable goods already deposited or likely to be deposited from time to time without payment of duty in his warehouse; (b)................................... (c)the rate of duty leviable on each such goods; and (d)................................. 2. The Proper Officer shall, after such inquiry as he deems fit, approve the list....and return one copy of the approved list to the assessee who shall, unless otherwise directed by the Proper Officer, determine the duty payable on the goods intended to be removed in accordance with such list" * . 2. The Proper Officer shall, after such inquiry as he deems fit, approve the list....and return one copy of the approved list to the assessee who shall, unless otherwise directed by the Proper Officer, determine the duty payable on the goods intended to be removed in accordance with such list" * . Rule 173 G while describing the procedure to be followed by the assessee, states that every assessee shall, except as otherwise expressly provided in these rules, forthwith remove the goods on which duty has been determined and paid and every such removal shall take place under a gate-pass or gate-passes or like document or documents in accordance with the provisions of Rule 52-A and such gate-pass or gate-passes or like document or documents shall also show the rate and the amount of duty paid on such goods and the time of actual removal of the goods from the factory. Rule 173Q gives power to confiscate all excisable goods etc., if any manufacturer, producer or licensee of a warehouse (a) removes any excisable goods in contravention of the provisions of any rule, or (b) does not account for all such goods manufactured, produced or stored by him, or (c) engages in the manufacture, production or storage of such goods without having applied for the licence required under Sec. 6 of the Act or (d) contravenes the provisions of any rule with intent to evade payment of duty.Rule 52-A states that no excisable goods shall be delivered from a factory except under a gate pass in the proper form or in such other form as the Collector may in any particular case or class of cases prescribe signed by the owner of the factory. Therefore, the rules under the Central Excises and Salt Act prescribe the procedure for self assessment by the person who manufactures excisable goods of the duty payable by him in respect of the excisable goods manufactured in his factory and the payment of that excise duty before the excisable goods are removed from the factory by means of gate-passes in which the manufacturer is required to note down also the amount of the duty already paid by him and the time when the excisable goods are removed from the factory. The prosecution case is that the first accused in both these cases, in order to evade payment of the excise duty, removed excisable goods from their factories without a gate-pass in a van and the second accused abetted the commission of the aforesaid offence. 4.It cannot be and is not seriously disputed that on 29-8-72 a van TNJ 337 belonging to M/s. Gopal Match Factories and driven by one Ramalingam, a driver of the Gudiyatham Match Industries was intercepted when it was carrying 265 bundles of matches. The prosecution case is that all these 265 bundle of matches had been removed from the factories of the first accused in both these cases without payment of excise duty and without gate-passes in order to evade the payment of excise duty on them. The prosecution has tried to prove the offence alleged against the accused by means of circumstantial evidence and in a circumlocutus manner. They have attempted to show that in these 265 bundles the Sl. Nos have been given which are identical with the Sl. Nos. of bundles of matches already removed from the factory and supplied to the market; and that, in other words, in order to evade the payment of excisable duty in respect of these 265 bundles the first accused in both the cases had stamped the same serial numbers on those bundles as the serial numbers already given to bundles which had already been removed from the factories after payment of excise duty, so that if these bundles have come to the notice of the excise authorities, the excise authorities may be misled into believing that excise duty had already been paid in respect of these bundles of matches. After noticing these 265 bundles in the van, the excise authorities conducted a probe. They went to various places and seized certain wrappers as well as bundles of matches. From the shop of P W 4 the wrapper bearing serial No. 583 (M.O. 266) was recovered and from P W. 4 a statement Ex. P. 5 was recorded. From PW 2 a wrapper with serial No. 581 (M. O. 267) was recovered and Ex. P. 6 was recorded from him. From the shop of PW 3 a wrapper M. O. 268 bearing Serial No. 608 was recovered and a statement Ex. P. 7 was recorded. P. 5 was recorded. From PW 2 a wrapper with serial No. 581 (M. O. 267) was recovered and Ex. P. 6 was recorded from him. From the shop of PW 3 a wrapper M. O. 268 bearing Serial No. 608 was recovered and a statement Ex. P. 7 was recorded. P. W. 3 however did not support the case of the prosecution and he was treated as hostile. From P. W. 5 a wrapper M. O. 269 bearing serial No. 578 was recovered and a statement Ex. P. 13 recorded from him. From PW 7 a wrapper MO 277 bearing serial No 587 was recovered and the statement Ex P. 17 was recorded from him. From P. W. 8 a wrapper MO. 278 bearing serial No. 573 was recorded and his statement Ex P. 18 was recorded. But P. W. 8 did not support the case of the prosecution and he was treated as hostile by the prosecution. From P.W. 16) a wrapper MO 279 bearing serial No. 621 was recovered and the statement Ex. P. 19 was recovered from him. 5. M. O. 48, a bundle of matches bore serial No. 583 which was found in wrapper MO. 266 while the bundle of matches MO 46 bore serial No 581 which was the serial number found on wrapper MO 267. Likewise on the bundle of matches MO 73 serial No. 608 was found and that was also the serial No. found on the wrapper MO 268. The serial No 578 found on the bundle of matches MO 43 was also found on the wrapper MO 269 while the bundle of matches MO 52 bore the serial No 587 which was found on the wrapper MO 277. The bundle of matches MO 38 had the serial No. 573 which was the serial No. found on the wrapper MO 278. The serial No 621 found on the bundle of matches MO 86 was also found on the wrapper M O 279. Then from P. W. 6 seven bundles of matches bearing the same serial numbers as were found on the bundles of matches MOs 39, 42, 43, 58, 36, 40 and 63 recovered from the van were recovered from P. W. 6 and his statement Ex. P 15 was recorded, but P. W. 6 did not support the prosecution case and he was treated hostile by the prosecution. P 15 was recorded, but P. W. 6 did not support the prosecution case and he was treated hostile by the prosecution. From P W 9 three bundles of matches bearing serial Nos. 557, 567 and 577 which were the serial numbers found on the bundles of matches MOs 22 and 32 recovered from the van were recovered from P. W 9 and his statement Ex. P. 21 was recorded. From P W 15 a bundle of matches bearing serial No 604 was recovered and that was also the serial No. found on the bundle of matches MO 69 one of the bundles recovered from the van. The statement Ex P 22 was recorded from PW 15. PW 15 however did not support the prosecution case and was treated as hostile by the prosecution. Likewise, PW 10 from whom was recovered a bundle of matches containing serial No 590 which was the serial No. found on the bundle of matches MO 55 recovered from the van and P W. 17 from whom was recovered the bundle of matches MO 285 bearing serial No 574 which allied with the serial No found on the bundle of matches MO 39 recovered from the van, did not support the prosecution case and they were treated hostile by the prosecution.From the shop of P W 14 a bundle of matches MO 286 was recovered and from the shop of P. W. 6 another bundle MO 287 was recovered and both those bundles contained the same serial No., namely, 541. From these circumstances, the prosecution wants the Court to infer that for the purpose of evading excise duty the first accused with the help of the second accused removed the bundles of safety matches from the factory, putting on the labels of those bundles serial numbers which had already been put on bundles of matches sold in the open market. It has however been contended on behalf of the appellants that the aforesaid circumstances would not lead to such an inference at all, for there is absolutely no evidence to show that the bundles and wrappers recovered from the various persons mentioned above were bundles and wrappers of matches manufactured in the factory in the same year. It is admitted that bundles of matches manufactured during the course of one year will be bearing serial numbers starting from 1. It is admitted that bundles of matches manufactured during the course of one year will be bearing serial numbers starting from 1. The next year however instead of continuing the serial numbers, fresh numbers would be started beginning from number 1. Therefore it is that the learned Counsel for the respondents have argued that the mere fact that the serial numbers were found on wrappers and bundles of matches already in the market and those numbers tallied with some of the numbers found on the bundles of matches recovered from the van, it cannot be predicted with any amount of certainty that the matches so removed from the factories of the first accused in the van were bundles which were taken out of the factory without gate-pass for the purpose of evading the payment of excise duty. 6.The learned Counsel for the respondents have also argued that the possibility of somebody else having passed off as bundles of matches manufactured in the factories of the first accused, the bundles of matches made by those third persons, on which serial numbers have been put and the trade name 'Chank' had been put cannot be ruled out. PWs 5 and 9 were not able to say who were the persons who supplied them with the bundles of matches which had the wrapper MO 269 and the bundles MOs 22 and 32 recovered from P. W. 9. It has also been contended by the learned Counsel for the respondents that the excise officials instead of going to the factory and making a thorough check to find out whether there has been an evasion of excise duty in respect of the bundles seized from the van, have simply based the entire prosecution case on the recovery of wrappers and bundles contained in the same serial numbers as were found on bundles of matches recovered from the van.. W. 4 from whose shop wrapper MO 266 was recovered has stated that it was also the practice to bring other articles purchased in covers which originally contained match bundles. His further evidence is that some persons used to supply match bundles to his shop and some of those persons used to bring those bundles on cycles and he cannot say who those persons were. His further evidence is that some persons used to supply match bundles to his shop and some of those persons used to bring those bundles on cycles and he cannot say who those persons were. PW 5 from whom the bundle of matches MO 269 was recovered has also stated that he does not know who supplied that bundle. PW 7 from whom also a bundle of matches was recovered and from which bundle the wrapper MO 277 was seized has also stated that empty covers of bundle of matches would be used to bring other articles purchased from outside or to send to others articles purchased from his shop. He also does not know who were the persons who supplied him with the bundles of matches. 7.The learned Magistrate found that the evidence adduced by the prosecution was not sufficient to prove the charges against the accused. The learned Magistrate has pointed out first of all that three factories used the same trade name 'Chank' and hence the same serial number is likely to be found in three sets of bundles manufactured, namely, in each set manufactured by each of the three companies. The learned Magistrate has further stated that the chain of evidence brought before this court does not bear the weight of the prosecution case referring to the decision in Mammant v. State of Madhya Pradesh and Raja Bai v State of Madhya Pradesh (1952 II MLJ 634) (Cri. App. Nos. 56 and 57 of 1951). The learned Magistrate has extracted the following observations of the Supreme Court : "It is well to remember that in cases where the evidence is of a circumstantial nature the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of the accused. Again, the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but one proposed to be proved. In other words there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused" * . In other words there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused" * . 8.It must be noted that the prosecution seeks to establish the guilt of the accused merely from the fact that the serial numbers found on wrappers and bundles of matches already in the market tallied with some of the numbers found on the bundles of matches recovered from the van and that these bundles have been removed from the factory without a gate-pass. It is on these two main circumstances that the prosecution wants the court to infer that the first accused with the connivance of the 2nd accused tried to effect the sale of the bundles of match boxes without having paid the excise duty thereon, and the second accused abetted the commission of the aforesaid offence by the first accused. But then from the mere fact that the serial numbers found on some wrappers and bundles of matches already in the market tallied with some of the number found on the bundles of matches from the van, it cannot be predicated with any amount of certainty that the bundles of matches found in the van were removed from the factories of the first accused for the purpose of evading the payment of excise duty, especially when it is admitted that the bundles of matches manufactured during the course of one year will be bearing serial numbers starting from 1' and the next year instead of continuing serial Nos., again serial Nos. would be started beginning with number 1' and when there is no evidence as to in which year exactly the bundles and wrappers seized in this case from the market were put into the open market and there is the possibility of those wrapper and bundles being of goods manufactured in a previous year. The fact that there is no gate pass to cover the bundles of matches found being transported in a van also would not go to prove the guilt of the accused, because admittedly gate passes are issued only to the first moving of the manufactured goods from the factory either to the godown or to sales centers. The fact that there is no gate pass to cover the bundles of matches found being transported in a van also would not go to prove the guilt of the accused, because admittedly gate passes are issued only to the first moving of the manufactured goods from the factory either to the godown or to sales centers. Therefore, the conclusion of the learned Magistrate that the evidence adduced is not adequate to prove the guilt of the appellants is justifiable. I therefore find no compelling reasons to differ from the conclusions of the learned Magistrate. 9. An appellate Court will hesitate and feel great reluctance in interfering with the finding of the court below and coming to a different conclusion in appeals from acquittals, and where two reasonable views are possible on the evidence, the appellate court will not interfere with the order of acquittal merely because it would, sitting as a trial court, have taken the other view. It is only where the conclusions of the trial court on the few simple questions of fact which arose before it are so entirely opposed to the weight of evidence that they can justifiably be described as perverse in the technical sense of the term the appellate court would interfere. The Supreme court in Aher Raja Khima v. State of Saurashtra (1956 SC 217) has examined the scope and ambit of powers of High Court in dealing with appeals against acquittals, and it reiterated its previous view that in an appeal against acquittal it is not enough for the High Court to take a different view of the evidence, but there must also be substantial and compelling reasons for holding that the trial court was wrong. In Sheo Swarup v. King Emperor (1934 P. C. 227) the Privy Council observed as follows:- "There is in their opinion no foundation for the view, apparently supported by the judgment of some Courts in India that the High Court has no power or jurisdiction to reverse an order of acquittal on a matter of fact, except in cases in which the lower court has 'obstinately blundered' or has 'through incompetence, stupidity or perversity' reached such 'distorted conclusions as to produce a positive miscarriage of justice, or has in some other way conducted itself as to produce a glaring miscarriage of justice, or has been tricked by the defence so as to produce a similar result. Sections 417, 418, and 423 of the Code of 1898 give to the High Court full power to review at large the evidence upon which the order of acquittal was founded and to reach the conclusion that upon that evidence the order of acquittal should be reversed. No limitation should be placed upon that power, unless it be found expressly stated in the Code. But in exercising the power conferred by the Code and before reaching its conclusions upon fact, the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt; (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge, who had the advantage of seeing the witnesses. To state this, however, is only to say that the High Court, in its conduct of the appeal should and will, act in accordance with the rules and principles well known and recognised in the administration of justice" * .This view of the Privy Council has been affirmed by the Supreme Court in Sanwat Singh v. State of Rajasthan (1961 SC 715) and the Supreme Court summarized the legal position thus : '1. An appellate Court has full powers to review the evidence upon which the order of acquittal is founded. (2) the principles laid down in Sheo Swarup's case, 61 Ind. App. An appellate Court has full powers to review the evidence upon which the order of acquittal is founded. (2) the principles laid down in Sheo Swarup's case, 61 Ind. App. 398 afforded a correct guide for the appellate Court's approach to a case disposing of such an appeal. (3) The different phraseology used in the judgments of this court such as : (A) "Substantial and compelling reasons", (B) "good and sufficiently cogent reasons", (C) "strong reasons" are not intended to curtail the undoubted power of an appellate Court in an appeal against acquittal to review the entire evidence and to come to its own conclusion, but in doing so it should not only consider every matter on record having a bearing on the question of fact and the reasons given by the court below in support of its order of acquittal but should express the reasons in its judgment which led it to hold that the acquittal was not justified.' 10.Bearing these principles in mind, I have analysed the evidence and find that this is not a case in which this Court should interfere with the order of the learned Magistrate, acquitting the accused. Therefore these two appeals are dismissed.