TMI Blog1986 (4) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... they were seized under S.110 of the Customs Act, 1962 (hereinafter the Act, for short) in a proper Panchnama in the reasonable belief that they had been illicitly imported into India and have been acquired or transported by the appellant in contravention of the provisions of S. 3(1) of the Imports Exports (Control) Act, 1947, read with S. 11 of the Act; (v) in his written statement on that day the appellant voluntarily confessed the recovery, ownership, possession, control and transportation of the stones in question and disclosed that the emeralds were of South African origin and the Rubies and the Blue Saffires were from Burma. He further stated that he purchased them from different persons at different times. The stones were cut and polished at Khambat. He had, however, no voucher bill or any other documentary evidence to establish the legal import of the said stones and their lawful acquisition or possession; (vi) accordingly it would appear that the aforesaid stones were all imported into India through an unauthorised route in contravention of the aforesaid provisions and are accordingly liable to confiscation under S. 111 of the Act; (vii) further, it would appear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s produced during the course of the hearing were unreliable, since the appellant had not referred to them earlier in his reply to the notice to show cause. They did not bear any serial number, nor do they appear to be either credit memos or cash memos; (ii) on the contrary the appellant in his original statement himself had categorically stated that the stones in question were from South Africa and Burma and that he had got no voucher whatsoever about the purchase of the goods; (iii) accordingly, it is proved beyond doubt that the stones in question were of foreign origin and are, therefore, confiscated absolutely under S. 111 of the Act. He also imposed a penalty of Rs. 5,000/- on the appellant; (d) in appeal it was held that the foreign origin of the stones is not in dispute. There is accordingly no satisfactory evidence regarding their licit import. The order or adjudication was accordingly confirmed, but the penalty was reduced to Rs. 1,000/-. (e) the instant appeal is the sequel. 2. It was urged in the course of arguments before me, inter alia, that - (a) admittedly, the goods were not covered under S. 123, or Chapter IV-A of the Act. Consequently, the burden was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f of other relevant facts from which the fact in issue may be inferred. While in criminal proceedings the persuasion of the guilt must amount to such a moral certainty as convinces a tribunal beyond all reasonable doubt, in civil matters, a mere preponderance of probability is sufficient, and the benefit of every reasonable doubt need not necessarily go to the Defendant. In quasi-criminal cases, prima facie doubt is sufficient to shift the onus to the assessee or accused [AIR 1949 Madras 116 - In Narasinga Muthu Chettiar]. There is an essential difference between burden of proof as a matter of law and pleading and as a matter of adducing evidence. The burden in the former sense is upon the party who invites a decision on the existence of certain facts which he asserts. That burden is constant and never shifts. But the burden to prove in the sense of adducing evidence (onus of proof) shifts from time to time having regard to the evidence adduced by one party or the other or the inferences that could be drawn from circumstantial evidence or the presumption of fact or law raised in favour of the one or the other. Such shifting of the onus is a continuous process in the evaluation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the aforesaid cases were quasi-criminal in nature being departmental proceedings, the remaining three were prosecutions launched in criminal courts. While, therefore, as discussed supra, preponderance of probabilities is sufficient and the benefit of every reasonable doubt need not necessarily go to the Defendant in the first three, the accused is entitled to the benefit of any doubt whatsoever in the last three. Again, in the first three, prima facie proof as distinguished from proof beyond reasonable doubt is sufficient to shift the onus to the assessee or the accused. Even so, in my opinion, the application of the more exacting standards of proof in a criminal proceeding to the facts of the instant case will still result in a decision against the present appellant. (e) In the Tribunal as well, we have precedents in 1983 (12) E.L.T. 849 (Arjan Das Kabadi v. Collector of Central Excise, Jaipur); 1984 (16) E.L.T. 257 [Betha Pydiraju v. Collector of Central Excise, Guntur], (f) It is axiomatic in the consideration of precedents that - (i) the ratio of the decision is of the essence and not every observation found therein or what follows logically from such observations [(196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble Supreme Court had held that although the burden was on the Customs authorities, they had discharged that burden by falsifying in many particulars the story put forward by the appellant. Equally a false denial could be relied upon by the Customs authorities for the purpose of coming to the conclusion that the goods had been illegally imported. (c) In AIR 1974 S.C. 859 (Boormal s case) - (i) eight items of goods were discovered, ready packed for dispatch. Out of them, the import of four items was totally banned, while the remaining five could not be imported after 1960 save under a licence underS.3(l) of the Imports and Exports Control Order, 1947 [Para 8 of the judgment]; (ii) S. 178A of the Sea Customs Act (= S. 123 of the Act) did not apply to the proceedings; (iii) the goods were all of foreign origin; (iv) they were not lying exhibited for sale; (v) Baboothmul from whose custody the goods were recovered disclaimed after ownership and furnished an improbable explanation of the acquisition of possession. At first it was some unknown broker that left them outside the shop. Five days later, he came out with the version that one Bhoormull had left them there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the accused, it is not obliged to prove them as part of its primary burden; [Para 31 of the report] (v) smuggling is a clandestine conveyance of goods to avoid payment of duties. Many facts relating to this illicit business remain in the special or peculiar knowledge of the person concerned in it. The burden to establish those facts, in terms of the principle contained in S. 106 of the Evidence Act, is cast on the person concerned in it and if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution would rebut the initial presumption of innocence and in the result prove him guilty. The (intial) burden on the prosecution may even be considerably lightened by presumptions of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of the fact in issue. It will only alleviate the burden to discharge which very slight evidence may suffice; [Para 33 of the report] (vi) it is not correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question were imported without licence and in contravention of the provisions of the Import Control Order issued under S.3(2) of the Imports and Exports (Control) Act, 1947. The appellant was prosecuted for offences punishable under S. 135(a) and (b) of the Act; (vi) the accused/appellant denied being in possession of the offending goods and his explanation was disbelieved. The production of the key (despite initial refusal) proved his exclusive possession of the locked portion of the room with all that was contained therein. Not merely that, there is no doubt that he knew the incriminating nature of the contents of the packages. His case rested on his bare assertion. Although no one came forward to state or allege that the goods were imported without payment of duty and notwithstanding the inapplicability of S.123 of the Act, still the appellant had not produced evidence to show that the goods were legally brought into India; (vii) it was contended before the Hon ble Supreme Court that it was necessary for the prosecution to prove that the goods were smuggled and the appellant was dealing with them knowing them to be smuggled. Mere possession does not enable application of S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was for the accused to show that it was brought to India with the permission of the Reserve Bank. The existence of this fact, namely, its import with or without the necessary permission of the Reserve Bank, was entirely a matter within the peculiar knowledge of the accused. It was, therefore, for the accused to rebut the inference which arose under S.114 of the Evidence Act from the surrounding circumstances of the case that it was contraband gold smuggled into India. Once it is held that the accused was in conscious possession or keeping of this smuggled gold it would follow as a necessary corollary therefrom that he had the requisite mens rea. 7. Can it be said in the facts and circumstances of the instant case that - (a) the burden on the Respondent to prove the goods to be smuggled was not discharged or the onus was wrongly placed on the appellant to prove their licit importation/acquisition/possession, or (b) there was no evidence on record to prove the seized goods were smuggled or imported in contravention of the law and as such liable to confiscation, or (c) the requisite knowledge for the levy of penalty was not proved, in the light of the ratio of the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge that burden. This was sufficient to indicate not merely that they were smuggled, again in terms of the aforesaid decisions, but the appellant s consciousness of their smuggled character as well as the mens rea requisite in terms of S.112 of the Act for the levy of a penalty. 9. This was the purport of our decision in 1983 (12) E.L.T. 849 (Arjan Das Kabbadi v. Collector of Central Excise, Jaipur) and it was unfortunate that the attention of our Brothers had not been drawn either to the decisions of the Hon ble Supreme Court or our own when they decided Appeal Nos. 315/83-NRB or 226/83-NRB. Nor was the attention of the Tribunal invited to the decisions of the Supreme Court in 1984 ECR 2296 = 1985 (22) E.L.T. 186 (Tribunal) or 1983 ECR 344. Similarly, the aforesaid decisions of the Supreme Court do not appear to have been cited in 1984 (15) E.L.T. 400;- 1984 (15) E.L.T. 91; 1986 (23) E.L.T. 152; 1985 (21) E.L.T. 521; 1983 (11 12) E.L.T. 1715. This is apart from the fact that some of those decisions like e.g. 1984 (15) E.L.T. 400 and 1983 E.L.T. 1715 were more concerned with the existence of a reasonable belief for effecting seizure under S.110 of the Act. The decision in 1983 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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