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TMI Blog1974 (4) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... to the owner or the contents of the packages. 2. After getting a consent letter from Baboothmull the officer opened the packages which contained these articles of the total value of Rs. 12,255/-. 1. Parker Fountain Pens (19 made in Canada) 28 Doz. 3,360-00 Rs. 2. Master Hair Clippers made in Germany 5 Doz. 600-00 Rs. 3. Oster Hair Clippers made in Germany 3 1/2Doz. 400-00 Rs. 4. Venus Pencils made in England 760 Doz. 2,250-00 Rs. 5. K. 55 Out Thread Razors made in Germany 68 Doz. 4,080-00 Rs. 6. Nylon Buttons made in Japan 47 Gross. 705-00 Rs. 7. Gillette Razor Blades made in England 1000 Pcs. 120-00 Rs. 8. 7 O'clock Razor sets made in England 12 Doz. 730-00 Rs. _______________ 12,255-00 Rs. 3. The Officers seized these goods under a mahazarnama. 4. On June 9, 1962, a letter was addressed by the said Baboothmull to the Collector of Customs, informing that on that date, the owner of the packages, one Mr. D. Bhoormull turned up to claim the goods; that his other partner was absent at the time of the seizure of the goods who knew about this affair and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trol Authorities under Section 19 of the Sea Customs Act read with Section 3(1) of the Imports and Exports Control Act, 1947. 9. The Assistant Collector of Customs on October 26, 1962 issued a notice to Bhoormull through his Solicitors, M/s. Gagrat & Co., Bombay requiring him to produce evidence of bona fide acquisition of the goods in question failing which to show cause within a week as to why those goods valued at Rs. 12,255/- be not confiscated under Section 167(8) of the Sea Customs Act read with Section 3(2), Imports and Exports Control Act, 1947. It was added that in case no reply was received within the specified period the case would be decided ex parte on the basis of the facts already on record without further reference to him. 10. In reply, a letter, dated December 13, 1962, was written by the Solicitors in which, it was inter alia stated that on June 4, 1962, at Madras, the goods, being Items 2 and 4 to 8, were purchased by their client from Broker Ram Lal for a total price of Rs. 10,675/-, and those shown as Items 1 and 3, from Broker Shanthi Lal for a sum of Rs. 4,872/- and that these brokers had not issued any bills or receipts regarding those goods. Any further p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a highly restricted quota-basis till October 1959/March 1960. Policy period, when their import too was banned. (ii) The highly suspicious circumstances of the seizure and the dubious conduct of the parties in relation thereto : (a) This large number of goods, all of foreign origin worth over Rs. 12,000/-, were found fully packed and ready for despatch. (b) Baboothmull from whose possession they were seized gave conflicting and evasive explanations in regard thereto. At the time of seizure on June 4, 1962, he disclaimed all knowledge about the ownership and contents of those packages, and said they were left outside the shop by a broker whom he could not identify. Some days later, he "appeared in the arena (garb 7) of an anonymous (fictitious?) person, one Bhoormull". (c) It was eight days after the seizure that one Bhoormull by a letter claimed ownership of the goods, and Baboothmull, also confirmed this. "This Bhoormull the alleged owner of the goods has never been seen. Even at the personal hearing a representative from him came ............ All the correspondence was exchanged with the firm of Solicitors, namely M/s. Gagrat & Co. of Bombay." (d) Despite repeated requisitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. 20. Section 167 of the Sea Customs Act provides for offences punishable to the extent mentioned in the 3rd column of the Schedule appended to that Section. Clause (8) of that Schedule provides that if any goods the importation or exportation of which is for the time being prohibited or restricted by order under Chapter IV of this Act be imported into or exported from India contrary to such prohibition or restriction, then (i) such goods "shall be liable to confiscation, and (ii) any person concerned in any such offence shall be liable to a penalty not exceeding three times of the value of the goods, or not exceeding 1000 rupees". 21. Section 171A specifically empowers the Customs Officers employed in the prevention of smuggling to summon any person whose attendance he considers necessary either to give evidence or to produce a document or thing in an enquiry in connection with the smuggling of any goods and such person shall be bound to state the truth and produce that document or thing and would be liable to prosecution if he made a false statement. 22. A reading of Section 167(8) and the related provisions indicates that proceedings for confiscation of contraband goods ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been lawfully imported etc., then the burden of proof shall lie upon the other party to the proceeding. In India Parliament inserted Section 178A by the Amending Act 10 of 1957, but it did not in its wisdom, go as far as Section 290(2) of the English Act. Section 178A in terms applies to "gold, gold manufacture, diamonds and other precious stones, cigarettes and cosmetics". With regard to these specified goods if seized under this Act in the reasonable belief that they are smuggled goods, the burden of proof that they are not such goods shall be on the person from whose possession, they are seized. But with regard to any other goods, the rule in sub-section (1) of Section 178A would not apply unless the Central Government had specifically applied the same by notification in the Official Gazette. It is common ground that at the material time, no such notification applying the Section to the categories of the goods in question had been issued. In respect of such goods the provisions of the Evidence Act and the Code of Criminal Procedure, do not, in terms, govern the onus of proof in proceeding under Section 167(8) of the Act. In conducting these penal proceedings, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction under Article 226 was not competent to go into the question of the adequacy of that evidence, and act as if it was a court of appeal. 29. Mr. Ramamurthi, learned Counsel for the Respondent, contends in reply, that all proceedings were conducted by the Collector on the assumption that Bhoormull was the claimant or the supposed owner of the goods; that at no stage, before the High Court an objection was taken that he had no locus standi to maintain the writ petition, because he had no interest in the confiscated goods, and consequently this objection should not be entertained for the first time in this Court. Learned Counsel further submits that proceedings of confiscation being penal in nature, the burden was on the Department to show by cogent and convincing evidence that the goods had been illicitly imported into India and that no part of this burden could be shifted to the person claiming the goods. It is emphasised that in the present case, no evidence whatever was produced by the Department to show that the goods in question were smuggled goods. The Collector's order proceeds the argument calling upon Bhoormull to prove that he had purchased these goods in the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department to unravel every link of the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the person concerned in it. On the principle underlying Section 106, Evidence Act, the burden to establish those facts is cast on the person concerned : 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 or the Department would rebut the initial presumption of innocence in favour of that person, and in the result prove him guilty. As pointed out by Best in `Law if Evidence' (12th Edn. Article 320, page 291), the "presumption of innocence is, no doubt, presumptio juris : but every day's practice shows that it may be successfully encountered by the presumption of guilt arising from the recent (unexplained) possession of stolen property," though the latter is only a presumption of fact. Thus the burden on the prosecution or the Department may be considerably lightened even by such presumption of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause of the shop. Baboothmull from whose apparent custody or physical possession, they were seized disclaimed not only their ownership but also all knowledge about the contents of the packages. He could not give a satisfactory account as to how those packages came into his shop. At first, he said that some next-door unknown broker had left them outside his shop. Some days later, he came out with another version viz. that one Bhoormull had left them there. Eight days after, one mysterious person who gave out his name as Bhoormull laid claim to these goods. Despite repeated requisitions Bhoormull did not furnish any information regarding the source of the alleged acquisition of the goods. He never appeared personally before the Collector. He remained behind the scenes. He did not give addresses or sufficient particulars of the brokers who had allegedly sold the goods to him on the 3rd June. Whatever cryptic information was given by him, was also conflicting. Despite two show-cause notices, Bhoormull intransigently refused to disclose any further information. Apart from making a bare claim, he did not furnish evidence of his ownership or even juridical possession of the goods. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed the petition. The same argument was advanced before his Court in appeal by special leave. This Court also negatived this contention. While conceding that there was no direct evidence that the gold had been smuggled after March 1947, it was held that a finding to that effect could be reached by referring to "the conduct of the appellant in connection with (a) the credibility of the story about the purchase of this gold from three parties, (b) the price at which the gold was stated to have been purchased which was less than the market price and (c) the hurry exhibited in trying to get the gold melted at the refinery with a small bit of silver added so as to reduce the fineness of the gold and thus approximate the resultant product to licit gold found in the market". 38. This rule in Issardas Daulat Ram's case, (1962) Supp. (1) SCR 358 was reiterated with amplification in M/s. Kanungo & Co's. case, AIR 1972 SC 1236 = 1983 E.L.T. 1284 (supra). Therein, the appellant was a firm carrying on business as dealer, importer and repairer of watches. On a search of the firm's premises on October 17, 1959, the Customs authorities seized 390 watches out of which 250 were confiscated on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Authorities which they discharged by falsifying in many particulars the story put forward by the appellant............... It cannot be disputed that a false denial could be relied on by the Customs Authorities for the purpose of coming to the conclusion that the goods had been illegally imported." 40. In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector. There was no violation of the rules of natural justice. The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods, by disclosing facts within his special knowledge. 41. Amba Lal's case, (1961) 1 SCR 933 = 1983 E.L.T. 1284 (supra) strongly relied upon by Mr. Ramamurthi, is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished the charge that he was either the thief or had received those stolen goods knowing them to be stolen. If his possession was innocent and lacked the requisite incriminating knowledge, then it will be for him to explain or establish those facts within his peculiar knowledge, failing which the prosecution will be entitled to take advantage of the presumption of fact arising against him, in discharging its burden of proof. 44. These fundamental principles, shorn of technicalities, as we have discussed earlier, apply only in a broad and pragmatic way to proceedings under Section 167(8) of the Act. The broad effect of the application of the basic principle underlying Section 106,. Evidence Act to cases under Section 167(8) of the Act, is that the Department would be deemed to have discharged its burden if it adduces only so much evidence, circumstantial or direct, as is sufficient, to raise a presumption in its favour with regard to the existence of the fact sought to be proved. Amba Lal's case, (1961) 1 SCR 933 = 1983 E.L.T. 1321, was a case of no evidence. The only circumstantial evidence viz. the conduct of Amba Lal in making conflicting statements, could not be taken into ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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