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TMI Blog1988 (7) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... ious for the firm as well as for the people of Bombay. On that day a warning had been issued by the Weather Office, Bombay, about a possible sea storm that night. The entire activities came to a halt and the public had been advised to rush back to their houses early. On searching the premises of petitioner 3, the Customs Officers found over 2800 carats of rough diamonds and over 400 carats of cut and polished diamonds in addition to a lot of other items of precious stones, pearls, gold manufactures etc. The books of accounts of the firm claimed to be written up-to-date, however, showed a stock of 11.96 carats of cut and polished diamonds and the stock of rough diamonds and other articles was shown as nil. On being asked to produce evidence of legal acquision, import and possession of diamonds, petitioners 1 and 2 showed their inability to produce any such documents. They replied that they had purchased the goods locally through brokers and had already made 50 per cent cash payment. The cash book, however, revealed no such payment nor were any purchase vouchers produced before the officers. When asked to name the brokers, petitioners 1 and 2 stated that the brokers would not come fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oners. The diamonds covered by these `jangad notes' were not found in possession of the firm on the day and these were not seized. The petitioners gave such explanation for the absence of these diamonds dealers which were not found acceptable by the department. A show-cause notice was, thereafter, issued on May 9, 1980 on various persons including the petitioners. By the show-cause notice the petitioners were called upon to explain to the Collector of Customs (Preventive) Bombay, as to why goods mentioned in the notice and the Indian currency of Rs. 1.40 lakhs be not confiscated and the penalty should not be imposed under Section 112 of the Act. The petitioners duly filed a reply on March 5, 1981 stating that the goods seized from their custody were lying with them on approval basis or jangad basis and belonged to various other dealers. 4.The petitioners sought reliance upon affidavits of seven other diamond merchants, jewellers, customers etc. which they filed for the first time along with their reply to show-cause notice after about 15 months of the seizure. The affidavits, however, covered the entire quantity of the goods seized. So far as the diamonds are concerned the affidav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief as contemplated in Section 110 read with Section 123 of the Act, that the diamonds found in the business premises of M/s. Gems Impex Corporation were smuggled goods? Assuming that Section 123 applied and burden of proof was on(2) the appellants, whether the Tribunal should have held that the appellants had discharged this burden by tendering affidavits of persons claiming ownership of the seized diamonds? 7.By this Court's order dated July 15, 1987, it was directed that the reference application pending in the Bombay High Court should stand transferred to the Delhi High Court and be heard along with the writ petition. 8.The High Court by the impugned judgment dated May 16, 1988, from which the appeal was sought to this Court disposed of the writ petition as well as answered the questions. 9.Two contentions were raised before the High Court, namely, (1) there was no material before the Customs Officer to form the reasonable belief that the seized goods were smuggled goods and, hence, the seizure itself was bad in law and, therefore, the provisions of Section 123 of the Act could not be applied and it was for the customs department to prove that the diamonds in question we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Acting Chief Justice, Chadha, J. and Sabharwal, J., who disposed of the matter by the judgment under appeal, found that even a cursory look at the documents was adequate to show that the transactions were of sale and purchase of diamonds in foreign currencies. While the stock in the books showed a balance of 11.96 carats of cut and polished diamonds and nil stock of rough diamonds, the stock found in their possession was much more. In those circumstances the High Court came to a conclusion that there was reasonable belief that the diamonds were smuggled and we cannot say that such conclusion was unwarranted. 14.It was contended before the High Court and repeated before us in support of the petitioners that there was no profit element in smuggling the diamonds and, hence, no presumption should be inferred against the petitioner. There was nothing on record to show that profit element was lacking. Section 123 of the Act itself recognises that diamonds have great potential for smuggling into India and that is why it is mentioned in sub-section (2) of Section 123 of the Act. The onus has been placed on the person from whose possession such articles are acquired. 15.In tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Gujarat v. Mohanlal Jitamalji Porwal [1987 (29) E.L.T. 483 (S.C.) = (1987) 2 SCC 364]. There this Court observed whether or not the officer concerned had seized the article under the "reasonable belief" that the goods were smuggled goods, is not a question on which the court can sit on appeal. The circumstances under which the officer concerned entertains reasonable belief, have to be judged from his experienced eye who is well equipped to interpret the suspicious circumstances and to form a reasonable belief. See also M.A. Rasheed v. State of Kerala [AIR 1974 SC 2249] and Barium Chemicals Ltd. v. Company Law Board [AIR 1967 SC 295]. It must be reiterated that the conclusions arrived at by the fact-finding bodies, the Tribunal or the statutory authorities, on the facts, found that cumulative effect or preponderance of evidence cannot be interfered with where the fact-finding body or authority has acted reasonably upon the view which can be taken by any reasonable man, courts will be reluctant to interfere in such a situation. Where, however, the conclusions of the fact-finding authority are based on no evidence then the question of law arises and that may be looked into b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as rightly rejected by the customs and the High Court held it properly that the petitioners has not discharged the onus to prove that the goods were not smuggled. 19.In this case there was no denial of opportunity, the proceedings followed excluded the possibility of denial of opportunity. The proceedings taken were in order and in consonance with natural justice. The High Court was right in answering the first question by saying that the Tribunal was justified in holding that the seizing Customs Officer had adequate material to form a reasonable belief as contemplated under Section 110 read with Section 123 of the Act and it rightly held that the appellants had failed to discharge the onus. The High Court answered the second question in the negative. In our opinion, the High Court was right. 20.There is, however, one aspect of the matter which was emphasised before us, i.e., that the conclusions of the fact-finding body or statutory authority must be arrived at after giving a fair opportunity to the party to be affected by the order to be passed. As has been reiterated by a Bench decision of the Calcutta High Court in Bal Kissen Kejriwal v. Collector of Customs [AIR 1962 Cal 460 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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