TMI Blog1988 (7) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... tween these materials and the formation of the belief that the goods are liable to confiscation. In the light of the above Section 110 read with Section 123 has been fully complied with. The High Court correctly found that by filing the affidavits in this case, the burden had not been discharged. The facts that the affidavits had been filed long afterwards and the names of the parties were not disclosed at the time of search, warrant rejection of the affidavits. These were filed after a gap of 15 months and the same were examined minutely. The facts and figures given were checked up and the credibility of the deponents as well as the credence of their version examined. Furthermore, the affidavits must be looked at in the background that those persons who claim that they had given these diamonds on approval basis, made no claim for all these diamonds. Appeal dismissed. - 7799 of 1988 - - - Dated:- 22-7-1988 - Sabyasachi Mukharji and S. Ranganathan, JJ. [Judgment per : Sabyasachi Mukharji, J.]. — This is an application under Article 136 of the Constitution for leave to appeal against the judgment and order of the Division Bench of the High Court of Delhi, dated May 16, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough diamonds in all valued at Rs. 54,42,882.02 under Section 110 of the Act on the reasonable belief that the goods had been smuggled into India. They also seized Indian currency of Rs. 1.40 lakhs and some other incriminating documents found in the premises. The only question agitated before the High Court was regarding cut and polished diamonds and rough diamonds. In view of the climatic conditions the goods and the documents seized were put in two cartons in the presence of witnesses and the cartons were sealed with the customs' seal and also with the seal provided by petitioners 1 and 2 and the signatures were also put on the label of the cartons. A detailed itemwise inventory of the seized goods and documents was prepared in the Customs House, Bombay, later on November 20, 21 and 22, 1979. Petitioners 1 and 2 were asked by the department to attend preparation of the detailed itemwise inventories but they did not attend, rather petitioner 1 replied that the job could be carried out even in his absence. Petitioners 1 and 2 were examined and their statements recorded under Section 108 of the Act. 3.In his statement recorded on November 29, 1979 Ramchand Udhavdas Bharvani gave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms by his order dated April 17, 1982 directed release of jewellery but ordered absolute confiscation of various other goods including the diamonds in question and also imposed a penalty of Rs. 65 lakhs on the petitioners under Section 112 of the Act. A penalty of Rs. 25 lakhs each was imposed on the firm and petitioner 1 and a penalty of Rs. 15 lakhs was imposed on petitioner 2. Aggrieved thereby, the parties appealed to the Collector of Customs under Section 128 of the Act but the same was dismissed. The Customs and Excise and Gold (Control) Appellate Tribunal by its order dated January 17, 1984 confirmed the order of confiscation in respect of both the diamonds. The Tribunal held that seizure of diamonds was in the reasonable belief that these were smuggled goods and consequently the onus of proof, according to Section 123 of the Act, was on the petitioners and they had failed to discharge it in respect of the seized diamonds. The Tribunal, however, ordered the release of Indian currency of Rs. 1.40 lakhs and of all the confiscated goods except the diamonds. The penalty on petitioner 1 was reduced to Rs. 10 lakhs and on the petitioner 2 and the firm, it was reduced to Rs. 5 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Section 110(1) of the Act which deals with seizure of goods, documents and things, provides as follows : If the proper officer has reason to believe that any goods(1) are liable to confiscation under this Act, he may seize such goods : Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. 11.Section 123 which deals with onus of proof provides as follows : Whether any goods to which this section applies are seized(1) under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be — in a case where such seizure is made from the possession of(a) any person, — on the person from whose possession the goods were seized;(i) and if any person, other than the person from whose possession(ii) the goods were seized, claims to be the owner thereof, also on such other person; in any other case, on the person, if any, who claims to be(b) the owner of the goods seized. This section shall apply to gold, diamo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the income tax department. The Customs Officer did not wait for the accountant to arrive to explain the entries in the books of account to him and seized the goods which in the search list were described as `appearing to be diamonds'. Due to these facts the learned Single Judge held that it was not a case of reasonable belief but only a case of suspicion. In the instant case, as per the High Court's order, the customs department had definite secret information. Despite petitioner's assertion that the books of accounts were written up-to-date it showed a stock of only 11.96 carats of cut and polished diamonds and that of rough diamonds and other articles as nil, the diamonds actually found on search were over 2800 carats of rough diamonds and over 400 carats of cut and polished diamonds apart from various other precious stones etc. On being asked to produce evidence of legal acquisition, the petitioners expressed their inability. There was good ground accompanied by rational nexus leading to formation of the belief that the goods were smuggled. Furthermore, the petitioners stated that they had purchased the goods locally through the brokers and had already made 50 per cent cash p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act. The question whether it was under the reasonable belief or not, was a justifiable one. The facts of this case certainly warrant the formation of belief. In any case, once it is held that there was material relevant and germane, the sufficiency of the material is not open to judicial review. 17.The other contention urged on behalf of the petitioners was that the burden that lay upon the petitioners had been fully discharged to show that the goods are not smuggled. The High Court on an analysis of the facts found that the onus was not duly discharged and held that though the burden on the petitioners was not as high as on the prosecution but there must be preponderance of probabilities. The High Court found that by filing the affidavits in this case, the burden had not been discharged. We are in agreement with the High Court. The facts that the affidavits had been filed long afterwards and the names of the parties were not disclosed at the time of search, warrant rejection of the affidavits. These were filed after a gap of 15 months and the same were examined minutely. The facts and figures given were checked up and the credibility of the deponents as well as the credenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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