TMI Blog1970 (9) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Customs officers in the early hours of 7-3-1963. The search was carried out by Customs Officers Gogate Chowdhary and others from 4 a.m. onwards. One P. Nair was then found in the flat. While the rear room of this fiat was being searched, a large number of watches kept in wooden or cardboard boxes were found placed in a niche and those watches numbering about 4,513 along with some other luxury goods were seized under a panchnama. No documents pertaining to these watches were found on the premises and none of them was produced by P. Nair either when demanded. The watches were accordingly seized under the reasonable belief that they were smuggled goods. 3.On the same day, the residential premises of this accused were also searched and some files were seized from that place. A statement of this accused was also recorded on the same day under Section 108 of the Customs Act. He then produced photostat copies of five permits and claimed that the goods seized at Gobind Mahal were brought to Bombay under those permits. There further statements of the accused were thereafter recorded on 8-3-1963, 11-3-1963 and 12-3-1963. In those statements also the accused claimed the goods to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toring the same and he could not, under the circumstances, be held answerable for the watches in question. In an attempt to substantiate that defence, he even examined Premabhai Chibabhai as a witness on his behalf. Secondly he contended that in any case the documents available before the Court clearly established that all the watches were lawfully imported at Daman and from there lawfully brought to Bombay under appropriate Collector's Certificates. 7.On a consideration of the evidence before him, the learned Chief Presidency Magistrate did not accept the first contention of the accused and declined to place any reliance on the evidence of Premabhai Chibabhai. With regard to the second contention, he accepted the same in part and the conclusion to which he came was that the accused was guilty under Sections 135(a) and 135(b) only in respect of 63 Buler Watches, 34 Roberta Watches, 2 Roamer Watches, 1 Josmar Watch, 228 Ostara Watches and 44 Mustang Watches, the aggregate number of those watches being 372. While coming to this conclusion, the learned Chief Presidency Magistrate relied on the pro-visions of Section 123 of the Customs Act and proceeded on the view that the burden of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any provision of this Act applicable to those goods, such person shall on conviction before a Magistrate be liable to imprisonment for any term not exceeding two years, or to fine, or to both". Simultaneously with this amendment, one other section was introduced into the statute and that was Section 178A and that section laid down :- "178A (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession that goods were seized. (2) This section shall apply to gold, gold manufactures diamonds and other precious stones, cigarettes and cosmetics and any other goods which the Central Government may by notification in the official Gazette, specify in this behalf. (3) Every notification issued under sub-section (2) shall be laid before both Houses of Parliament as soon as may be after it is issued." 10.While Section 178A was included in Chapter XVII, Section 167(8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeds one lakh of rupees, with imprisonment for a term which may extend to five years and with fine : Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months : (ii) in any other case with imprisonment for a term which may extend to two years, or with fine, or with both. Thus, Section 135 (a) and (b), with which we are concerned, substantially corresponds to Section 167(81) of the old Act. It is no doubt true that while Section 135 is included in Chapter XVI, the heading of which is "Offences and Prosecutions" Section 123 has been included in Chapter XIV, the heading of which is "Confiscation of Goods and Conveyances and Imposition of Penalties", but merely because Section 123 is included in Chapter XIV and not in Chapter XVI, it would hardly be right to confine the operation of Section 123 to adjudication proceedings only contemplated under Sections 111, 112 and 122 of the Customs Act. As observed in Maxwell on the Interpretation of Statutes, Twelfth Edition, at page 11,"While the court is entitled to look at the headings in an Act of Parliament to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that stringent measures, both legal and administrative should be adopted with a view to minimising the scope of this evil." With reference to these observations their Lordships have observed : "The deleterious effects of smuggling as pointed out in the extract from the Report, are real and it is not in dispute that the prevention and eradication of smuggling is a proper and legally attainable objective and that this is sought to be achieved by the relevant law. If therefore for the purpose of achieving the desired objective and to ensure that the intentions of Parliament shall not be defeated a law is enacted which operates somewhat harshly on a small section of the public, taken in conjunction with the position that without a law in that form and with that amplitude smuggling might not be possible of being effectively checked, the question arises whether the law could be held to be violative of the freedom guaranteed by Article 19(1)(f) and (g) as imposing an unreasonable restraint." Considerations like these seem to have prevailed with the legislature when it decided to enact the provisions of Section 178A. In Craises on Statute Law, 1963, Edition, at page 337 it has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ships of the Supreme Court to consider the question about the applicability of Section 178A to a criminal trial, because they were only dealing with a case at the adjudication stage. 13.In Sewpunjanraj I. Ltd. v. Collector of Customs, 1983 (13) E.L.T. 1305 (S.C.) = A.I.R. 1958, Supreme Court 845, to which my attention was drawn on the side of the accused, it has been observed that so far as the confiscation of the goods is concerned, it is a proceeding in rem and the penalty is enforced against the goods whether the offender is known or not known; the order of confiscation under Section 182 of the Sea Customs Act operates directly upon the status of the property, and under Section 184 transfers an absolute title to Government. Therefore in a case where the Customs authorities can proceed only against the goods, there can be no question of applying Section 23 of the Foreign Exchange Regulation Act and the remedy under the Sea Customs Act against the smuggled goods cannot be barred. These observations also do not advance the submission that the operation of Section 178A is confined to adjudication proceedings only. On the side of the accused, special emphasis was sought to be place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef Presidency Magistrate was, I think, sufficiently justified in accepting the claim of the prosecution that the goods in question were seized under the reasonable belief that they were smuggled and were liable for confiscation under the provisions of the Customs Act. Once this reasonable belief is established, the provisions of Section 123 of the Customs Act to come into play and under that section the burden shifts on to the accused to show that the goods were not smuggled goods. 15.But it must be borne in mind that the burden which an accused person is called upon to discharge is not the same as the burden which the prosecution is required to discharge in a criminal trial. As pointed out by Their Lordships of the Supreme Court in Harbhajan Singh v. State of Punjab, A.I.R. 1966 Supreme Court 97, there is concensus of judicial opinion in favour of the view that where the burden of an issue lies upon the accused, he is not required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt that burden is discharged if the accused person succeeds in proving preponderance of probability. This decision has been followed by the Supreme Court in the subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Buler watches bearing No. 1172/30 were brought to Bombay on 21-2-1963. They were out of a total lot of 1,200 Buler watches imported under the Despatches at Exs. 37 and 38 and the invoices at Exs. 37C and 38E, but at the time of seizure the number of Buler watches bearing No. 1172/30 was found to be 145 only. So far as these two types of watches are concerned, the finding of the learned Chief Presidency Magistrate is that all the 1631 Buler watches bearing No. 1057 and all the 145 Buler watches bearing No. 1172/30 were lawfully imported. So far as Buler watches bearing No. 1146/C are concerned, the position is that 500 watches bearing that number were imported under the Despatches at Ex. 39 read with the invoice at Ex. 39A, but out of them only 400 watches were brought to Bombay under the certificates at Exs. 3A and 3C. Under the certificate at Ex. 3A only 300 watches were brought on 2-2-1963 and under the certificate at Ex. 3C 110 more watches were brought. The total number of watches brought under the two certificates was thus 410, but at the time of seizure 470 Buler watches bearing No. 1146/C were seized and the view taken by the learned Chief Presidency Magistrate is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, D.W.3, it no doubt appears that he allowed the clearance of the goods after checking with the invoices and the permits, but it is difficult to accept the submission that the checking with the permits was so meticulous that not a single watch could escape scrutiny. In the very nature of things, it seems to me that examination and inspection of each watch was impossible, except when there was reason to arouse suspicion on receipt of information that some smuggled goods were being carried on the way. It appears that the certificate bearing No. 147(Ex.3A) was issued by the Collector of Daman for the transport of 1800 Buler watches and that number comprised 300 watches described as "R. G. 21 Jewels (Calendar)" and 1500 watches described as "R. G. Chrom. 17 Jewels waterproof" and it is on the basis of this very description that Mr. D'Souza made the endorsement that he had cleared 682 Chromium plated watches, 818 gilted watches and 300 gilted watches with calendar. Merely because 300 watches were described as Calendar, in the endorsement also it was mentioned that 300 calendar watches were being cleared. It would not, I think, be right to read his endorsement as meaning that he had exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re smuggled by this accused. In this connection it is interesting to refer to the invoice at Ex. 38E under which 1,000 Buler watches bearing No. 1172/30 were purchased in the name of one Babulal Chunilal, but when they were actually imported and inspected at the Custom House at Daman, the Despatch at Ex. 38 shows that all the 1,000 watches did not bear No. 1172/30. Only 700 bore that number and the remaining 300 bore No. 1057. That means that even the numbers mentioned in the invoices are not to be taken as being quite conclusive on a point like the one we are dealing with in this case. If in spite of the invoice watches bearing different numbers were actually sent and received at Daman, the possibility of three Buler watches, two bearing No. 55 and the one bearing No. 1967-146, being imported at Daman along with the other Buler watches and the same being thereafter transported to Bombay legitimately under the various certificates, cannot, I think, be ruled out. I am therefore, of the view that even in respect of these three Buler watches also the accused has sufficiently discharged his onus. This conclusion is further supported by the fact that at the time of seizure these watches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficates was written. These 34 watches also were admittedly found in the cartons or boxes in which the remaining lawfully imported Roberta watches were seized. It would not, under the circumstances, be right to discard the accused's explanation that these 34 Roberta watches formed part of the 5,451 Roberta watches lawfully imported at Daman. 22.That takes us to two Roamer watches and one Josmar watch in respect of which the accused has been found guilty by the learned Chief Presidency Magistrate. So far as Roamer watches are concerned, the position that emerges is that in all 1,170 watches of this make were imported as evidenced by the invoice (Ex. Y-9) watches bearing No. 588 and the Despatch at Ex. 45, out of these 1,170, 1,161 watches were transported to Bombay under the certificates at Exs. 1-H, 1-C and 1-E. Out of these 1,161, which came to Bombay on 26-10-1962, 11-1-1963 and 21-2-1963, only 120 watches were available for being seized on 7-3-1963 The view taken by the learned Chief Presidency Magistrate is that 118 out of these 120 were lawfully imported, but the remaining two were not. In taking this view, the learned Chief Presidency Magistrate seems to have been influenced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46, 47 and 48, it seems to have been held that this watch could not possibly have been imported under those Despatches. The learned Chief Presidency Magistrate, I think, has unnecessarily attached too much importance to this number. The point to be noted is that the number 524 mentioned in the invoice at Ex. Y-10 is also present on this watch. The watch is also a watch of Josmar make and the same was found in the entire lot of 239 watches in the original boxes containing Josmar watches. If we examine the inventory at Ex. 'W' the entries at Serial Nos. 215, 216, 217 and 218 leave no doubt that all these watches were in boxes tied in the same bundle bearing No. 17. The entry at serial No. 210 shows that the last but one watch noted against that serial number was one bearing No. 524-10-259 and the last watch with which we are concerned bears No. 524-10-206. One wonders whether "206" was originally as "206". A small discrepancy of this kind need not, in my opinion, be magnified to the extent of rejecting the explanation given by this accused. It may be that this small discrepancy was never noticed by anyone right from the manufacturing stage till the stage of transporting the watches t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at leaves 44 Mustang watches in respect of which the accused has been found guilty. So far as these watches are concerned the position is that 1,000 watches were imported at Daman under the invoice (Ex. 61B) of Helsa Watch Co., but when these watches actually came to Daman and were examined by the Customs officers, it was found that what was actually imported were 1,000 Mustang watches. An endorsement to that effect was accordingly expressly made on the invoice at Ex. 61B under the signature of one Mr. Mascarenhas in the presence of defence witness Pinto. That l,000 Mustang watches were in fact imported under this invoice is further clear from the despatcho at Ex. 61. The whole of that Despatcho was not intact. A part of the lower half seems to have been torn away but even so what is left clearly indicates that this Despatcho bearing No. 40 is mentioned in the rubber stamp of the Customs Authorities appearing on the invoice at Ex. 61B. Even on the back side of the torn Despatcho, the word "Mustang" is clearly visible The face value of the watches mentioned in the invoice is shown as 4,765 Francs and the same value was adopted and mentioned on the Despatcho for the purpose of levyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Collector's certificates at Ex. 3-A, and 3-C. In the certificate at Ex. 3-A there is a mention of 300 Buler Gents watches with 21 Jewels bearing No. 1146/C and of 1,500 Buler watches with 17 Jewels bearing No. 1057. That means that the watches bearing No. 1146-C were supposed to be of 21 Jewels and those bearing No. 1057 were supposed to be of 17 Jewels. All those watches were cleared at the Customs House at Vapi on 2-2-1963 and 21-2-1963. Now if we turn to the certificate at Ex. 3-C what we find is that 286 watches comprising watches bearing Nos. 1146/C and 1057 were allowed to be transported to Bombay and a consolidated description for the entire lot was given in the certificate in which all those watches were described as watches with 17 Jewels. On this occasion also they were cleared at Vapi Custom House on the footing of the description contained in the certificate. More is hardly necessary to be convinced that no attention was ever paid to the number of Jewels while clearing the watches at the Customs Barrier. There is under the circumstance, no justification for rejecting the accused's explanation in respect of the 44 Mustang watches merely because those watches were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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