Customs Act presumption and proof rules sustained liability for possession of confiscable gold and silver bars.

Possession of gold and silver bars seized from a house, once proved, triggered the Customs Act presumption of culpable mental state under Section 138A, and that presumption was not rebutted by admissible evidence; liability under Section 135(1)(b) was therefore sustained. Statements recorded under Section 108 could not be used as substantive evidence in the respondent's favour where the maker was not examined and the requirements of Section 138B were not met, and unproved receipts or statements were insufficient to displace the prosecution case. The acquittal under Section 135(1)(a) was maintained, and objections to sanction and the charge were rejected because no failure of justice was shown.

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Issues: (i) whether the seizure of gold and silver bars from the respondent's house and the statutory presumption under the Customs Act established liability under Section 135(1)(b); (ii) whether the statements recorded under Section 108 of the Customs Act and the other unproved receipts/statements could be relied upon in the respondent's favour; (iii) whether the acquittal under Section 135(1)(a) and the challenge to the sanction and charge were sustainable.

Issue (i): whether the seizure of gold and silver bars from the respondent's house and the statutory presumption under the Customs Act established liability under Section 135(1)(b)

Analysis: The seizure of the gold and silver bars from the respondent's house was held to be proved, and the respondent did not effectively dispute possession of those articles. Once possession was established, the presumption of culpable mental state under Section 138A of the Customs Act operated against the respondent. The respondent did not rebut that presumption by acceptable evidence. The Court also held that the goods were liable to confiscation and that possession of such goods, coupled with the unrebutted presumption of knowledge, attracted Section 135(1)(b).

Conclusion: Liability under Section 135(1)(b) of the Customs Act was established, and the conviction on that count was held sustainable.

Issue (ii): whether the statements recorded under Section 108 of the Customs Act and the other unproved receipts/statements could be relied upon in the respondent's favour

Analysis: The statement of the third party recorded under Section 108 of the Customs Act was held not to be admissible as substantive evidence because the maker was not examined and the conditions under Section 138B were not satisfied. The respondent's own statement under Section 108 could not be used by him in his favour, and the alleged receipts and statements from other persons were also not proved through admissible evidence. The Court further drew an adverse inference from the non-examination of the persons who were said to have handed over the articles and from the failure to produce reliable evidence that the seized goods had suffered customs duty.

Conclusion: The respondent could not rely on those statements or receipts to rebut the prosecution case.

Issue (iii): whether the acquittal under Section 135(1)(a) and the challenge to the sanction and charge were sustainable

Analysis: The Court held that the prosecution facts did not justify conviction under Section 135(1)(a), and the acquittal on that count was maintained. The objections to sanction and the charge were rejected because the sanction order reflected application of mind and the alleged defects in the charge had not occasioned any failure of justice. The Court therefore interfered with the acquittal only to the extent of Section 135(1)(b), while leaving the acquittal under Section 135(1)(a) undisturbed.

Conclusion: The acquittal under Section 135(1)(a) was confirmed, and the objections to sanction and charge were rejected.

Final Conclusion: The appeal resulted in a partial reversal of the acquittal, with conviction and sentence sustained only for the offence relating to possession of goods known or believed to be liable to confiscation, while the other count remained dismissed.

Ratio Decidendi: In a prosecution under the Customs Act, once possession of confiscable goods is proved, the presumption of culpable mental state applies and must be rebutted by the accused through admissible evidence; unexamined statements recorded under Section 108 cannot be treated as substantive evidence in the accused's favour unless the statutory conditions for relevancy are satisfied.

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