Strict proof of statutory ingredients required to sustain conviction under Customs and foreign exchange penal provisions.

Penal liability under the Customs Act and Foreign Exchange Regulation Act depends on strict proof of the statutory ingredients. The Supreme Court held that, on the facts found, the ingredients of Section 135(1)(a) of the Customs Act, 1962 were not satisfied despite the valuation of the goods brought from Sri Lanka, and the conviction could not be sustained. It also held that Section 13(1) of the Foreign Exchange Regulation Act, 1973 did not apply because the case did not involve gold, silver, precious stones or foreign currency brought from abroad. The conviction was therefore unsustainable and the reversal of acquittal was set aside.

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Issues: Whether the conviction under Section 135(1)(a)(i) of the Customs Act, 1962 read with Section 13(1) of the Foreign Exchange Regulation Act, 1973 was sustainable on the facts found.

Analysis: The undisputed valuation of the goods brought from Sri Lanka was noted, but the Court held that the ingredients of Section 135(1)(a) of the Customs Act, 1962 were not satisfied. It further held that the conviction under Section 13(1) of the Foreign Exchange Regulation Act, 1973 could not stand because the case did not involve the kind of goods required to attract that provision, namely gold, silver, precious stones or foreign currency brought from abroad.

Conclusion: The conviction was held unsustainable and the reversal of acquittal was set aside in favour of the appellant.

Ratio Decidendi: Penal provisions under the Customs Act and Foreign Exchange Regulation Act are not attracted unless the proved facts satisfy their essential statutory ingredients.

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