Circumstantial evidence and adverse inference sustained customs conviction despite absence of statutory presumption

Foreign-marked gold biscuits found concealed in the accused's safe, together with his admission that the gold had come from outside India and that he had no permit to import or retain it, were sufficient to establish guilty knowledge by circumstantial evidence. The Court held that the accused's refusal to disclose the source and his unsatisfactory explanation justified an adverse inference under Sections 106 and 114 of the Evidence Act, and that the absence of the Section 123 Customs presumption did not defeat the prosecution where the proved facts showed the gold was liable to confiscation under Section 111. The conviction under Section 135(b)(ii) of the Customs Act was upheld and the request for sentence reduction was rejected.

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Issues: Whether the conviction under Section 135(b)(ii) of the Customs Act, 1962 could be sustained on circumstantial evidence and the accused's admissions, notwithstanding the ailability of the statutory presumption under Section 123 of the Customs Act, 1962.

Analysis: Gold biscuits bearing foreign markings were recovered from a secret chamber in the accused's safe. The accused admitted that the gold had come from outside the country and that he had no permit to import or keep it, but he refused to disclose the source. In these circumstances, the facts as to acquisition and import were within his special knowledge, and the Court held that the combined effect of Sections 106 and 114 of the Indian Evidence Act, 1872 permitted an adverse inference from his silence and unsatisfactory explanation. The absence of the Section 123 presumption did not defeat the prosecution where the proved circumstances were sufficient to show that the accused knew the gold was liable to confiscation under Section 111 of the Customs Act, 1962.

Conclusion: The conviction under Section 135(b)(ii) of the Customs Act, 1962 was upheld and the plea for reduction of sentence was rejected.

Ratio Decidendi: Where foreign-marked gold is found concealed in the accused's possession and the accused gives an unsatisfactory explanation for its source, the prosecution may establish guilty knowledge by circumstantial evidence and by drawing permissible inferences under Sections 106 and 114 of the Indian Evidence Act, 1872, even without the benefit of the statutory presumption under Section 123 of the Customs Act, 1962.

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