1984 (5) TMI 43 - HC - Customs

Detention Order Quashed Due to Lack of Proper Judgment & Inadequate Investigation

The court quashed the detention order against the petitioner, citing that it was based on a rebuttable presumption without allowing the petitioner a ... Detention order not legal if passed in a casual and mechanical manner Issues Involved:1. Legality of the detention order based on a rebuttable presumption under Section 11M of the Customs Act.2. Adequacy of the investigation and evidence used to justify the detention.3. Subjective satisfaction of the detaining authority.Issue-wise Detailed Analysis:1. Legality of the detention order based on a rebuttable presumption under Section 11M of the Customs Act:The detention order dated 23rd September 1983 was issued under Section 3 of the COFEPOSA Act to prevent the petitioner from smuggling and abetting the smuggling of silver. The primary ground for detention was the presumption under Section 11M of the Customs Act that the petitioner had illegally exported or abetted the export of silver, based on the discovery of silver packets marked with NIBR, which were similar to those the petitioner had purchased from M/s. Beam Corporation. Section 11M states that if the purchaser or transferee is not traceable or is fictitious, it shall be presumed that the goods have been illegally exported unless proven otherwise. The court noted that this presumption is rebuttable and that the petitioner should have been given a fair opportunity to rebut it. The court found it impermissible to base a detention order solely on such a rebuttable presumption without affording the petitioner an opportunity to disprove it.2. Adequacy of the investigation and evidence used to justify the detention:The investigation began on 14th May 1983 when officers of the Directorate of Revenue Intelligence intercepted a car and found silver bullion packages. The investigation traced the ownership of some silver to the petitioner, who had purchased silver from M/s. Beam Corporation. However, the investigation revealed discrepancies, such as the non-existence of certain parties to whom the petitioner claimed to have sold the silver and the denial of transactions by others. Despite the petitioner's offer to prove the existence of these parties, the investigation ignored his offer. Furthermore, the purity tests of the silver samples did not match the expected 999 purity, and there were differences in weight. The court criticized the investigation for being incomplete and for not addressing the ownership of the other 88 packets of silver found in the garage. The court concluded that the investigation was inadequate and did not justify the detention.3. Subjective satisfaction of the detaining authority:The court emphasized that the subjective satisfaction of the detaining authority is not immune from judicial scrutiny. The detaining authority must apply its mind to the material facts and form a reasonable and prudent judgment. In this case, the court found that the detaining authority acted in a casual and mechanical manner, relying on non-existent material and failing to consider significant discrepancies and gaps in the investigation. The court noted that the detaining authority did not adequately address the petitioner's offer to identify the non-existent parties or the differences in the purity and weight of the silver. The court concluded that the detention order was based on non-existent material and lacked the necessary objectivity and discretion, rendering it invalid.Conclusion:The court quashed the detention order against the petitioner, finding that it was based on a rebuttable presumption without giving the petitioner an opportunity to rebut it, and that the investigation was inadequate and the detaining authority acted in a mechanical manner without proper consideration of the facts. The petitioner was ordered to be released forthwith.