1987 (3) TMI 111 - SC - Customs

Coating pure gold to resemble silver amounts to deception, justifies treating item as smuggled under Section 391 Cr.P.C.

SC held that coating a pure gold waistchain to resemble silver furnished reasonable grounds to treat it as smuggled and justified invoking Section 391 ... Reasonable belief of customs officer for seizure - presumption under Section 123 of the Customs Act relating to smuggled goods - burden of proof shifted under customs presumption - coating with mercury as evidence of attempt to evade law - distinction between ornament and primary gold in seizure cases - admission of additional evidence under Section 391 Cr.P.C.Reasonable belief of customs officer for seizure - presumption under Section 123 of the Customs Act relating to smuggled goods - burden of proof shifted under customs presumption - coating with mercury as evidence of attempt to evade law - Validity of the Superintendent of Customs' reasonable belief under Section 123 and the consequent raising of statutory presumption shifting burden of proof - HELD THAT: - The Court held that the acceptance of the Superintendent of Customs' testimony that he entertained a reasonable belief that the article was smuggled was binding and not open to re-examination on appeal. The officer had identified specific circumstances - prior information and surveillance, the chain being coated with mercury to appear as silver, and the goldsmith's opinion that it was pure gold of specified fineness - which were sufficient to justify his reasonable belief. The statutory presumption under Section 123 consequently shifted the evidential burden onto the person from whom the article was seized. The High Court's contrary conclusion was characterised as unreasonable and inconsistent with the settled law that appellate courts should not substitute their own view for the officer's reasonable belief where prima facie grounds exist. [Paras 5]The High Court's confirmation of acquittal on the ground that the officer lacked reasonable belief was set aside; the officer's reasonable belief and the resulting presumption under Section 123 were held to be justified.Admission of additional evidence under Section 391 Cr.P.C. - distinction between ornament and primary gold in seizure cases - Whether the High Court ought to have permitted additional evidence under Section 391 Cr.P.C. to formally prove the Mint Master's report certifying the purity of the seized article - HELD THAT: - The Court found the High Court erred in refusing the prosecution's request to have the Mint Master's report formally proved, treating the defect as merely technical and remediable by recording additional evidence. The elapsed time since the alleged offence (six years) was not a valid reason to deny an opportunity to cure a formal lacuna when the report supporting the prosecution's case had been placed on record but not formally proved. The interests of justice and the public interest in prosecuting economic offences required that the opportunity to produce the formal evidence be granted. Consequently, the Court exercised its power under Section 391 Cr.P.C. to permit recording of the additional evidence and directed the High Court to issue appropriate directions for that purpose when the matter is relisted. [Paras 6]The application to adduce additional evidence under Section 391 Cr.P.C. should have been granted; the matter is remitted to the High Court with directions to record evidence to prove the Mint Master's report and proceed in accordance with law.Final Conclusion: The appeal is allowed: the order of acquittal is set aside. The court accepted the Customs officer's reasonable belief and statutory presumption under Section 123, and directed that the High Court permit recording of additional evidence under Section 391 Cr.P.C. to prove the Mint Master's report; the matter is remitted to the High Court to proceed accordingly. Issues:1. Acquittal under the Gold (Control) Act of 1968 based on evidence of ornament vs. primary gold.2. Acquittal under the Customs Act for possession of gold chain coated with mercury to appear as silver.3. Disregard of evidence by the trial court and High Court leading to acquittal.4. Rejection of additional evidence request under Section 391 of the Code of Criminal Procedure by the High Court.Issue 1: Acquittal under the Gold (Control) Act:The respondent, accused of an offence under Section 85 of the Gold (Control) Act of 1968, was acquitted by the trial court based on the argument that the seized gold chain was an ornament and not primary gold. The trial court relied on the evidence of a licensed gold dealer who stated that such waistchains were used as ornaments in Rajasthan, and the design of the chain indicated it was an ornament. However, the High Court failed to consider the deceitful nature of coating a gold chain with silver, which is not typical for genuine ornaments. The Supreme Court criticized the trial court's lenient approach towards economic offenders but did not delve further as the State did not press the appeal against this charge.Issue 2: Acquittal under the Customs Act:The respondent faced a charge under Section 135(1) read with Section 111 of the Customs Act for possessing a gold chain coated with mercury to appear as silver, violating the prohibition on importing gold of specified fineness. The trial court dismissed the evidence of a goldsmith certifying the chain as pure gold and rejected the presumption under Section 123(2) of the Customs Act. The High Court upheld the acquittal, ignoring crucial circumstances like the coating of the chain and the goldsmith's opinion. The Supreme Court emphasized that the Customs officer's reasonable belief in seizing the article as smuggled gold should not be second-guessed by the court, and the High Court's decision was deemed unreasonable and unsustainable.Issue 3: Disregard of evidence and acquittal confirmation:The High Court confirmed the acquittal based on three grounds, including the rejection of additional evidence to prove the gold's purity. The Supreme Court criticized the High Court for overlooking the interests of justice by refusing to consider the additional evidence, emphasizing that justice should not only benefit the accused but also serve the community by holding economic offenders accountable. The Court granted the request for additional evidence under Section 391 of the CrPC and set aside the acquittal, remitting the case back to the High Court for further proceedings.Issue 4: Rejection of additional evidence request:The High Court's refusal to allow additional evidence under Section 391 of the CrPC was deemed unjustified by the Supreme Court. The Court emphasized the importance of promoting justice for the community and holding economic offenders accountable. The High Court's decision to reject the request was criticized for failing to consider the interests of justice and the community, leading to the Supreme Court granting the application for additional evidence and setting aside the acquittal, directing the High Court to proceed further in accordance with the law.