Customs Act: Burden of Proof Upheld, Writ Petition Dismissed

The court upheld the Tribunal's decision, confirming that Customs Officers had sufficient grounds to believe the diamonds were smuggled based on discrepancies and lack of evidence provided by the petitioners. The court found the petitioners failed to meet the burden of proof under Section 123 of the Customs Act by submitting inadequate and questionable affidavits. Consequently, the writ petition was dismissed, and the Tribunal's order was affirmed.

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Issues Involved:
1. Adequacy of material to form a reasonable belief u/s 110 read with Section 123 of the Customs Act, 1962.
2. Whether the burden of proof u/s 123 was discharged by the petitioners through affidavits.

Summary:

Issue 1: Adequacy of Material for Reasonable Belief
The Customs Officers, acting on secret information, searched the premises of M/s. Gems Impex Corporation and found a large quantity of diamonds that were not accounted for in the firm's books. Despite the petitioners' claims that the goods were purchased locally and partially paid for in cash, no documentary evidence or purchase vouchers were produced. The officers seized the goods in the reasonable belief that they were smuggled, as per Sections 110 and 123 of the Customs Act, 1962. The court held that the officers had adequate material to form this belief, based on the significant discrepancy between the stock found and the stock recorded, the inability of the petitioners to produce evidence of legal acquisition, and the presence of incriminating documents indicating transactions in foreign currencies.

Issue 2: Burden of Proof u/s 123
The petitioners argued that they had discharged the burden of proof by submitting affidavits from three individuals claiming ownership of the seized diamonds. However, the court found these affidavits insufficient and improbable. The affidavits were filed 15 months after the seizure and lacked material particulars such as entries in the deponents' books of account or issuance of jangad notes. The court noted that the petitioners had changed their stands multiple times, further undermining their credibility. The Tribunal's decision that the petitioners failed to discharge the burden of proof was upheld.

Conclusion:
The court confirmed the Tribunal's order, holding that the Customs Officers had adequate material to form a reasonable belief that the diamonds were smuggled and that the petitioners failed to discharge the burden of proof u/s 123 by merely tendering affidavits. The writ petition was dismissed, and the reference questions were answered accordingly.

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