1978 (10) TMI 51 - HC - Customs

Court orders probation instead of imprisonment for smuggling gold biscuits; confiscation order overturned.

The accused was convicted under Section 135(b)(ii) of the Customs Act for dealing with smuggled gold biscuits. However, instead of imprisonment, the court ... Burden of proof in certain cases - Reasonable belief at time of seizure - Knowledge or reason to believe goods liable to confiscation - Offence under Section 135(b) of the Customs Act, 1962 - Confiscation vested in the Central Government - Probation of Offenders Act-application to customs offencesBurden of proof in certain cases - Reasonable belief at time of seizure - Whether the seizure was made in the reasonable belief that the gold biscuits were smuggled goods and thereby triggered the statutory burden under Section 123 - HELD THAT: - The Court held that Section 123 applies if the seizing officer entertained an objectively ascertainable reasonable belief that the goods seized were smuggled. Prior information that the persons had gone to Bombay 'bringing smuggled goods', the contemporaneous stopping and search, recovery of gold biscuits bearing foreign markings and the seizure memo recording reasons together constituted material on which a reasonable belief could be entertained. The learned Magistrate's conclusion that Section 123 did not apply was erroneous because the record showed that the seizing officer had reasons for his belief; once such reasonable belief is established the statutory burden shifts to the person from whose possession the goods were seized to prove they were not smuggled. [Paras 19]Section 123 applied: the seizure was effected in the reasonable belief that the gold biscuits were smuggled, thereby shifting the burden of proof to the accused.Offence under Section 135(b) of the Customs Act, 1962 - Knowledge or reason to believe goods liable to confiscation - Whether the accused is guilty under Section 135(b)(ii) having regard to the burden shifted by Section 123 and the evidence - HELD THAT: - Applying the presumption arising under Section 123, the accused failed to discharge the burden of proving licit possession or innocent receipt. The appellant being a saraf (goldsmith) and the presence of gold biscuits with foreign markings, together with the accused's implausible denial and alternative version (that another person picked up and delivered the biscuits), led the Court to conclude that the accused knew or had reason to believe the goods were liable to confiscation. The learned Magistrate's acquittal was therefore set aside and the accused was held guilty of the offence under Section 135(b)(ii). [Paras 19]Accused convicted under Section 135(b)(ii); prosecution requirements satisfied once Section 123 applied and accused failed to prove lawful possession.Probation of Offenders Act-application to customs offences - Whether, upon conviction, the accused should be sentenced to imprisonment or be released on probation - HELD THAT: - The Court considered the nature of economic offences and the guidance of higher courts on sentencing, but also noted the accused's youth (about seventeen at the time of offence) and the long interregnum since the act. As Section 140A (post-1973) excludes probation for most offenders except those under eighteen, and the offence occurred in 1965, the Court exercised discretion under the Probation of Offenders Act. Balancing deterrent considerations with the accused's age and lapse of time, the Court directed release on probation on furnishing bonds and surety for two years instead of immediate imprisonment. [Paras 23, 25]Convicted person to be released on probation for two years on furnishing bond and surety; no substantive imprisonment imposed.Confiscation vested in the Central Government - Whether the learned Magistrate's direction to confiscate the gold biscuits to the State of Rajasthan was correct - HELD THAT: - The Court observed that under the statutory scheme confiscated goods vest in the Central Government. Consequently, the Magistrate's order directing confiscation to the State of Rajasthan was inconsistent with Section 126 and was set aside. The property was ordered to be returned to the Central Government through competent Customs officers. [Paras 24]Order of confiscation to the State of Rajasthan set aside; gold biscuits to be returned to the Central Government through proper Customs officers.Final Conclusion: Appeal allowed: acquittal set aside; respondent convicted under Section 135(b)(ii) of the Customs Act, 1962; released on probation for two years on furnishing bond and surety; order directing confiscation to the State of Rajasthan set aside and goods to be handed over to the Central Government. Issues Involved:1. Reasonable belief for seizure under Section 123 of the Customs Act.2. Burden of proof regarding smuggled goods.3. Applicability of Section 135(b) of the Customs Act.4. Confiscation of gold biscuits.5. Sentencing and probation.Detailed Analysis:1. Reasonable Belief for Seizure under Section 123 of the Customs Act:The primary issue was whether the seizure of gold biscuits from the accused was made under a 'reasonable belief' that the goods were smuggled. The prosecution argued that the information received by the customs officer about the accused bringing smuggled gold from Bombay constituted a reasonable belief. The court noted that the officer had prior information specifically about smuggled gold, and the seizure memo clearly mentioned the reasons for recovery. Thus, it was held that the seizure was made under a reasonable belief that the gold was smuggled.2. Burden of Proof Regarding Smuggled Goods:Under Section 123 of the Customs Act, once goods are seized under the reasonable belief that they are smuggled, the burden of proof shifts to the accused to prove that the goods are not smuggled. The court found that the prosecution had established the reasonable belief required for the seizure, thereby shifting the burden to the accused. The accused failed to discharge this burden, as he denied the recovery of gold biscuits from his possession and provided no credible evidence to prove that the goods were not smuggled.3. Applicability of Section 135(b) of the Customs Act:Section 135(b) pertains to dealing with goods that one knows or has reason to believe are liable to confiscation under Section 111. The court examined whether the accused had knowledge or reason to believe that the gold biscuits were smuggled. Given the foreign markings on the gold biscuits and the circumstances of their recovery, the court concluded that the accused, being a saraf (goldsmith), was aware that the gold was smuggled. Therefore, the court held that the accused was guilty under Section 135(b)(ii) of the Customs Act.4. Confiscation of Gold Biscuits:The trial court had ordered the confiscation of the gold biscuits to the State of Rajasthan. However, the appellate court noted that the gold biscuits had already been confiscated by the Customs authority and vested in the Central Government under Section 126 of the Act. Consequently, the order of confiscation to the State of Rajasthan was set aside, and it was directed that the gold biscuits be returned to the Central Government through the competent Customs officer.5. Sentencing and Probation:The court considered the appropriate sentence for the accused. Although the offence was serious, the court took into account the long duration since the offence (nearly 13 years) and the age of the accused (about 17 years at the time of the offence). The court also considered the reformative approach under the Probation of Offenders Act, 1958. Instead of sentencing the accused to imprisonment, the court directed that he be released on probation for two years, with a personal bond of Rs. 5,000 and one surety in the like amount, to the satisfaction of the Munsif and Judicial Magistrate, First Class, Bhilwara.Conclusion:The appeal was accepted, and the accused was convicted under Section 135(b)(ii) of the Customs Act. He was released on probation instead of being sentenced to imprisonment. The order of confiscation of the gold biscuits to the State of Rajasthan was set aside, and the gold biscuits were directed to be returned to the Central Government through the competent Customs officer.