Penalty for smuggled goods requires proof of nexus with illegal importation, not mere possession alone.

Penalty under Section 167(8) of the Sea Customs Act, 1878 requires proof that the person proceeded against was concerned in the illegal importation itself. The offence of importation is completed when the goods cross the customs frontier, and a prior nexus with that act must be shown. Mere possession of smuggled gold, even with knowledge of its character, does not by itself establish participation in importation. On the facts noted, the order recorded only recovery of smuggled gold and did not link the appellant to the importation or address whether he was concerned in that offence, so the penalty was not sustainable on possession alone.

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Issues: Whether a penalty under Section 167(8) of the Sea Customs Act, 1878 could be imposed merely because smuggled gold was found in the appellant's possession, without a finding that he was concerned in its illegal importation.

Analysis: Section 167(8) penalises a person who is concerned in the offence of importing prohibited or restricted goods contrary to law. The offence of importation is complete when the goods cross the customs frontier, and the person proceeded against must have some connection with the importation prior to that completion. Mere possession of smuggled goods, even with knowledge that they are smuggled, does not by itself establish participation in the act of importation. The order of the Collector recorded recovery of smuggled gold from the appellant but did not disclose any circumstance linking him to the actual importation, nor did it show consideration of the question whether he was concerned in that offence.

Conclusion: The penalty was not sustainable on the basis of possession alone, and the appellant was entitled to relief.

Ratio Decidendi: For penalty under Section 167(8) of the Sea Customs Act, 1878, the revenue must prove a nexus between the person proceeded against and the illegal importation itself; possession of smuggled goods, without more, is insufficient.

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