1964 (11) TMI 3 - SC - Customs

Supreme Court: Possession of smuggled goods not enough for conviction under Sea Customs Act

The Supreme Court ruled that mere possession of smuggled goods does not automatically imply involvement in their illegal importation. The Court emphasized ... Whether the appellant was concerned in committing the offence of importing gold illegally ? Held that:- Mere finding of fact that a person is in possession of smuggled goods does neither imply that the Collector of Customs had considered the question of the person's being concerned in the commission of the offence of illegal importation of the goods nor in any way justifies the conclusion that the person must have been so concerned. Other circumstances indicating that the person had some connection with the importation of the goods prior to their actual import have to be established. In the present case no such circumstances have been alleged which would connect the appellant with the importing of the smuggled gold recovered from his person. There is no mention of any such circumstances in the order of the Collector or even in the reply affidavit filed in the High Court by the Assistant Collector of Central Excise and Land Customs, New Delhi, though the appellant had said in ground No. C of the writ petition that there was absolutely no material before respondent No. 3 on which he could have come to a finding that the petitioner had imported the said gold. We may also mention here that there is no allegation that the appellant himself smuggled the gold from outside the country. We do not agree with the High Court that it was implicit in this order that the Collector was fully satisfied that Shri Jagdish Singh was concerned in the offence described in S. 167(8) of the Act. Appeal allowed. Issues Involved:1. Whether the appellant was concerned in the illegal importation of smuggled gold.2. Whether the Collector of Customs was required to record a formal finding of the appellant's involvement in smuggling.3. Whether possession of smuggled goods implies involvement in their illegal importation.Issue-wise Detailed Analysis:1. Concern in Illegal Importation of Smuggled Gold:The appellant was found in possession of smuggled gold, and the Superintendent of Land Customs issued a notice for confiscation and penal action under Section 167(8) of the Sea Customs Act, 1878. The Collector of Central Excise and Land Customs ordered the confiscation of the gold and imposed a penalty of Rs. 15,000 on the appellant. The appellant contended that the findings of possession and the gold being smuggled did not justify the conclusion that he was concerned in the illegal importation. The Supreme Court held that mere possession of smuggled goods does not imply involvement in their illegal importation. The Court emphasized that for a person to be penalized under Section 167(8), there must be evidence of their involvement or interest in the importation prior to the completion of the offense.2. Requirement of Formal Finding by the Collector:The appellant's writ petition was initially allowed by a Single Judge of the Punjab High Court, who relied on the decision in Balbir Singh v. Collector of Central Excise and Land Customs, which required a formal finding of involvement in smuggling. However, the appellate Bench set aside this decision, relying on Union of India v. Jagdish Singh, which held that a formal finding was not necessary. The Supreme Court clarified that while a formal finding may not be essential, the Collector's order must indicate that the matter of involvement in smuggling was considered. The order should reflect the reasoning behind the conclusion of involvement in illegal importation.3. Implication of Possession in Illegal Importation:The Supreme Court noted that possession of smuggled goods alone does not justify the conclusion that the person was involved in their illegal importation. The Court stated that the term 'concerned' in Section 167(8) requires that the person must have been involved or engaged in the offense at a stage prior to the completion of the illegal importation. The Court referred to decisions from the Bombay, Calcutta, and Madras High Courts, which supported this view. The Court concluded that the Collector's finding of possession did not imply involvement in smuggling and that other circumstances indicating connection with the importation must be established.Judgment:The Supreme Court allowed the appeal, set aside the order of the appellate Bench of the High Court, and restored the order of the Single Judge. The Court held that the mere finding of possession of smuggled goods does not imply involvement in their illegal importation and that the Collector's order must show consideration of the person's involvement in the offense. The Court emphasized the need for evidence of involvement in the importation process prior to the completion of the offense for imposing a penalty under Section 167(8) of the Sea Customs Act, 1878.