TaxTMI 
TaxTMI 
2016 (9) TMI 1169
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....here was no seizure of gold bars from the present respondent, who is the legal representative of Santo Kumar Mitra, on the ground that the concept of seizure in essentiality has not been satisfied by the Customs Department? (b). Whether the tribunal is justified in holding that during the interregnum period, after the order of the Judicial Commissioner, the articles seized by the police never came to the physical or symbolic possession of Nirmala Mitra (wife of Santo Kumar Mitra), and whether such a finding recorded by the tribunal can be held to be perverse?" 3. The statement of facts based on the aforesaid order sent to this Court is to the effect that C.I.D. Branch of Bombay Police instituted a case against Late Santo Kumar Mitra for defalcation of Government money on 04.11.1950 when it seized amongst others foreign-marked gold bars from his residential premises in Bombay. The case of the police was that out of the defalcated money, Late Sri Mitra acquired movable and immovable properties. Sri Mitra was tried for the offences under Sections 409, 420, 467 and 120B of the Indian Penal Code. Though the statement of facts does not make mention about the result of the cri....
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....uary, 1993 as there is reason to believe that this gold of foreign origin is illegally imported in India. After giving notice to State Bank of India to produce the foreign origin gold on 4th of March, 1993, and to the respondent, a seizure- memo was prepared on 4th of March, 1993. The seizure-memo mentions that the goods have been seized from Smt. Nirmala Mitra. She is signatory to such seizure-memo. 6. The Assistant Collector of Central Excise & Customs served a notice on 12th of April, 1993 to Mrs. Nirmala Mitra as to why the gold seized on 4th of March, 1993 bearing foreign marking should not be confiscated under Sections 111(d) and 111(p) of the Customs Act, 1962 and why penalty under Section 112(b) of the Customs Act, 1962 should not be imposed on her for contravention of the provisions of Section 11 of the Customs Act, 1962 read with Section 3(1) of the Import & Export (Control) Act, 1947. 7. The learned Commissioner as an Adjudicating Authority reproduced the reply submitted by the respondent dated 25th of March, 1994 in its order dated 9th of August, 1999. The relevant extract from the reply reads as under:- "(2) That the gold with foreign markings had been p....
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....n origin weighing 3.750 gms. The foreign markings thereon clearly suggested that the impugned gold have been brought into India from abroad. (2) The second factor which led to the reasonable belief in the mind of the officers was non possession and consequent non production of any documentary evidences to suggest lawful import of the impugned gold by Smt. Nirmala Mitra, the alleged owner of the foreign marked gold in question at the time of seizure of impugned gold. Smt. Nirmala Mitra appeared before the Assistant Collector of Customs & Central Excise, Ranchi on 19.01.1993 alongwith her daughter Smt. Ela Ghosh who failed to submit any documents in support of lawful import of the foreign marked gold in question. They were again directed to come with necessary documents on 25.01.1993 to satisfy the authorities regarding lawful import of the impugned gold but they failed to turn-up on the date. They were again directed to appear on 08.02.1993 alongwith necessary evidences but they failed to turn-up even on this date. Accordingly, the Customs authorities had no option except to seize the aforesaid gold on 04.03.1993 under a regular panchnama. Section 3 of Imp....
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.... be a seizure under the Customs Act so as to invoke the provisions of Section 178A of Sea Customs Act, 1878 or the provisions of Section 123 of the Customs Act 1962? (2). Even if the seizure is held to be by the custom authorities, whether the provisions of the said two sections will not apply inasmuch as they were not in existence at the time of original seizure by the police? 13. In respect of first issue, the Tribunal referred to Supreme Court judgment in Gian Chand & Ors. Vs. State of Punjab, A.I.R. 1962 SC 496=1983 ELT 1365 (SC) and held as follows:- "7. By applying the ratio of the above decision of the Hon"ble Supreme Court which is more or less akin to the facts and circumstances of the present case we hold that there was no seizure by the customs authorities under the Customs Act so as to invoke the provisions of section 178A of the Sea Customs Act, 1878 or section 123 of the Customs Act, 1962 against the appellants for placing the onus upon them as regards the non-smuggled nature of the gold in question. We also draw support from the decision of the Tribunal in the case of Shri K. Deeman v. CC, Madras-1987 (11) ECR 333 (CEGAT-SRB) and in the case of S....
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....in question. Therefore, the same cannot be presumed to be smuggled one. The Tribunal referred to the statement of Sri Mitra recorded at the time of seizure and during investigation that gold in question was purchased by him from Reserve Bank of India through brokers. Since the prosecution case before the Criminal Court was that the gold was acquired by Sri Mitra by defalcation of money during the period 1941 to 1949, therefore, there is no evidence produced by the Revenue to show that the gold was smuggled and acquired illegally in the year 1950. Consequently, the appeal was allowed and confiscation and penalty imposed were set aside. 16. Before this Court, learned counsel for the parties agreed that since seizure of the gold was in the year 1950, it was Sea Customs Act, 1878 ( for short "the Act") which will be relevant to determine the violation of the provisions of the Act and the right of the Revenue to confiscate such alleged smuggled goods. It is argued by the Revenue that Section 178A of the Act as inserted by the Sea Customs (Amendment) Act, 1955 (Act No. 21 of 1955 on 7th of May, 1955) will be applicable to the goods in question for the reason that it lays down procedur....
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....Official Gazette, order that, subject to such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into the States any gold or silver or any currency notes or bank notes or coin whether Indian or foreign. Explanation.- The bringing or sending into any port or place in the States of any such article as aforesaid intended to be taken out of the States without being removed from the ship or conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be sending, into the States of that article for the purposes of this section. (2) No person shall, except with the general or special permission of the Reserve Bank or the written permission of a person authorized in this behalf by the Reserve Bank, take or send out of the States any gold, jewellery or precious stones, or India currency notes, bank notes or coin or foreign exchange other than foreign exchange obtained from an authorised dealer. Import and Exports (Control) Act, 1947 3. Powers to prohibit or rest....
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....ank. 19. It is, thus, contended that the notification dated 25th August 1948 though issued under sub-section (1) of Section 8 of the Foreign Exchange Regulation Act, 1947 but it is operative under the Act as well in terms of Section 19 of the Act, which contemplates that the Central Government may prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of British India or any specified part of British India. It is also pointed out that the show-cause notice mentioned violation of the Control Act but the notification issued under the Foreign Exchange Regulation Act, 1947 has to be read under the Control Act as well as under the Act. 20. It is, thus, contended that foreign marking gold having recovered by the Bombay police in the year 1950 is liable to be confiscated in terms of Section 182 of the Act as the explanation as to time of import and its source of purchase was required to be adduced by the person from whose custody the foreign marking gold was recovered. The appellant has discharged the initial onus of the goods being smuggled as they were bearing foreign marking. Then the onus shifted to the assessee to prove that....
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....as in force. Since the Revenue has not proved any such fact, therefore, the order of the Tribunal cannot be said to be giving rise to any substantial question of law for the opinion of this Court. 22. We have heard learned counsel for the parties and find that the second question needs to be taken up first for decision. 23. A perusal of the order passed by the Judicial Commissioner on 5th of January, 1993 shows that the ornaments were ordered to be released to her after conclusion of trial and on payment of fine of Rs. 15,00,000/- and other expenses but before the physical delivery could be given to Smt. Nirmala Mitra, the Custom Authorities invoked the jurisdiction of the Judicial Commissioner in terms of the liberty granted by Ranchi Bench of the Patna High Court. The order passed by the Judicial Commissioner on 8th of January, 1993 as reproduced in Paragraph 4 of the order is that Smt. Nirmala Mitra shall give an undertaking to the effect that she will keep the gold of foreign origin in safe custody of the State Bank of India and Central Excise would be at liberty to take legal steps with regard to gold of foreign origin after the same is deposited by Smt. Nirmala Mitra in....
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....itra from whose possession the police has initially taken control of not only the foreign marked gold bars but the ornaments as well. Under Section 178 of the Act, any officer of the Custom can seize anything liable to confiscation with the object of bringing by smuggling. The goods were seized by the Custom Authorities on 4th of March, 1993 on the reasonable belief that they are liable to confiscation that they have been imported into India illegally. The violation is of the prohibition contained by Notification dated 25th of August, 1948. The goods were seized by the Bombay police in the year 1950. Though, the seizure under the Act was on 4th of March, 1993 but the relevant time to consider the legality of import is the year 1950 or prior thereto. 27. The stand of the respondent before the police as well as in written reply to the Custom Authorities is that Sri Mitra purchased the foreign marked gold bars from the Reserve Bank of India through brokers. The stand of the respondents that it was purchased between the years 1941 to 1949 is not made out. The requirement of permission from Reserve Bank of India came to be introduced only by notification dated 25th of August, 1948. P....
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....he Court examined the question that the fundamental rules relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrary is on the department but while appreciating the scope and nature of the onus cast by it, the department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth and the law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. The Court observed as under:- "30. It cannot be disputed that in proceedings for imposing penalties under clause (8) of Section 167, to which Section 178- A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrary. But, in appreciating its scope and the nature of the onus cast by it, we must pay due regard to other kindred principles, no less fundament....
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....by the presumption of guilt arising from the recent (unexplained) possession of stolen property", though the latter is only a presumption of fact. Thus the burden on the prosecution or the Department may be considerably lightened even by such presumptions of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden, to discharge which, very slight evidence may suffice. 33. Another point to be noted is that the incidence, extent and nature of the burden of proof in proceedings for confiscation under the first part of the entry in the 3rd column of clause (8) of Section 167, may not be the same as in proceedings when the imposition of the other kind of penalty under the second part of the entry is contemplated. We have already alluded to this aspect of the matter. It will be sufficient to reiterate that the penalty of confiscation is a penalty in rem which is enforced against the goods and the second kind of penalty is one in personam which....
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....tion to Section 101. The latter with its Illustration (a) lays down the general rule that in a criminal case the burden of proof is on the prosecution and Section 106 is certainly not intended to relieve it of that duty. On the contrary, it is designed to meet certain exceptional cases in which it would be impossible, or at any rate disproportionately difficult, for the prosecution to establish facts which are "especially" within the knowledge of the accused and which he could prove without difficulty or inconvenience. The word "especially" stresses that. It means facts that are pre-eminently or exceptionally within his knowledge. 28. In Collector of Customs v. D. Bhoormal (1974) 2 SCC 544 proceedings were initiated under Section 167(8)(c) of the Customs Act for confiscation of contraband or smuggled goods and it was observed: (SCC p. 553, paras 31-32) "Since it is exceedingly difficult, if not absolutely impossible, for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden. ... On the principle underlying Section 106, Evidence Act, the burden ....
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....ection 9 of the Foreigners Act regarding burden of proof is basically on the same lines as the corresponding provision is in UK and some other Western nations and is based upon sound legal principle that the facts which are peculiarly within the knowledge of a person should prove it and not the party who avers the negative." 33. In view of the aforesaid judgments, we arrive at a conclusion that though the initial onus was on Revenue to prove the illegal import of gold and that such illegal import stand established when almost 20 Kg. of gold with foreign marking was confiscated in the year 1950. Since the gold was seized in the year 1950, it would be believed to have been imported soon before that as such gold imported would not be kept as such for a long period as alleged by the deceased Sri Mitra that it was imported between the years 1941 to 1949. In fact, the prohibition of import of gold came into force on 25th of August, 1948. Therefore, for more than two years, it is unbelievable that imported gold will be retained as such. Such stand of the Revenue has to be examined keeping in view the stand taken by the assessee that he purchased the gold when there was no prohibition a....