TaxTMI 
TaxTMI 
1974 (4) TMI 33
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....utside the premises and since that person had not returned for a considerable time, he got them removed into the shop. Baboothmull was unable to throw any light with regard to the owner or the contents of the packages. 3. After getting a consent letter from Baboothmull the officer opened the packages which contained these articles of the total value of Rs. 12,255/-. 1. Parker Fountain Pens (19 made in Canada) 28 Doz. 3,360-00 Rs. 2. Master Hair Clippers made in Germany 5 Doz. 600-00 Rs. 3. Oster Hair Clippers made in Germany 3 1/2Doz. 400-00 Rs. 4. Venus Pencils made in England 760 Doz. 2,250-00 Rs. 5. K. 55 Out Thread Razors made in Germany 68 Doz. 4,080-00 Rs. 6. Nylon Buttons made in Japan 47 Gross. 705-00 Rs. 7. Gillette Razor Blades made in England 1000 Pcs. 120-00 Rs. 8. 7 O'clock Razor sets made in England 12 Doz. 730-00 Rs. _______________ 12,255-00 Rs. 4. The Officers seized these goods under a mahazarnama. 5. On June 9, 1962, a letter was addressed by the sai....
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....for supply of the necessary information, was reiterated. 9. The importation of goods shown as Items 1, 4 and 7 had been prohibited since December 1957 and of those at Items 2, 3, 5, 6 and 8 since March 1960, save under a licence issued by the Import Trade Control Authorities under Section 19 of the Sea Customs Act read with Section 3(1) of the Imports and Exports Control Act, 1947. 10. The Assistant Collector of Customs on October 26, 1962 issued a notice to Bhoormull through his Solicitors, M/s. Gagrat & Co., Bombay requiring him to produce evidence of bona fide acquisition of the goods in question failing which to show cause within a week as to why those goods valued at Rs. 12,255/- be not confiscated under Section 167(8) of the Sea Customs Act read with Section 3(2), Imports and Exports Control Act, 1947. It was added that in case no reply was received within the specified period the case would be decided ex parte on the basis of the facts already on record without further reference to him. 11. In reply, a letter, dated December 13, 1962, was written by the Solicitors in which, it was inter alia stated that on June 4, 1962, at Madras, the goods, being Items 2 and 4 to 8....
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....y imported. The main circumstances, taken into account by the Collector, in raising such an inference, may be arranged as under : (i) The import of such goods has been totally prohibited since 1957 except in the case of hair clippers and Venus Pencils, which were allowed on a highly restricted quota-basis till October 1959/March 1960. Policy period, when their import too was banned. (ii) The highly suspicious circumstances of the seizure and the dubious conduct of the parties in relation thereto : (a) This large number of goods, all of foreign origin worth over Rs. 12,000/-, were found fully packed and ready for despatch. (b) Baboothmull from whose possession they were seized gave conflicting and evasive explanations in regard thereto. At the time of seizure on June 4, 1962, he disclaimed all knowledge about the ownership and contents of those packages, and said they were left outside the shop by a broker whom he could not identify. Some days later, he "appeared in the arena (garb 7) of an anonymous (fictitious?) person, one Bhoormull". (c) It was eight days after the seizure that one Bhoormull by a letter claimed ownership of the goods,....
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....e a mere suspicion cannot be a substitute for proof. On the above reasoning, the Bench allowed the appeal and quashed the Collector's order of confiscation of the goods. Hence this appeal with special leave, by the Department. 20. Before dealing with the contentions canvassed, we would refer briefly to the relevant statutory provisions. 20. Section 167 of the Sea Customs Act provides for offences punishable to the extent mentioned in the 3rd column of the Schedule appended to that Section. Clause (8) of that Schedule provides that if any goods the importation or exportation of which is for the time being prohibited or restricted by order under Chapter IV of this Act be imported into or exported from India contrary to such prohibition or restriction, then (i) such goods "shall be liable to confiscation, and (ii) any person concerned in any such offence shall be liable to a penalty not exceeding three times of the value of the goods, or not exceeding 1000 rupees". 22. Section 171A specifically empowers the Customs Officers employed in the prevention of smuggling to summon any person whose attendance he considers necessary either to give evidence or to produce a document ....
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....viz., that it is for the State or its Department to prove the offence against the accused or the defendant. Thus in England, Section 290(2) of the Customs and Excise Act, 1952 provides that where in any proceeding relating to Customs or Excise any question arises as to the place from which any goods have been brought or as to whether or not any duty has been paid or any goods have been lawfully imported etc., then the burden of proof shall lie upon the other party to the proceeding. In India Parliament inserted Section 178A by the Amending Act 10 of 1957, but it did not in its wisdom, go as far as Section 290(2) of the English Act. Section 178A in terms applies to "gold, gold manufacture, diamonds and other precious stones, cigarettes and cosmetics". With regard to these specified goods if seized under this Act in the reasonable belief that they are smuggled goods, the burden of proof that they are not such goods shall be on the person from whose possession, they are seized. But with regard to any other goods, the rule in sub-section (1) of Section 178A would not apply unless the Central Government had specifically applied the same by notification in the Official Gazette. It is com....
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....er of the Collector did not suffer from any apparent error or defect of jurisdiction. His order was based on an appraisement of the circumstantial evidence before him and was consistent with the rules of natural justice. He had given the fullest opportunity to the respondent to put forth his case and had issued two show-caused notices to him through his Solicitors. The Division Bench of the High Court exercising jurisdiction under Article 226 was not competent to go into the question of the adequacy of that evidence, and act as if it was a court of appeal. 30. Mr. Ramamurthi, learned Counsel for the Respondent, contends in reply, that all proceedings were conducted by the Collector on the assumption that Bhoormull was the claimant or the supposed owner of the goods; that at no stage, before the High Court an objection was taken that he had no locus standi to maintain the writ petition, because he had no interest in the confiscated goods, and consequently this objection should not be entertained for the first time in this Court. Learned Counsel further submits that proceedings of confiscation being penal in nature, the burden was on the Department to show by cogent and convincing....
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....e power of the other to have contradicted". 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. 33. Smuggling is clandestine conveying of goods to avoid legal duties. Secrecy and stealth being its covering guards, it is impossible for the Preventive Department to unravel every link of the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the person concerned in it. On the principle underlying Section 106, Evidence Act, the burden to establish those facts is cast on the person concerned : and if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or the Department would rebut the initial presumption of innocence in favour of that person, and in the result prove him guilty. As pointed out by Best in `Law if Evidence' (12th Edn. Article 320, page 291), the "presumption of innocence is, no doubt, presumptio juris : but every day&....
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....recapitulate only the most salient among them. 37. The importation of such goods into India had been banned several years earlier, i.e. some of them in 1957 and of others in 1960. These goods, without exception, were all of foreign origin. They were of large value of over Rs. 12,000/-. They were all lying packed as if they had been freshly delivered, or were ready for despatch to a further destination. They were not lying exhibited for sale in the show cause of the shop. Baboothmull from whose apparent custody or physical possession, they were seized disclaimed not only their ownership but also all knowledge about the contents of the packages. He could not give a satisfactory account as to how those packages came into his shop. At first, he said that some next-door unknown broker had left them outside his shop. Some days later, he came out with another version viz. that one Bhoormull had left them there. Eight days after, one mysterious person who gave out his name as Bhoormull laid claim to these goods. Despite repeated requisitions Bhoormull did not furnish any information regarding the source of the alleged acquisition of the goods. He never appeared personally before the Col....
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.... in contravention of the Foreign Exchange Regulation Act, 1947. The Collector of Customs confiscated it under Section 167(8) of the Act. The legality of confiscation was challenged by a petition under Article 226 of the Constitution before the High Court, on the ground that there was no evidence before the Collector to show that the gold had been imported into India after restrictions had been imposed in March 1947 on its importation. The High Court rejected this contention and dismissed the petition. The same argument was advanced before his Court in appeal by special leave. This Court also negatived this contention. While conceding that there was no direct evidence that the gold had been smuggled after March 1947, it was held that a finding to that effect could be reached by referring to "the conduct of the appellant in connection with (a) the credibility of the story about the purchase of this gold from three parties, (b) the price at which the gold was stated to have been purchased which was less than the market price and (c) the hurry exhibited in trying to get the gold melted at the refinery with a small bit of silver added so as to reduce the fineness of the gold and thus ap....
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....urden on the appellant. What the impugned order does is that it refers to the evidence on the record which militates against the version of the appellant had not been able to meet the inferences arising therefrom............ In our opinion, the High Court was right in holding that the burden of proof had shifted on the appellant after the Customs Authorities had informed the appellant of the results of the enquiries and investigations. This also dispose of the first point. As we have said, the burden was on the Customs Authorities which they discharged by falsifying in many particulars the story put forward by the appellant............... It cannot be disputed that a false denial could be relied on by the Customs Authorities for the purpose of coming to the conclusion that the goods had been illegally imported." 42. In the case before us, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector. There was no violation of the rules of natural justice. The Collector had given the fullest opportunity to Bhoormull to establish the alleged acquisiti....
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.... is that it may, proportionately with the gravity or the relative triviality of the issues at stake, in some special type of case, lighten the burden of proof resting on the prosecution. For instance, once it is shown that the accused was travelling without a ticket; a prima facie case against him is proved. If he once had such a ticket and lost it, it will be for him to prove this fact within his special knowledge. Similarly, if a person is proved to be in recent possession of stolen goods, the prosecution will be deemed to have established the charge that he was either the thief or had received those stolen goods knowing them to be stolen. If his possession was innocent and lacked the requisite incriminating knowledge, then it will be for him to explain or establish those facts within his peculiar knowledge, failing which the prosecution will be entitled to take advantage of the presumption of fact arising against him, in discharging its burden of proof. 45. These fundamental principles, shorn of technicalities, as we have discussed earlier, apply only in a broad and pragmatic way to proceedings under Section 167(8) of the Act. The broad effect of the application of the basic ....