TaxTMI 
TaxTMI 
1995 (10) TMI 51
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....e is available to the department in view of the fact that at the time of hearing the case, the diamonds were not in the list of `Notified Items'? 2.Thereafter upon the application of the petitioner the High Court directed the Tribunal to refer following, two questions, by its Order dated 18-8-1995 :- Whether the Tribunal was correct in holding that the applicant1. failed to discharge the burden of proving that the diamonds in question are not smuggled goods and whether the fndings of the Tribunal in this regard is perverse? Whether on the facts and in the circumstances of the case, the2. Tribunal was correct in upholding the levy of penalty upon the Applicant? 3.In this way, we are required to decide the aforesaid three question....
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.... If any person other than the person from whose possession the goods were seized claims to be owner thereof, also on such other person. (b) In any other case on the person if any who claims to be the owner of the goods so seized. (c) This section shall apply to gold or diamonds, watches and any other class of goods which the Central Government may by Notification in Official Gazette specify." 8.Section 123 is a statutory exception to the general rule which requires the prosecution to prove the charges of which a person is alleged to be guilty. For applying under Section 123, however, it is necessary that the Customs Authority should have `reasonable belief'. `Reasonable belief' means `honest belief'. Webster defines "reasonable" as....
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....sale of 329.40 Cts. of rough diamonds. HDCL is a Company sponsored by Government of India and had imported the said diamonds in rough condition and particular about the relevant import licenses were also mentioned in this bill. (b) Sales Tax Declaration Form as regards the aforesaid sale in accordance with the provision of Section 12 of Maharashtra Sales Tax Act, 1959. (c) Bill dated 2-3-1981 alongwith a letter dated 3-3-1981 of Arihanta Diamonds as regards sale of the aforesaid quantity of 329.40 Cts. of rough diamonds to Gunvant J. Mehta. (d) Sales Tax Declaration Form under Section 12 of the Maharashtra Sales Tax Act, 1959 in respect of the aforesaid sale from Arihanta Diamonds to Gunvant J. Mehta. (e) Names and other details....
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.... 20-1-1981. 12.What is strange in this case is that neither of the two authorities have discussed or considered the evidence mentioned above. Non-consideration of the above circumstance and evidences led to the erroneous conclusion holding that the petitioner did not explain the background of his possession of the diamonds. In the instant case, the applicant was in possession of the diamonds and as well as jewelleries. In respect of the second item the Tribunal gave finding in favour of the petitioner by directing it to be released, whereas in the case of diamonds his view was different. Reasons for taking this view does not appear to be convincing and reliable. Had the Collector of Customs and Tribunal properly appreciated the evidence ....
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.... of 26-8-1967. Nevertheless, as the provisions of Section 123(1) of the Act only lay down a procedural rule, they could be applied when the case came up for trial before the Presidency Magistrate who actually decided it on 15-7-1969. Indeed, the complaint itself was filed on 30-10-1968." 16.From the observations of the Supreme Court quoted above it is clear that the goods seized in that case had been notified as provided by Section 123(2) of the Customs Act. The learned Counsel is not right in distinguishing this decision on the ground mentioned above. 17.What appears from the aforesaid decision is that since on the date of trial the goods seized had not been in the notified list. Presumption laid down by Section 123 did not apply. Em....