Pukhraj Vs. D. R. Kohli [1962] INSC 97
(15 March 1962)
15/03/1962 GAJENDRAGADKAR, P.B.
GAJENDRAGADKAR, P.B.
KAPUR, J.L.
AIYYAR, T.L. VENKATARAMA
CITATION: 1962 AIR 1559 1962 SCR Supl. (3)
866
CITATOR INFO :
RF 1972 SC 689 (16) R 1987 SC1321 (4)
ACT:
Smuggled Gold-Seizure-Presumption of being
smuggled Reasonable belief, when justified--Confiscation-Legality of-If
importer alone liable to confiscation of gold-Sea Customs Act, 1878 (VIII of
1878), ss. 19, 167(8), 178, 178AForeign Exchange Regulation Act, 1947 (7 of
1947), 88. 8(1), 23A.
HEADNOTE:
The appellant, a goldsmith, while travelling
in a train from Calcutta was searched and found to be in possession of gold
weighing 290.6 tolas valued at Rs. 29,835. The gold was seized as it was
reasonably believed to be smuggled gold.
After service of a show cause notice and
after due enquiry the Collector passed an order for the confiscation of the
gold under s. 167(8) of the Sea Customs Act. The appellant contended that the
presumption under s. 178A of the Act could not be raised as on the facts of
this case there could be no reasonable belief that the gold was smuggled gold,
that the gold could not be confiscated as the appellant was not the importer
thereof and that s, 167(8) was not applicable to the facts of the case.
Held, that the order of confiscation of the
gold was validly and properly made.
Section 178A of the Act imposed the burden of
proving that the gold was not smuggled gold on the appellant if it was seized
under the Act in the reasonable belief that it was smuggled gold. Though the
question whether there was a reasonable belief or not was justiciable, the
Court was not sitting in appeal over the decision of the officer and all it
could consider was whether there were ground which prima facie justified the
reasonable belief. The facts that a large quantity of gold was recovered from
the appellant, that the authorities had precise information about the appellant
and that he was travelling without a ticket were sufficient to justify the
reasonable belief.
Section 167(8) of the Sea Customs Act
provided for the confiscation of any goods the importation of which was prohibited
or restricted if they were imported contrary to the prohibition or restrictions
For the confiscation of the goods it was not required that they should be
necessarily found with the person concerned with their importation.
867 Under s. 8(1) of the Foreign Exchange
Regulation Act, 1947, the Government of India issued a notification in 1948
which prohibited the bringing. into India of gold from outside except with the
general or special permission of the Reserve Bank. Section 23A of this Act
provided that the restrictions imposed under s.8 thereof shall be deemed to
have been imposed under s.19 of the Sea, Customs Act. Thus the 1948
notification had the force of a notification under s. 19 of the Sea Customs Act
and gold imported in contravention thereof was liable to be seized under s. 178
and rendered the gold liable for proceedings under s. 167(8). Since the gold
was smuggled gold in view of the statutory presumption under s.178A it was
properly confiscated under s. 167(8).
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 511 of 1960.
Appeal from the judgment and order dated March 20, 1959, of the Bombay High Court at Nagpur in Special Civil Application No. 322 of
1958.
A.S. Bobde, and Ganpat Rai, for the
appellant.
G.C. Mathur and P. D. Menon, for the
respondents.
1962. March 15. The Judgment of the Court was
delivered by GAJENDRAGADKAR, J.-On the 26th July, 1958, the Collector of
Central Excise, Nagpur, passed an order directing absolute confiscation of five
bars of gold weighing 290.6 Tolas found in the possession of the appellant
Pukhraj and imposing upon him a personal penalty of Rs. 25,000/under s. 167 (8)
of the Sea Customs Act, 1878 read with a. 19 of the said Act and s. 23-A of the
Foreign Exchange Regulation Act, 1947.
Aggrieved by the said order, the appellant
filed a writ petition in the High Court of Bombay at Nagpur under Arts.
226 and 227 of the Constitution on September 15, 1958. By this petition, the appellant claimed a writ of Certiorari or other
appropriate writ or order quashing the impugned order.
It was urged by him in support of his
petit-ion, inter alia, that s. 178A of the Sea 868 Customs Act was
unconstitutional in that it infringed the appellant's fundamental right under
Art. 19 (1) (1) and (g) of the Constitution. It was also. urged that on the
merits, the said impugned order was not justified by the relevant statutory
provisions of the Sea Customs Act read with the Foreign Exchange, Regulation
Act. The High Court rejected the appellants challenge to the validity of s.
178A and held that the order directing the confiscation of five bars of gold
was valid. The High Court, however, took the view that the direction issued by
the Collector of Central Excise imposing a personal penalty of Rs. 25,000/On
the appellant was invalid and so, the said direction was sot aside and a writ
issued in that behalf. The appellant then applied for and obtained a
certificate from the said High Court and it is with the said certificate that
he has come to this Court for challenging the correctness of the order passed
by the High Court by which the confiscation of gold in question has been held
to be valid.
The main point on which the certificate was
granted by the High Court to the appellant was in regard to the constitutional
validity of a. 178A. That question has, in the meanwhile, been decided by this
Court on September 25, 1961, in Civil Appeals Nos. 408 to 410 of 1960 and other
companion appeals. The judgment of the constitutional Bench dealing with those
appeals has upheld the validity of s.178A and so, the principal point which the
appellant wanted to raise before this Court is now concluded against him. For
the appellant, Mr. Bobde has, however, urged three other contentions before us
in support of his case that the confiscation of gold is not justified.
Before dealing with these contentions, it is
necessary to mention very briefly the relevant facts which led to the
confiscation of gold. The appellant 869 is a goldsmith by profession and owns a
gold and silver shop at Rajnandgaon in Madhya Pradesh. On October 25, 1956,
whilst he was travelling by the passenger train from Calcutta on the
CalcuttaNagpur route, he was searched at Raigarh railway station and found to
be in possession of five pieces of gold bullion weighing 290.6 tolas valued at
Rs. 29,835/approximately. The said gold was then seized by the Officer
concerned acting on a reasonable belief that' it was smuggled gold, and notice
was issued against the appellant on May 20, 1957, calling upon him to show
cause why action should not be taken against him for having contravened the
notification issued by the Government of India No. 12 (11)-F.1/48 dated August
26, 1948 under the foreign Exchange Regulation Act, 1947 read with s.23A of the
said Act and s.19 of the Sea Customs Act and punishable under item (8) of s.167
of the Sea Customs Act. The appellant sent a reply and thereupon, the Collector
of Central; Excise held an enquiry. At the enquiry the appellant appeared by
counsel and examined four witnesses in support of his plea that he was in
possession of gold Which belonged to him and which was not smuggled gold at
all.
Documentary evidence in the form of account
books was also produced by the appellant in sup. port of his plea. The
Collector of Central Excise disbelieved the evidence adduced by the appellant
and came to the conclusion that the presumption arising under s.178 of the Sea
Customs Act had not .been rebutted by the appellant and so, he proceeded to
pass the impugned order confiscating gold and imposing on the appellant a
personal penalty of Rs.25,000/-. It is in the light of these facts that the
three contentions raised by Mr. Bobde fall to be, considered in the present
appeal.
The first argument raised in support of the
appeal is that the confiscation of gold is not justified under s.167(8) because
it has been found by the 870 High Court that the appellant is not a person
concerned in the offence of importation of the said gold. It appears that in
dealing with the question as to whether the personal penalty imposed upon the
appellant is valid or not, the High Court has relied on two considerations. It
has held that the jurisdiction of the officer to impose a personal penalty was
confined to the imposition of a penalty only up to Rs.1000/-and no more, and in
support of this conclusion, the High Court relied on certain observations made
by this Court in F.N.Roy v. Collector of Customs, Calcutta(1). This question
has been recently considered by this Court in M/s.
Ranchhoddas Atmaram v. The Union of India(2)
and it has been held that the language in item (8) of s.167 is clear and it
permits the imposition of a penalty in excess of Rs.1000/and that must be given
effect to whatever may have been the intention in other provisions. So, it is
clear that the High Court was in error in taking the view that under section
167(8), it was not within the 'jurisdiction of the Collector of Central Excise
to impose a penalty exceeding Rs. 1000/-. The High Court has also held that the
appellant was not shown to have been concerned with the importation of the
smuggled gold, though he was found in possession of it and this finding,
according to the High Court, justified the conclusion that a personal penalty
could not be imposed on him. We are not called upon to consider in the present
appeal the correctness or propriety of this conclusion because there is no
appeal by the respondent Collector of Central Excise challenging this part of
the High Court's order. Basing himself on the finding of the High Court that
the appellant was not concerned in the importation of ,smuggled gold, Mr. Bobde
argues that even the goods cannot be confiscated under s.167(8). In our
opinion, this argument is clearly misconceived. Section 167(8) clearly
provides, inter alia, that if (1) [1957] S.C.R.1 151 at p.1158, (2) [1961] 3
S.C.R. 718.
871 any goods, the importation of which is
for the time being prohibited or restricted by or under Chapter IV of the Act,
be imported into India contrary to such prohibition or restriction, such goods
shall be liable to confiscation. If s.167(8) applies, then there can be no
doubt that as soon as it is shown that certain goods have been imported
contrary to the statutory prohibition or restriction, they are liable to
confiscation and the confiscation of the said goods is not based on the fact
that they are necessarily found with a person who was concerned with their
importation. Therefore, once s.167(8) is hold to be applicable, the validity of
the order directing the confiscation of the smuggled goods is beyond any
challenge.
The next question to consider is whether s.167(8)
applies to the facts of this case, and that takes us to the relevant
notification issued by the Government of India in 1948.
This notification imposed restrictions on
import of gold and silver and it has been issued under s.8(1) of the Foreign Exchange
Regulation Act, 1947. The effect of this notification, inter alia, is that
except with the general or special permission of the Reserve Bank, no person
shall bring or send into India from any place outside India any gold, coin gold
bullion. gold sheets or gold ingot, whether refined or not. Thus, bringing into
India gold from outside is prohibited by this notification unless the said gold
is brought with the general or special permission of the Reserve Bank. Section
23 of the said Act provides for penalty and procedure in respect of
contravention of its provisions and of rules, orders or directions issued
thereunder. Section 23-A provides that without prejudice to the provisions of
s. 23 or to any other provision contained in the said Act, the restrictions
imposed by sub-s.(1) and (2) of s. 8 shall be deemed to have been imposed under
s. 19 of the Sea Customs Act, and' all the provisions or that Act shall have
effect accordingly, except that 872 s. 183 thereof shall have effect as if for
the word "shall" therein the word ','may" was substituted. It
would, thus be noticed that the combined effect of the aforesaid provisions of
the two Acts and the relevant notification is that the notification of 1948 has
the force of a notification issued under s. 19 of the Sea Customs Act, and in
consequence, gold imported in contravention of the said notification is liable
to be seized under %. 1.78 of the said Act and renders the person in possession
of the said gold liable for proceedings under s.167(8) of the said Act; and
since the matter falls to be considered under the, relevant provisions of the Sea
Customs Act, s. 178A is also applicable. This position is not disputed.
Now s. 178A places the burden of proving that
the goods are not smuggled goods on the person from whose possession the said
goods are seized where it appears that the said goods are seized under the
provisions of the Sea Customs Act in the reasonable belief that they are
smuggled goods. Once it is shown that the goods were seized in the manner
contemplated by the first part of s. 178A, it would be for the appellant to
prove that the goods were not smuggled goods; and since it has been held by the
Collector of Central Excise that the appellant had not discharged the onus imposed
on him by s. 178A, the statutory presumption remained unrequited and so, the
goods must be dealt with on the basis that they are smuggled goods. As soon as
we reach this conclusion, it follows that under s. 167(8) of the Sea Customs
Act, the said goods are liable to confiscation.
That is the view taken by the High Court when
it rejected the appellants prayer for a writ quashing the order of confiscation
passed by the Collector of Central Excise in respect of the gold in question,
and we see no reason to interfere with it.
The next argument urged by Mr. Bobde 873 is
that certain witnesses whose evidence was recorded by the Collector of Central
Excise in the enquiry before him, were not produced for cross-examination by
the appellant. In our opinion, there is no substance in this argument. This
complaint relates to the evidence of Anwar, Marotrao and his brother Rambhau.
These three persons, it is alleged made their statements in the absence of the
appellant. It was, however, stated before the High Court by Mr. Abhyankar for
the department that Anwar was, in fact, examined in the presence of the
appellant's counsel and the appellant's counsel did not cross-examine him. This
statement was accepted by Mr. Sorabji who appeared for the appellant and so, no
valid complaint can be made that Anwar gave evidence in the absence of the
appellant and the appellant bad no opportunity to cross-examine him. Then, as
regards Marotrao and: Rambhau, their statements were intended to show that the
appellant's case that he had got the gold' melted through them was not true. At
the enquiry, the appellant gave up this stand and did not adhere to his earlier
version that the gold in question had been melted with the assistance of the
said two witnesses. Since it became unnecessary to consider that plea because
of the change of attitude adopted by the appellant, it was hardly necessary to
allow the appellant to cross-examine the said two witnesses. Their version on
the point was no longer inconsistent with the subsequent case set up by the
appellant. Therefore there is no substance in the argument that the enquiry
held by the Collector of Central Excise was conducted unfairly and the
procedure adopted at the said enquiry was inconsistent with the requirements of
natural justice. The last contention raised by Mr. Bobde was that there is
nothing on record to show that the seizure of gold from the appellant had been
affected by the officer concerned acting on a reasonable belief that the said
gold was smuggled. It would be 874 recalled that S. 178A of the Sea Customs Act
requires that before the burden can be imposed on the appellant to show that
the goods in question were not smuggled, it has to be shown that the goods had
been seized under the said Act and in the reasonable belief that they are
smuggled goods. The argument is that the question as to whether there was a
reasonable belief or not is justiceable, and since there is no material on the
record to show that the belief could have been reasonable, the statutory
presumption cannot be raised.
In our opinion, this argument is not
well-founded. There are two broad features of this seizure which cannot be ignored.
The first feature on which the officer relied is supplied by the quantity of
gold in question. It was found that the appellant was carrying on his person
five pieces of gold bullion 'weighing as much as 290.6 tolas. This large
quantity of gold valued at nearly Rs. 30,000/itself justified a reasonable
belief in the mind of the officer that the gold may be smuggled. In that
connection, it may not be irrelevant to remember that the said officer had
received positive information in the month of September, 1956, regarding the
smuggling of gold by the appellant.
That is why he was intercepted by the officer
on the 25th October, 1956, at the Raigarb railway station at 16.30 hours. Then
the other fact on which the reasonable belief can be founded is the suspicious
circumstances of the appellant's journey. The appellant was found travelling
without a Railway ticket and his explanation as to how he came to be. in the
said passenger train is obviously untrue.
A person carrying a, large quantity of gold
and found travelling without a ticket may well have raised a reasonable belief
in the mind of the officer that the gold was smuggled. The object of travelling
without a ticket must have been to conceal the fact that the appellant had
travelled all the way from Calcutta at which place the gold must 875 have been
smuggled. The story subsequently mentioned by the appellant about his journey
to Tatanagar which has been disbelieved brings into bold belief the purpose
which the appellant had in mind in travelling without a ticket.
After-all-, when we are dealing with a
question as to whether the belief in the mind of the Officer who effected the
seizure was reasonable or not, we are not sitting in appeal over the decision
of the said officer. All that we can consider is whether there is ground which
prima facie justifies the said reasonable belief. That being so, we do not
think there is any substance in the argument that the seizure was effected
without a reasonable belief and so is outside section 178A.
In the result, the appeal fails and is
dismissed with costs.
Appeal dismissed.
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