Assistant Collector of Customs
(Preventive) Bombay Vs. Babu Miya Sheikh Imam & Ors [1983] INSC 86 (28 July
1983)
BHAGWATI, P.N.
BHAGWATI, P.N.
MISRA, R.B. (J)
CITATION: 1983 AIR 974 1983 SCR (3) 500 1983
SCC (3) 447 1983 SCALE (2)33
ACT:
Customs Act, 1962-Section 5(1) (a)(ii) -Scope
of.
Section 135(1)(a)(ii) of the Customs Act,
1962 provides that if any person "is in relation to any goods in any way
knowingly concerned in any fraudulent evasion or attempt at evasion of any duty
chargeable thereon or of any prohibition for the time being imposed under any
other law for the time being in force with respect to such goods", he
shall be punishable.
HEADNOTE:
In the reasonable belief that the respondents
were smuggling silver out of the country, the Customs officials apprehended the
respondents at about midnight while they were going in a fishing vessel off the
coast of Bombay and found 194 ingots of silver in the vessel. I hey were prosecuted
for offences under section 120-B Indian Penal Code, section 135(1) (a) (ii) of
the Customs Act, 1962, section 5 of the Imports and Exports (Control) Act, 1947
and section 23(1A) of the Foreign Exchange Regulations Act, 1973. While the
Magistrate found them guilty of all the offences the High Court on appeal set
aside the conviction under the Customs Act and Foreign Exchange Regulations
Act.
The appellant accepted the acquittal Under
section 23(1A) of the Foreign Exchange Regulations Act but impugned the
judgment of the High Court in so far as it set aside the conviction under
section 135 (1) (a) (ii) of the Customs Act.
It was contended on behalf of the prosecution
that the accused were knowingly concerned with fraudulent evasion or attempt at
evasion of the prohibition imposed under the Export Trade Control order of 1968
on the export of silver without licence and that therefore they were guilty of
an offence under the Customs Act.
The respondents, on the other hand, contended
that the words "with respect to such goods" occurring in the section,
refer to goods on which duty was chargeable as contemplated in the first part
of the section and since no duty was chargeable on export of silver it did not
fall within the words "with respect to such goods" and therefore
there was no fraudulent evasion or attempt at evasion of the prohibition on
export of silver without a licence imposed under the Export Trade Control order,
1968 issued under section 3 of the Imports and Exports (Control) Act, 1947,
which was punishable under the Customs Act.
501 Allowing the appeal,
HELD: Where goods are chargeable with duty
and any person is knowingly concerned in any fraudulent evasion or attempt at
evasion of such duty, the case would fall within the first part of the section,
but where a prohibition is imposed with respect to any goods under the Customs
Act, 1962 or any other law for the time being in force, then, irrespective of
whether duty is chargeable on such goods or not, any person who is knowingly
concerned in any fraudulent evasion or attempt at evasion of such prohibition,
would be covered by the second or third part as the case may be.
[506 E] In the instant case the Export Trade
Control order, 1968 issued under section 3 of the Imports and Exports (Control)
Act, 1947, prohibited the export of silver without a licence. On the facts
established by the prosecution the accused were knowingly concerned in
fraudulent evasion or attempt at evasion of such prohibition on export of
silver and their case was therefore covered by the third part of section
135(1)(a)(ii).
The provision enacted in section
135(1)(a)(ii) is divisible into three parts: the first part postulates that
goods in respect of which the offence is committed must be goods chargeable
with duty; the second and third parts are not concerned with the question
whether any duty is chargeable on the goods or not. They speak only of
fraudulent evasion or attempt at evasion of any prohibition for the time being
imposed under the Customs Act or any other law in force in respect of any
goods. What they contemplate is that in respect of goods in question there must
be a prohibition imposed under the Customs Act or any other law for the time
being in force irrespective of whether duty E is chargeable on such goods or
not and the accused must be concerned in any fraudulent evasion or attempt at
evasion of such prohibition. The prohibition fraudulently evaded or sought to
be evaded might be with respect to "any goods": it is not necessary
that it should be with respect to goods on which duty is chargeable. The
expression "with respect to such goods": had to be used at the end of
the section because the second and third parts start with the words "if
any person is in relation to any goods knowingly concerned in any fraudulent
evasion or attempt at evasion". The words "such goods" have
clearly reference to "any goods" at the commencement of the section.
These words are not descriptive of the kind
of goods to which the first part of the section is applicable. It is totally
impermissible on a plain, natural construction of the language used in the section
to read these words as importing the requirement that the goods must be
chargeable with duty in order to fall within the second or third part of the
section. [505 E, 506 A-D]
CRIMINAL APPELLATE JURISDICTION: Criminal
Appeal Nos. 416-18 of 1974.
Appeals by Special leave from the Judgment
and order dated the 23rd/24th August, 1973 of the Bombay High Court in Crl.
Appeal Nos. 68,298 & 510 of 1972.
502 N.C. Talukdar, C. V. Subba Rao and R.N.
Poddar for the Appellant.
O.P. Rana and M.N. Shroff for the State of
Maharashtra.
S.R. Srivastava for Respondent No. 1 in Crl.
A. 416.
The Judgment of the Court was delivered by
BHAGWATI, J. These appeals by special leave are directed against a common
judgment dated 27th August 1973 passed by a single e Judge of the High Court of
Bombay in so far as it acquitted the first respondent in Criminal Appeal No.
146 of 1978 respondent No. 1 and 2 in Criminal Appeal No. 147 of 1974 and the
first respondent in Criminal Appeal No. 418 of 1974 (hereinafter referred to as
the accused) of the offence under Section 135 (1)(a)(ii) of the Customs Act,
1965. The entire controversy between the parties in these appeals turns on the
true interpretations of section 135 (1) (a) (ii) and it is therefore not
necessary to set out the facts in detail, but in order to appreciate how the
question arises for consideration we may briefly reproduce a few relevant
facts.
On 9th June 1968 at about 2 p.m. Shri Mugve,
the Assistant Collector of Customs, who was then Principal Appraisar in the
Directorate of Revenue Intelligence, Bombay, received information that a
fishing vessel was going to load silver at Ghas Bunder after 9 p.m. On that day
and it was going to take the silver to a spot near Khanderi island in order to
put it on an Arab Dhow for despatching it to Dubai. On receipt of this
information, Shri Mugve kept a watch in a privately owned motor launch in the
stream near Ballard Pier about four miles away from the shore. At about 11 p.m.
Shri Mugve and the other customs officers accompanying him noted that a heavily
loaded fishing vessel was proceeding towards the Khanderi island without
navigational lights. They immediately chased the fishing vessel and asked the
crew to stop it but instead of stopping the crew increased the speed and tried
to run away. The fishing vessel was chased and eventually it was intercepted by
Shri Mugve and the other customs officers. On being questioned the Tindel of
the fishing vessel made a statement that 194 ingots of silver of the value of
Rs. 92 lakhs were being taken towards Khanderi island for being loaded on an
Arab Dhow which was going to Dubai. The fishing vessel was thereupon towed to
Ballard Pier and 194 ingots of silver found in it were seized under a Panchnama
in the reasonable belief 503 that they were being smuggled out of India. The
accused who were in the fishing vessel were also prosecuted in the Court of
Additional Chief Presidency Magistrate 5th Court Dadar for offences under
Section 120 of the Indian Penal Code, Section 135 (1) (a) (ii) of the Customs
Act 1962, Section 5 of the Imports and Exports (Control) Act 1947 and Section
23 (1 A) of the Foreign Exchange Regulation Act 1973. The Additional Chief
Presidency Magistrate found the accused guilty of all the offences charged
against them and sentenced them to various terms of imprisonment including
fine. The accused there upon preferred three appeals in the High Court of
Bombay against the order of conviction and sentence passed against them by the
Additional Chief Presidency Magistrate. These appeals were heard by a single
Judge of the High Court and by a common Judgment dated 27th August 1973 the
learned single Judge confirmed the conviction of the accused under Section 120
of the Indian Penal Code and Section 5 of the Imports and Exports (Control) Act
1947 but set aside the conviction under Section 135 (1) (a) (ii) of the Customs
Act 1962 and Section 23 (1 A) of the Foreign Exchange Regulation Act 1973. The
Assistant Collector of Customs accepted the judgment of the learned single
Judge in so far as it acquitted the accused of the offence under Section 23 (1
A) of the Foreign Exchange Regulation Act 1973 but he was aggrieved by that
part of the judgment which set aside the conviction under Section 135 (1) (a)
(ii) of the Customs Act 1962 and he accordingly preferred the present three
appeals with special leave obtained from this Court.
Before we set out the rival arguments
addressed before us, it would be convenient to reproduce Section 135 (1) (a)
(ii) of the Customs Act 1962. That section reads as follows:
135. Evasion of duty or prohibitions-(1)
Without prejudice to any action that may be taken under this Act, if any
person- (a) is in relation to any goods in any way knowingly concerned in any
fraudulent evasion or attempt at evasion of any duty chargeable thereon or of
any prohibition for the time being imposed under this Act or any other law for
the time being in force with respect to such goods, he shall be punishable- 504
(ii) in any other case, with imprisonment for a term which may extend to (three
years) or with fine, or with both.
The argument of the prosecution was that on
the facts proved in the case the accused were knowingly concerned in fraudulent
evasion or attempt at evasion of the prohibition on the export of silver
without a licence imposed under the Export Trade Control order 1968 issued by
the Central Government under section 3 of the Imports and Exports (Control) Act
1947 and they were therefore guilty of the offence falling under section 135
(1) (a) (ii) which makes it penal if any person "is in relation to any
goods in any way knowingly concerned in any fraudulent evasion or attempt at
evasion of any prohibition for the time being imposed under any other law for
the time being in force with respect to such goods." This argument was
sought to be met on behalf of the accused by contending that the words
"with respect to such goods" occurring at the end of Section 135 (1)
(a) (ii) referred to goods on which duty was chargeable as contemplated in the
first part of that section and since no duty was chargeable on export of
silver, it did not fall within the words "with respect to such goods"
and hence fraudulent evasion or attempt at evasion of the prohibition on export
of silver without a licence imposed under the Export Trade Control order 1968
issued under section 3 of the Imports and Exports (Control) Act 1947 was not
punishable under section 135 (1) (a) (ii). It was this contention urged on
behalf of the accused which appealed to the learned single judge of the High
Court of Bombay and resulted in the acquittal of the accused. The sole question
which therefore arises for consideration on these rival arguments is as to what
is the true meaning of the expression "with respect to such goods'. Is it
limited only to goods falling within the first part of section 135 (1) (a)
(ii), that is goods on which duty is chargeable or does it refer to any goods
in respect of which prohibition is imposed under the Customs Act 1962 or any
other law for the time being in force. The answer to this question does not in
our opinion admit of any doubt, because the language of section 135 (1) (a)
(ii) is clear and explicit and one has merely to read the words of the section
according to their plain grammatical construction to come to the conclusion
that the view taken by the M learned single Judge of the High Court is plainly
erroneous. We proceed to give our reasons for saying so, but we may point out
straightway that this view taken by the learned single judge of 505 the High
Court has been subsequently overruled by a Division Bench of the same High
Court in the State of Maharashtra v. Kassam(1).
If we analyse and break up the provision
enacted in section 135(1) (a) (ii), it will be clear that structurally it is
divisible into three parts, namely:
1. If any person is in relation to any goods
in any way knowingly concerned in any fraudulent evasion or attempt at evasion
of any duty chargeable thereon, he shall be punishable with imprisonment for a
term which may extend to three years or with fine or both.
2. If any person is in relation to any goods
in any way knowingly concerned in any fraudulent evasion or attempt at evasion
of any prohibition for the time being imposed under the Customs Act 1962 with
respect to such goods, he shall be punishable with imprisonment for a term
which may extend to three years or with fine or both.
3. If any person is in relation to any goods
in any way knowingly concerned in any fraudulent evasion or attempt at evasion
of any prohibition for the time being imposed under any other law for the time
being in force with respect to such goods, he shall be punishable with imprisonment
for a term which may extend to three years or with fine or both.
The ingredients of the offence under section
135(1) (a) (ii) would clearly be satisfied if the case falls within any one of
these three parts. Each of these three parts is distinct and independent of the
other two and whether a case falls within any one part or not has to be judged
by reference to the ingredients of that part and not of any other part. The
ingredients of one part cannot be projected in the other two parts. The first part
deals with a case where in relation to any goods a person is knowingly
concerned in any fraudulent evasion or attempt at evasion of any duty
chargeable on such goods. Obviously, therefore, the first part. postulates that
the 506 goods in respect of which the offence is committed must be goods
chargeable with duty. But the second and third parts are not concerned with the
question whether any duty is chargeable on the goods or not. These two parts
speak only of fraudulent evasion or attempt at evasion of any prohibition for
the time being imposed under the Customs Act 1962 or any other law for the time
being in force in respect of any goods. What these two parts contemplate is
that in respect of the goods in question there must be a prohibition imposed
under the Customs Act 1962 or any other law for the time being in force it
being totally irrelevant whether duty is chargeable on such goods or not, and
the accused must be knowingly concerned in any fraudulent evasion or attempt at
evasion of such prohibition. The prohibition fraudulently evaded or sought to
be evaded may be with respect to "any goods" and it is not necessary
that it should be with respect to goods on which duty is chargeable. The
expression "with respect to such goods" had obviously to be used at
the end of the section because the second and third parts of the section start
with the words "if any person is in relation to any goods .... knowingly
concerned in any fraudulent evasion or attempt at evasion". The words
"such goods" have clearly reference to "any goods" at the
commencement of the section. These words are not descriptive of the kind of
goods to which the first part of the section is applicable.
It is totally impermissible, on a plain
natural construction of the language used in section, to read these words as
importing the requirement that the goods must be chargeable with duty in order
to fall within the second or third part of the section.
We are therefore of the view that where goods
are chargeable to duty and any person is knowingly concerned in any fraudulent
evasion or attempt at evasion of such duty, the case would fall within the
first part of the section, but where there is a prohibition imposed with
respect to any goods under the Customs Act 1962 or any other law for the time
being in force, then, irrespective of whether duty is chargeable on such goods
or not, any person knowingly concerned in any fraudulent evasion or attempt at
evasion of such prohibition, would clearly be covered by the second or third
part as the case may be. Here there was clearly a prohibition on export of
silver without a licence, imposed by the Export Trade Control order 1968 issued
under section 3 of the Imports and Exports (Control) Act 1947 and on the facts
established by the prosecution-facts which could not be and were not
disputed-the accused were knowingly concerned in fraudulent evasion or attempt
507 at evasion of such prohibition on export of silver and their case was
therefore plainly and indubitably covered by the third part of section A 135(1)
(a) (ii). The learned single Judge of the High Court was consequently in error
in taking the view that the accused were not guilty of the offence charged
under 135(1) (a) (ii).
We accordingly allow these appeals preferred
by the Assistant Collector of Customs, set aside the order of acquittal passed
by the learned single Judge of the High Court and restore the order passed by
the Additional Chief Presidency Magistrate convicting the accused under section
135(1) (a) (ii) of the Customs Act 1962 and sentencing them to various terms of
imprisonment and fine.
P.B.R. Appeals allowed.
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