IMPORTANT POINTS
1. If a recovery is made from the accused of any prohibited goods within the notified area then the statutory presumption u/s 138A of the Customs Act, would arise that he was knowingly concerned in the fraudulent evasion or attempted evasion of any duty chargeable on the goods in question.
2. Smuggling has become a threat to the effective fulfilment of the objectives of foreign trade control and any leniency therefore in economic offences will send a wrong signal.

Headnote:(i) Customs Act-Sections 11-K, 135(1)(a) and 138A-Presumption of culpable mental state-If recovery made from accused of prohibited goods within notified area-Statutory presumption would arise that he was knowingly concerned in fraudulent evasion or attempted evasion of any duty chargeable on goods.
       Held : If the prosecution establishes the aforesaid facts then there is no necessity of attracting the statutory presumption under Section 138A and without such presumption an accused can be convicted under Section 135(1)(a). But the legislature having found it difficult to establish the necessary ingredients of such evasion of duty or prohibitions and the economic offences having grown in proportion beyond the control, came forward with the presumption available under Section 138A of the Act. The main object of Section 138A is to raise a presumption as to culpable mental state on the part of the accused when he is prosecuted in a court of law. In other words, if a recovery is made from the accused of any prohibited goods within the notified area then the statutory presumption would arise that he was knowingly concerned in the fraudulent evasion or attempted evasion of any duty chargeable on the goods in question (Para 10)
       (ii) Customs Act-Sections 11-K, 135(1)(a) and 138A-Conviction for offence u/s 135(1)(a)-Appeal-Accused was found to be inside the vehicle from which silver ingots were recovered-Vehicle did not stop even though custom authorities signaled for stopping-Two Courts below disbelieved plea of accused about taking an innocent lift in the vehicle-Place from where recovery was made was a place within notified area u/s 11K-There being no transport voucher-Presumption u/s 138A having been rightly attracted-Accused failed to discharge burden to establish that he was in no ways connected with transport of silver ingots-Conviction recorded is legally sustainable-Sentence awarded by High Court is justified.
       Held : In view of large scale smuggling activities in the border area and large scale evasion of duty the country has faced severe economic imbalance. Notwithstanding stringent legislation having been made it has not been possible to eradicate the evil. Any leniency therefore in economic offences will send a wrong signal. In this view of the matter, we are unable to accept the last contention of Mr. K. Madhava Reddy, the learned senior counsel for the appellants. (Para 11)
       So far as Jayantilal is concerned the prosecution has been able to establish that the ten silver ingots hold the mark of Narandas Manordas and accused Jayantilal had purchased the said silver ingots from the Refinery of Narandas Manordas. The accused admitted the aforesaid fact and it was proved beyond reasonable doubt that he was last purchaser of said silver ingots. His plea that he converted the ingots into pieces and sold the same to his Brothers under Exhibits 18 to 72 has not been accepted either by the trying Magistrate or by the High Court. On elaborate discussion of the evidence on record the two courts below have affirmed that accused No. 3 was the owner of the seized silver ingots which was meant for transportation and illegal export and he was involved in committing the offence in question. No convincing argument has been advanced on his behalf to interfere with the findings and conclusions arrived at by the courts below and consequently we do not find any case warranting interference by this Court has been made out. (Para 12)

JUDGMENT

Pattanaik, J-Leave granted.

2. Both these appeals arise out of the same judgment of the Additional Chief Judicial Magistrate, Valsad dated 7th of May, 1982 in Criminal Case No. 60 of 1980 and therefore heard together and are being disposed of by this common judgment.

3. On the basis of a complaint filed by the customs authorities both these appellants stood charged of having committed the offences under Section 135(1)(a) of the Customs Act (hereinafter referred to as the Act ) on the allegation that on the date of occurrence they were found to be carrying silver without any transport voucher within the specified area which is duly notified under Section 11-K of the Act. The appellants denied their complicity and pleaded not guilty. The learned Additional Chief Judicial Magistrate convicted the appellants under Section 135 of the Act and sentenced them to undergo six months rigorous imprisonment and to pay a fine of Rs. 4,000/-, in default, to undergo further rigorous imprisonment of three months. Against the aforesaid conviction and sentence of the learned Additional Chief Judicial Magistrate the appellants preferred appeals to the court of Sessions and the State also preferred appeal for enhancement of sentence in the High Court. The customs authorities who were the complainant also invoked the revisional jurisdiction of the High Court being aggrieved by the inadequacy of the sentence. After admission of the State s appeal in the High Court, the appeals preferred by the accused - appellants were ordered to be transferred and accordingly all the appeals and revision were heard together and were disposed of by common judgment. The High Court dismissed the appeals filed by the accused - appellants and allowed the State s appeal and enhanced the sentence of rigorous imprisonment to two years and fine of Rs. 4,000/- so far as accused No. 2 is concerned and enhanced the sentence of rigorous imprisonment for two years and fine of Rs. 40,000/- and in default further rigorous imprisonment for three months so far as accused No. 3 is concerned. Thus the present appeals by special leave.

4. The prosecution case in nutshell is that the customs authorities had received secret information that certain contraband goods were likely to pass through the National Highway No. 8. The authorities, therefore, kept watch during the early hours of 5th August, 1973 around the Bhilad Customs Check Post. At about 8.30 a.m. a fiat car bearing R.T.O. Registration No. GJN 5953 came from Vapi side and proceeded towards Bombay side. The car was interpreted by the vigilance squad of the Customs department but nothing objectionable was found therefrom. The vehicle was allowed to pass. The appellant - Devchand Kalyan Tandel, who was accused no. 2, was one of the occupants in the said fiat car. The customs authorities thereafter suspected some foul play and then divided themselves in two groups, one group was sent on the way to Umbergaon and the other group was sent on the way to Sarigam. The further prosecution case is that while the second group was on its vigil, an ambassador car was found coming from Sanjan. When the vehicle was signaled to stop, it ignored the signal and proceeded straight towards Bhilad railway station and from there it took turn towards the underground bridge. The vigilance party chased the said car and when they found that the car is about to reach the National Highway, they took resort to firing and on hearing the sound of firing, the car stopped. The said ambassador car bore RTO Registration No. MRH 5042. The car was brought to the customs office at Bulsar and in presence of two witnesses a search was conducted. On search, ten silver ingots worth more than Rs. 1,90,000, weighing 293.300 kilograms were recovered from a secret cabinet in the hind portion of the car. Appellant - Devchand and the other accused who is not an appellant namely Ishwarbhai Gopalbhai Tandel were found to be in the car made their statements under Section 108

Click Here to Read the rest of this document

1996 Supreme(SC) 1218

Cases Referred (1)