1. Seizure of gold and silver items — Confiscation and penalty under Sea Customs Act and Land Customs Act — Dispute over import timing and bona fide purchase. (Para 2 )
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1960 Supreme(SC) 235
SUPREME COURT OF INDIA
3rd October 1960.
B.P. SINHA, C.J.I., J.L. KAPUR, P.B. GAJENDRAGADKAR, K. SUBBA RAO AND K.N. WANCHOO, JJ.
Amba Lal, Appellant
Versus
Union of India and others, Respondents.
Civil Appeal No. 153 of 1956.
Advocates Appeared
Mr. Veda Vyasa, Senior Advocate, (M/s. S. K. Kapur, K. K. Jain and Ganpat Rai, Advocates, with him), for Appellant; Mr. H. N. Sanyal, Addl. Solicitor-General of India (M/s. H. R. Khanna and T. M. Sen, Advocates, with him) for Respondents.
Advocates:
GANPAT RAI, H.N.SANYAL, H.R.KHANNA, K.K.JAIN, S.K.KAPOOR, T.M.SEN, Veda Vyasa
GANPAT RAI, H.N.SANYAL, H.R.KHANNA, K.K.JAIN, S.K.KAPOOR, T.M.SEN, Veda Vyasa
In customs proceedings, which are penal in character, the burden of proof lies on the authorities to establish the offence. This burden does not shift to the accused under the principle of special knowledge, and authorities cannot impose import duty conditions for releasing confiscated goods.
Headnote:(A) Sea Customs Act, 1924 - Sections 167(8), 178A and 183; Land Customs Act, 1924 - Sections 4, 5 and 7; Evidence Act, 1872 - Section 106 - Onus of proof in customs proceedings - Although a customs officer is not a judicial tribunal and proceedings are not formal prosecutions, the relevant provisions of the Sea Customs Act and Land Customs Act are penal in character - Fundamental principles of criminal jurisprudence and natural justice must apply - The burden of proof lies on the customs authorities to establish the guilt of the person alleged to have committed an offence by adducing satisfactory evidence - The onus does not shift to the accused simply because certain facts are within their special knowledge, as the burden on the prosecution generally does not shift. (Paras 4, 5 and 8)
(B) Land Customs Act, 1924 - Section 7(1)(c) - Penalty for keeping smuggled goods - A person who, knowing that any goods have been smuggled into the country, keeps or conceals such goods is liable to a penalty. (Para 11)
(C) Jurisdiction of Customs Authorities - The Collector of Customs has no jurisdiction to impose conditions, such as the payment of import duties and other charges, as a prerequisite for the release of confiscated goods. (Para 12)
Facts of the case:
Certain articles, including gold and silver bullion, were seized from the house of a resident. The resident claimed that some items were brought from a foreign territory before the establishment of a customs barrier and others were purchased bona fide. The customs authorities confiscated all items, imposed a penalty, and required the payment of import duties and other charges before the goods could be released from customs control.
Findings of Court:
The confiscation of items claimed to have been brought into the country before the customs barrier was set aside because the authorities failed to discharge the burden of proof. The confiscation of items admitted to be smuggled was upheld. The penalty imposed for keeping smuggled goods with knowledge of their origin was held to be valid. However, the condition requiring the payment of import duties for the release of the goods was deleted as it exceeded the Collector's jurisdiction.
Issues: Whether the burden of proof in customs proceedings lies on the accused or the authorities; whether a person who keeps smuggled goods with knowledge of their status is liable for penalty; and whether the Collector of Customs has the jurisdiction to impose conditions for the release of confiscated goods.
Ratio Decidendi: Customs proceedings are penal in nature; therefore, the burden of proof rests on the authorities to prove the offence. The principle of special knowledge under Section 106 of the Evidence Act cannot be used to undermine the rule that the burden of proof remains with the prosecution. Additionally, the Collector lacks the legal authority to mandate the payment of import duties as a condition for the release of confiscated goods.
Result: Appeal partly allowed.
Legal Category Hierarchy
- customs law
- administrative law
- constitutional law
Table of Contents
2. Onus of proof for import — Applicability of Section 106, Evidence Act — Liability for penalty upon purchase of smuggled goods — Jurisdiction to impose release conditions. (Para 4 , 5 , 11 , 12 )
3. Customs proceedings are penal — Fundamental principles of criminal jurisprudence apply — Burden of proof rests on authorities — Statements used without providing copies are unreliable. (Para 5 , 9 )
4. In penal customs proceedings, the burden of proof lies on the authorities to establish guilt; Section 106, Evidence Act does not shift this primary burden. (Para 5 , 8 )
5. Appeal partly allowed — Confiscation of items 1-5 set aside — Confiscation of items 6-10 and penalty upheld — Release conditions deleted — Liberty to seek redemption reduction. (Para 8 , 10 , 11 , 12 , 13 , 14 )
6. Who bears the burden of proof in proceedings under the Sea Customs Act and Land Customs Act?
Since the relevant provisions of these Acts are penal in character, the fundamental principles of criminal jurisprudence and natural justice apply. Consequently, the burden of proof is on the customs authorities to establish the guilt of the person alleged to have committed the offence by adducing satisfactory evidence. (Para 5 )
7. Does Section 106 of the Evidence Act shift the burden of proof to the accused in penal customs proceedings?
No. The principle that a person must prove a fact especially within their knowledge cannot be used to undermine the well-established rule of law that, save in exceptional cases, the burden of proof remains with the prosecution and does not shift. (Para 8 )
8. Is a person liable for a penalty if they keep smuggled goods knowing they were imported in contravention of the law?
Yes. Under Section 7(1)(c) of the Land Customs Act, any person who, knowing that any goods have been smuggled (passed or conveyed in contravention of the law), keeps or conceals such goods is liable to a penalty. (Para 11 )
9. Does a Collector of Customs have the jurisdiction to impose conditions, such as payment of import duties, for the release of confiscated goods?
No, the Collector of Customs does not have the jurisdiction to impose conditions, such as the payment of proper customs duties and other charges, as a prerequisite for the release of confiscated goods. (Para 12 )
Judgment
SUBBA RAO, J. : This appeal by certificate is directed against the order of the High Court of Judicature of the State of Punjab dismissing the petition filed by the appellant under Art. 226 of the Constitution.
2. The facts giving rise to this appeal may be briefly stated. The appellant is at present a resident of Barmer in the State of Rajasthan. But before 1947 he was living in a place which is now in Pakistan. On June 22, 1951, the Deputy Superintendent. Land Customs Station, Barmer, conducted a search of the appellants house and recovered therefrom the following ten articles :
Articles seized. Weight. Estimated Value.
Rs.
1. Silver slab 2600 tolas. 5,200/-
2. 29 Sovereigns (King Ed. VII). 2,262/-
3. 9 pieces of gold bullion. 201 tolas and 9 mushas. 22,193/-
4. 4 pieces of silver bullion. 114 tolas. 230/-
5. Uncurrent silver coins numbering 575. 865/-
6. Gold bars. 49 tolas and 9 mushas. 5,475/-
7. 255 Phials of liquid gold. 9,875/-
8. Torches 23.}
9. Playing cards 3 Dozens.}
10. Glass beads 48 packets.} 400/
_______
Total ... 46,500/-
On July 14, 1951, the Assistant Collector, Ajmer, gave notice to the appellant to show cause and explain why the goods seized from him should not be confiscated under S. 167(8) of the SEA CUSTOMS ACT and S. 7 of the LAND CUSTOMS ACT . The appellant in his reply stated that items 1 to 5 supra were brought by him from Pakistan after the partition of the country in 1947 and that items 6 to 10 were purchased by him bona fide for value in Barmer. On October 27, 1951, the appellant appeared before the Collector of Central Excise, who made an inquiry, and admitted before him that items 6 to 10 were smuggled goods from Pakistan, but in regard to the other items he reiterated his plea that he originally brought them from Pakistan in the year 1947. The Collector of Central Excise held that the appellant had failed to establish that items 1 to 5 had been brought by him to India in the year 1947 and he also did not accept the plea of the appellant in regard to items 6 to 10 that he was a bona fide purchaser of them. In the result he held that all the goods were imported into India in contravention of (i) S. 3 of the Import Export Control Act read with Ss. 19 and 167(8) of the SEA CUSTOMS ACT , (ii) Ss. 4 and 5 of the LAND CUSTOMS ACT read with S. 7 thereof. He made an order of confiscation of the said articles under S. 167(8) of the SEA CUSTOMS ACT & S. 7 of the LAND CUSTOMS ACT ; but under S. 183 of the SEA CUSTOMS ACT he gave him an option to redeem the confiscated goods within four months of the date of the order on payment of a sum of Rs. 25,000. In addition he imposed a penalty of Rs. 1,000 and directed the payment of import duty leviable on all the items together with other charges before the goods were taken out of customs control. Aggrieved by the said order, the appellant preferred an appeal to the Central Board of Revenue. The Central Board of Revenue agreed with the Collector of Central Excise that the onus of proving the import of the goods in question was on the appellant. In regard to items 1 to 5, it rejected the plea of the appellant mainly on the basis of a statement alleged to have been made by him at the time of seizure of the said articles. In the result the appeal was dismissed. The revision filed by the appellant to the Central Government was also dismissed on August 28, 1953. Thereafter the appellant filed a writ petition under Art. 226 of the Constitution in the High Court of Punjab but it was dismissed by a division bench of the High Court on November 3, 1954. Hence this appeal.
3. It would be convenient to deal with this appeal in two parts-one in regard to items 1 to 5 and the other in regard to items 6 to 10.
4. The decision in regard to items 1 to 5 turns purely on the question of onus. The Collector of Central Excise as well as the Central Board of Revenue held that the onus of proving the import of the goods lay on the appellant. There is no evidence adduced by t
