The confiscation of smuggled goods under Section 167(8) of the Sea Customs Act is justified, and the burden of proving that the goods are not smuggled lies on the person from whose possession they are seized, as provided under Section 178A of the Act.

Judgment

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 S. 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 the 15th September 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 petition, inter alia, that section 178A of the Sea Customs Act was unconstitutional in that it infringed the appellant s fundamental right under Art. 19(1) (f) 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 appellant s challenge to the validity of section 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 set 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.

2. The main point on which the certificate was granted by the High Court to the appellant was in regard to the constitutional validity of S. 178A. That question has, in the meanwhile, been decided by this Court on the 25th of September, 1961 in Collector of Customs v. N. Sampathu Chetty, 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 contentious before us in support of his case that the confiscation of gold is not justified.

3. Before dealing with these contentions, it is necessary to mention very briefly the relevant facts which led to the confiscation of gold. The appellant 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 Calcutta-cum-Nagpur 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 25-8-1948 under the Foreign Exchange Regulation Act, 1947 read with Section 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