The burden of proving that the goods are not smuggled goods is on the person from whose possession they were seized.

Judgment

KAPUR, J. : This is an appeal by special leave against the judgment and order of the High Court of the Punjab and raises the constitutionality of S. 178A of the Sea Customs Act, 1878" (Act 8 of 1878) which has been held by this Court to be constitutional in the Collector of Customs, Madras v. N. Sampathu Chetty. 1962-1 SCJ 68:

2. At the time of arguments before us a further point was raised that in order that S. 178A of the Sea Customs Act may become applicable, the prosecution must further prove that the goods which were sought to be affected by the order of the Customs Officer were goods of foreign origin and there must be evidence in support of the reasonableness of the belief of the Customs Officer that the goods were smuggled goods. The question now sought to be raised was not agitated in any of the Courts below.

3. The appellant on February 11, 1958, when he was sitting in a third class compartment of the Amritsar Kalka train standing on Platform No. 5 of the Amritsar Railway Station, was searched by a Customs Official and some bars of gold were found tied round his waist. These gold bars were seized and a recovery memo was prepared. Out of these gold bars four were of base metal and the rest were of pure gold some bearing the stamp of Johnson Mathey and Co. Ltd., 995-10 tolas and 21/2 bars bore marks of N. M. Rothschild and Sons 10 tolas (990-1). No permit from the Reserve Bank to import this gold was produced by the appellant. Under the Foreign Exchange Regulation Act, 1947, the importation of gold without such permit is prohibited and such contravention is punishable under S. 23-A of the said Act read with S. 167(81) of the Sea Customs Act.

4. The appellant was prosecuted under S. 23A of the Foreign Exchange Regulation Act and S. 167 (81) of the Sea Customs Act and his defence was that he was not in possession of the gold bars which were taken from an attache case left by a stranger under the seat where he (the appellant) was sitting. The Additional District Magistrate held the offence to be proved and convicted the appellant of the offence and sentenced him to one year s rigorous imprisonment. An appeal to the Sessions Judge resulted in the reduction of the sentence to 8 months rigorous imprisonment. On Revision to the High Court the sentence was reduced to six months rigorous imprisonment. The appellant has come in appeal by special leave.

5. The trial Court accepted the testimony of the Customs Officials and held that the defence of the appellant was false and that gold worth about Rs. 14,000 was found his possession. The learned Sessions Judge in appeal also accepted the testimony of the Customs Officials and held the defence to be false and came to the conclusion that the gold was found in possession of the appellant. In the High Court the same plea was taken and was rejected.

6. For the first time in this Court it is contended that before the presumption under S. 178A can be made applicable, it must be proved by the prosecution that the goods were of foreign origin, i.e., had been imported from abroad and only then does the presumption under S. 178-A arise which relates only to the question of Customs duty having been paid. In other words the contention comes to this that the prosecution must first prove that the goods in dispute in a particular case have been imported from a foreign country and once that is proved the onus then will be on the person in whose possession the goods are found that he had paid the Customs duty. Apart from the fact that this question has never been raised, that its not the effect of S. 178A of the Sea customs Act which provides:-

"178A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.

(2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, ci