JUDGMENT - (1) This is a petition under Article 226 of the Constitution challenging the validity of an order dated April 20th, 1959 whereunder the respondent No. 1 inter alia directed the petitioner No. 1 to pay penalty of Rs. 10.000/- and petitioner No. 2 to pay penalty of Rs. 1,000/- under the provisions of sub-section (8) of Section 167 of the Sea Customs Act.

(2) Though there are several allegations in the petition at the trial the petitioner has proceeded on the footing that he admits the correctness of findings as to facts as mentioned in the impugned decision. those facts are as follows:

(3) Prior to April 10, 1958 one Shankarlal was in possession of two slabs f gold which were smuggled into India. It was arranged on behalf of Shankarlal that these to slabs of gold wshould be melted at the shop of the 1st petitioner who carries on business of running a metal melting workshop near Mumbadevi Post Office at Bombay. It was arranged that the 1st petitioner should send his employee to take delivery of these two slabs of gold at the shop of Messrs. B. Mohanlal and Co. at Jambli Moholla. In accordance with the arrangement the 1st petitioner deputed the 2nd petitioner to receive these two slabs of gold. One Shivlal who is know to both Shankrlal and the petitioners at the shop of Messrs. B. Mohanlal and Co. delivered these two slabs of gold to the 2nd petitioner who brought the same to the shop of the 1st petitioner. Whilst these two slabs were about to be melted in the shop of the 1st petitioner, under a search warrant the same were seized. Both the petitioners thereafter made certain statements to the nvestigating officers.

In his statement the 1st petitioner divulged the aforesaid facts and also stated that Shankarlal through his two associates (1) Shivlal and (2) Jamnadas Bhikabhai used to send smuggled gold for melting at the shop of the 1st petitioner. On receiving information, the 1st petitioner in accordance with the arrangement made used to depute the 2nd petitioner for receiving delivery of the smuggled gold at the shop of Messrs. B. Mohanlal and Co. The gold used to be delivered to the 2nd petitioner by Shivlal or Jamnadas. The gold was melted in the shop of the 1st petitioner and returned to Shivlal or Jamnadas at the shop of Messrs. B. Mohanlal and Co. for being delivered to Shankarlal. He admitted that he used to do this work of melting for Shankarlal since after Divali 1957 nd that he had done it for Shankarlal for about 20 occasions He also admitted that in respect of moneys received by him for these services rendered and the gold received he never made any entries in his books of account. The 2nd petitioner also admitted these facts and that he had been several times deputed for the purpose of receiving and returning delivery of the smuggled gold and that for each such trip he was being paid Rs. 10/- by Shankrlal or by Shivlal. He also admitted that he was aware that the gold in question used to be smuggled gold.

(4) On these facts the respondent No. 1 has made a finding that the petitioners were liable to pay penalty of fine as mentioned in Section 167(8) of the Sea Customs Act.

(5) In the petition the petitioners have raised several contentions but Mr. Dalal for the petitioners informed me that he was raising only two contentions at the hearing, viz., that on the facts as found by the 1st respondent in his decision he had no jurisdiction to levy any penalty against the petitioners and that accordingly the order was altogether without jurisdiction. For that contention he has placed reliance on the phraseology of Section 167(8) of the Act.

(6) His second contention was that the investigation was under the Land Customs Act, 9 of 1924 and that the restrictions as imposed under Section 19 of the Sea Customs Act were not applicable to any proceedings under the Land Customs Act and therefore also the 1st respondent had no jurisdiction to levy the penalty as he had done. On hearing arguments of Mr. Dalal in support of his fi

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