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1956 Supreme(Cal) 116
HIGH COURT OF CALCUTTA
Sinha
SHERMAL JAIN - Appellant
Versus
COLLECTOR OF CENTRAL EXCISE AND LAND CUSTOMS, CALCUTTA - Respondent
Matter 60 Of 1955
Decided On : JULY 05, 1956
The provisions of the Land Customs Act, Sea Customs Act, and Foreign Exchange Regulation Act can be read together to prohibit the import of gold without a valid permit, and the Collector of Central Excise and Land Customs had the jurisdiction to take cognizance of a contravention of the Foreign Exchange Regulation Act.
Headnote:
LAND CUSTOMS ACT - IMPORTATION OF GOLD - CONFISCATION - VALIDITY - FOREIGN EXCHANGE REGULATION ACT - APPLICATION - JURISDICTION OF LAND CUSTOMS OFFICER - SHOW CAUSE NOTICE - PARTICULARS OF OFFENCE - CONFISCATION OF TAINTED GOODS - PENALTY.
Fact of the Case:
Gold bars were sent from Agartalla to Calcutta via post, falsely declared as "handloom cloth." Customs authorities suspected contraband and obtained a court order to deliver the parcels to them. The consignees denied receiving the parcels, and the petitioner, the owner of the gold, claimed it was for making ornaments and was sent to Calcutta to pay off debts. A show cause notice was issued to the petitioner under the Land Customs Act, Sea Customs Act, and Foreign Exchange Regulation Act, alleging contravention of various provisions and proposing confiscation of the gold.
Finding of the Court:
The Collector of Central Excise and Land Customs, Calcutta, held that the gold was imported into India from Pakistan in contravention of the law and ordered its confiscation under Section 167 (8), Sea Customs Act read with Section 183 and Section 23a, Foreign Exchange Regulation Act.
Issues: 1. Whether the inter-mixture of Land Customs Act, Sea Customs Act, and Foreign Exchange Regulation Act was illegal, and the Collector had no authority to take cognizance of a contravention of the Foreign Exchange Regulation Act. 2. Whether the onus of proof was on the customs authorities to prove that the gold came from Pakistan, and whether the petitioner had satisfactorily accounted for the origin of the gold. 3. Whether there was a violation of the rules of natural justice, and the petitioner did not have adequate opportunity to meet the case against him.
Ratio Decidendi: 1. The Land Customs Act incorporates the provisions of the Sea Customs Act, including Section 167 (8), which deals with confiscation of prohibited or restricted goods. Section 19 of the Sea Customs Act, which prohibits the import or export of certain goods, is deemed to have been imposed under Section 19 of the Sea Customs Act by the Foreign Exchange Regulation Act. Therefore, the importation of gold without a valid permit violates not only the Foreign Exchange Regulation Act but also the Sea Customs Act and the Land Customs Act. 2. The onus of proof is on the petitioner to prove that the gold was not contraband, as per amendments to the Sea Customs Act and Land Customs Act. The petitioner failed to provide a satisfactory explanation for the origin of the gold, and the circumstances surrounding the shipment of the gold indicated that it was contraband. 3. The petitioner was given ample opportunity to present his case, including producing evidence, witnesses, and having his goldsmith examine the gold. There was no violation of the rules of natural justice.
Final Decision: The rule issued against the order of confiscation was discharged, and the interim orders were vacated. There was no order as to costs.
( 1 ) THE facts in tills case are shortly as follows: some time in March 1954, the Customs authorities obtained information that two insured parcels which were declared as containing "handloom cloth", then lying at the Calcutta General Post Office, contained contraband goods. A batch of C. P. C. , officers went to the post office and requested the postal authorities to deliver the parcels to the consignee in the presence of the officers. But no consignee turned up, and ultimately the two parcels were handed over to the customs authorities by order of the Chief Presidency Magistrate, Calcutta. The first insured Parcel No. 120 was despatched by one P. B. Deb from Agartalla post office to Messrs. Sell Abu Backer and Co. of 58, Lower Circular Road, Calcutta. The second insured Parcel No. 77 was despatched by Section N. Ghosh from Agartalla Bazar post office, to Messrs. Md. Abu Backer and Co. of 65/11-12, Lower Chitpore Road, Calcutta. Upon being opened, the first was seen to contain 11 pieces of gold bars weighing 188, 5/8 tolas and the second one was seen to contain 9 pieces of gold bars weighing 199, 1/2 tolas. According to the information obtained by the customs authorities, there exists a widespread system of smuggling gold from Eastern Pakistan via Agartalla. The circumstances under which this gold was sent, induced the authorities to think that the gold was contraband. I may mention here that the value of the gold which had been sent under the false description of "handloom cloth', would be in the neighbourhood of Rs. 30,000/-, and that Agartalla is not a normal source of supply of gold to the Calcutta market. The authorities first contacted the consignees in Calcutta by serving show cause notices upon them. Messrs Md. Abu Backer and Co. of 65/11-12 Lower Chitpore Road absolutely disclaimed all responsibility in the matter, stating that no insured parcel was receivable by them from Agartalla Bazar and they knew nothing about it. The other firm, Sell Abu Backer and Co. , stated that one Shermal Jain, proprietor of Mahabir Stores, Agartalla (petitioner in this case) happened to be their customer. He told them that he was temporarily going out of Calcutta and requested them to receive a parcel on his behalf, but they disclaimed knowing anything about the contents. Next, Shermal Jain the petitioner herein, was contacted. He claimed ownership of the gold bars and stated that Section N. Ghosh and P. B. Deb were employees attached to his, firm Mahabir Stores at Agartalla. They had sent the gold bars, declaring them to be 'handloom cloth' in order to please their employer and save postage.
( 2 ) AS regards the gold, the story made out was as follows: 240 tolas 2 annas of gold was purchased by the petitioner from one Sri Motilal Deb Nath of Agartalla and 150 tolas 6 annas of gold was purchased by the petitioner from Messrs. Joy Banker Raiyya Guru of Calcutta. Motilal Deb Nath of Agartalla is a farmer and land owner at Agartalla. Messrs. Joy Sanker Rajyya Guru of Calcutta were dealers in gold. It was alleged that the petitioner wanted the gold for making ornaments. The petitioner did produce two receipts from the alleged sellers. The reason why the gold was sent back to Calcutta is as follows;
( 3 ) IT is said that a theft took place at the petitioner's shop at Agartalla involving a sum of Rs. 13,270/- and that heavy sums of money were due to different creditors in his business at the time, and that moneys were due from the consignees, who were creditors. The gold was sent down to Calcutta for the purposes of liquidating the debts. A definite case was made that the petitioner owed Rs. 8,000/- to Sell Abu Backer and Rs. 5,000/- to Md. Abu Backer and Co. and that it was proposed to pay off these debts as also others, after selling the gold. Both Messrs. Sell Abu Backer and Md. Abu Backer and Co. , have denied that any money is due from the petitioner to them. 3. On or about 25-5-1954 a show cause notice was served on the pet
