The main legal point established in the judgment is the requirement for the prosecution to prove possession, knowledge, and compliance with legal procedures, and the consequences of non-compliance with mandatory provisions of the Customs Act.

1. This appeal is by the Assistant Collector of Customs, Preventive Department, Customs House, Cochin. He was the complainant in S.C.1641 of 1968 on the file of the Sub Magistrate's Court, Ernakulam. The complaint was filed by him, alleging that the accused Pratap Rao Sait of Broadway, Ernakulam, commi¬ted offences punishable under S.135 of the Customs Act (Central Act 52 of 1962). It was alleged that smuggled gold was secreted by the accused in his premises. Door No.XVI/644 and 645, Broadway, Ernakulam, and on getting that information, the Assistant Collector of Customs issued an authorisation to the Preventive Inspector, Customs Office, Cochin (Pw 4) to conduct search of the accused's premises. Accordingly, Pw 4 and party conducted a search, and recovered M.Os. I to III (M.O. I, a tin, No. II two gold bars, and No. III gold sovereigns 17 in number) from Door No, XVI/64- The gold bars and sovereigns were kept in a tin concealed in a hole inside the chimney which was plugged with a loose brick. Ext. P1, the search list was prepared, giving a copy of it to the accused. The accused's statement (Ext.P3) was also taken. After that the person of the accused was also searched, and Ext. P4 report was made by Pw 4 to the Assistant Collector of Customs. The latter issued a show cause notice to the accused, and confiscated the articles as contraband articles. The Collector of Customs then issued sanction to prosecute the accused, and the case was accordingly charged before the Magistrate. The learned Magistrate convicted the accused under S.135(b)(ii) of the Customs Act (in short the Act) and sentenced him to Simple Imprisonment for two months, and a fine of Rs. 300/- which was set aside in appeal by the District Magistrate. The complainant has, therefore, come up in appeal against acquittal.

2. Learned appellate Magistrate has entered the acquittal mainly on the ground that the prosecution did not succeed in proving accused's possession of the articles. The search and recovery of the articles was also held to be illegal Learned counsel for the appellant was at pains to show that the search and seizure was legal and according to the rules. Learned counsel for the accused on the other hand in supporting the order of acquittal, pointed out that the findings entered by the learned appellate Magistrate on some of the other points arising in the case, require reconsideration at the hands of this Court. He stated that the elements contemplated in S.123 of the Act which have important bearing in casting burden of proof, have been approached by the learned Magistrate from a wrong angle. He stated also that the prosecution has not succeeded in proving that M. Os 2 and 3 are foreign gold, that the accused acted with the knowledge that they are foreign gold, and that Ext. P3 statement of the accused, was voluntary and true etc. I think in the nature of the contentions put forward it is necessary to go into these questions in some detail. Respondent's learned counsel argued that S.123 of the Act is a deviation from the normal rule in a criminal trial regarding burden of proof. The normal rule is that it is the duty of the prosecution to establish the guilt of the accused; every element that goes to constitute the offence, has to be proved by the prosecution, and this burden never shifts. But S.123 enacts that where any goods to which the section applies, are seized under the 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. The burden thus shifts under conditions specified in the section, and the conditions are:

(1) seizure of goods to which the section applies;

(2) seizure under the Act; and

(3) seizure in the reasonable belief that they are smuggled goods.

When these 3 elements are proved, the burden would shift to the accused to show that they are not smuggled goods. The question therefore is, how far the pro