Possession of unaccounted foreign gold bars leads to conviction under Customs and Gold Control Acts, where failure to provide lawful explanation substantiates charges of smuggling.

1. The appeal is filed by the accused in C. C. No. 404 of 1975 on the file of the Addl. Judicial I Class Magistrate, Ernakulam. He has been convicted under S.135(1)(b)(ii) of the Customs Act, 1962, and S.85(ii) and (ix) of the Gold Control Act, 1968 and sentenced to pay a fine of Rs. 500/- and in default to undergo simple imprisonment for three months under the former offence. No separate sentence was awarded for the latter offence. The revision is filed by the complainant, Assistant Collector of Central Excise, Ernakulam, challenging the sentence imposed under the Customs Act and the non imposition of the sentence under the Gold Control Act.

2. The prosecution case can be summarised as follows: On the night of 30-10-1968, PW 3, the Sub Inspector attached to the X-Branch Vigilance Section of Police got information that the appellant is engaged in the business of gold smuggling and is a black marketer and is secreting contraband gold etc. in his house. He gave a report Ext. P8 to PW 2, the Sub Inspector of Police, Narakal, who collected witnesses, prepared search memo Ext. P7 and sent it to court and proceeded to the house of the appellant and searched the house in the presence of witnesses and found; five gold bars M. O. 1 series wrapped in a paper kept in the drawer of a table in his bed room and further search revealed a sum of Rs. 12,000/- in currency notes. The gold bars have foreign markings and prima facie appeared to be smuggled gold in the shape of primary gold and the appellant had no reasonable explanation for possession of this gold. The gold and the currency notes were seized under Ext. P5 search list. In the early hours of the morning on 31-10-1968 PW 2 registered a case as Crime No. 120 of 1968 under Ext. P6 FIR against the appellant for offences under the Gold Control Act and the Customs Act. The FIR. and the material objects were sent to the court. PW 2 transferred the case to the Excise Department and informed the court accordingly. On a request by the concerned officer of the Excise Department, the articles seized were handed over to him for further investigation. The gold was caused to be analysed by a competent Chemical Examiner. Adjudication proceedings were held which resulted in Ext. P3 order under which the gold was confiscated absolutely under S.11(D) of the Customs Act, 1962, a penalty of Rs. 10,000/- was imposed on the accused under S.112(b) of the Customs Act, and a penalty of Rs. 5000/- was imposed under S.74 of the Gold Control Act by the Collector of Customs and Central Excise, Cochin. The currency notes were returned to the appellant as he established that the currency notes represented the cash balance of his textile business. The Additional Collector of Customs, Cochin, gave Ext. P1 sanction under the Customs Act for prosecution. The Collector of Customs granted Ext. P2 sanction for prosecution under the Gold Control Act. Accordingly, the Assistant Collector of Customs and Central Excise, Ernakulam Division, laid the complaint against the appellant before the trial Magistrate.

3. The appellant pleaded not guilty before the Magistrate. Prosecution examined 11 witnesses and marked Exts. P1 to P10 and MO 1 series. The defence did not tender any evidence. The appellant denied the prosecution evidence and did not put up any specific plea. The learned Magistrate accepted the prosecution case a