http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: KEWAL KRISHAN

       Vs.

RESPONDENT: STATE OF PUNJAB

DATE OF JUDGMENT: 06/03/1962

BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. GAJENDRAGADKAR, P.B. AIYYAR, T.L. VENKATARAMA

CITATION:  1967 AIR  737            1962 SCR  (3) 613

ACT: Sea Customs--Goods seized in reasonable belief that they are smuggled--Burden   of   proof--If  on  person   from   whose possession goods are seized--Constitutionality of  statutory provison--The Sea Customs Act, 1878 (8 of 1878), ss.167(81), 178A--Foreign    Exchange   Regulation   Act,1947   (7    of 1947),s.23A.

HEADNOTE: The  appellant was searched by a Customs Official  and  some bars  of gold were found tied round his waist. Out of  those bars some were of base metal and the rest of pure gold which borne  foreign markes. The appellant had no permit from  the Reserve Bank of India to import the gold. He was  prosecuted and  convicted under s. 167(81) of the Sea Customs  Act.  He brought an appeal to the Supreme Court by Special leave. Held,  that  s.  178A  of the  Sea  Customs  Act,  1878,  is constitutional. The  contension that before the presumption under s.178A  of the  Sea Customs Act could be raised the prosecution had  to prove  that the gold was of foreign origin was rejected  and held that s. 178A provides that when the goods are seized in the reasonable belief that they are smuggled goods the  onus is on the accused to show that they are not smuggled. Collector  of  Customs, Madras v. Nathella  Sampathu  Chetty (1962) 3 S.C.R. p.786 followed. 614

JUDGMENT: CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 126  of 1959. Appeal  by special leave from the judgment and  order  dated June 19, 1959, of the Punjab High Court in Criminal Revision No. 144 of 1959. R.   L. Kohli, for the appellant. G.   C. Mathur and P. D. Menon, for the respondent.    1962.   March 6. The Judgment of the Court was  delivered by     KAPUR, J.-This is an appeal by special leave against the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

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  Castoms, Madras v. Nathella Sampathu Chetty(1).     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.     The appellant on February 11, 1958, when he was  sitting in  a  third class compartment of the  Amritsa  Kalka  train standing  on Platform No. 5 of the Amrsar  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 wits prepared, Out of these gold (1)  [1962] 3. S.C.R. 786.                             615 bars four were of base metal and the rest were of pure  gold some  bearing the stamp of Johmon Mathey & Co. Ltd.,  999-10 tolas and 2-1/4 bars bore marks of N.M. Rothschild & Sons 10 tolas  (990-0).   No  permit from the the  Reserve  Bank  to import  this gold was produced by the appellant.  Under  the Foreign  Exchange Regulation Act, 1917, 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.     The appellant was prosecuted under s.23A of the  Foreign Exchange  Regulation Act and 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  imprison- ment.   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.    The  trial  court accepted the testimony of  the  Customs Officials  and  held that the defence of the  appellant  was false  and  that gold worth Rs. 14,000/- was  found  in  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.     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 beep 616 imported  from  abroad and only then  does  the  presumption under  s. 178A 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

from the fact that this question has never been raised, that is  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,  cigaretters  and  cosmetics  and  any               other goods which the Central Government  may,               by  notification  in  the  Official   Gazette,               specify in this behalf.               (3)   Every  notification  issued  under   sub               section  (2) shall be laid before both  Houses               of  Parliament as soon as may be after  it  is               issued". Two Customs officers appeared as witnesses, Inspector Satnam Singh and Deputy Superintendent A.N. Kapur, the former is an Inspector   of  Land  Customs  and  the  latter   a   Deputy Superintendent of Customs.  There is nothing to indicate  in their  cross-examination  that the officers did not  have  a reasonable belief that the goods were smuggled goods and the question that the officers did not have reasonable belief is not  suggested  either from the cross-examination  of  these witnesses of from the findings 617 of  the courts below.  Even in his statement of case  it  is contended  that  the  mere existence  of  stamp  of  foreign companies  on gold does not necessarily prove that the  gold is  of  foreign origin.  It might be put  on  spurious  gold which  may be of Indian origin.  In our opinion  apart  from the fact that this question has not been raised, it is quite clear  that what s.178A of the Sea Customs Act  provides  is that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are  not  smuggled  goods  is  on  the  person  from   whose possession the goods are seized.  The onus is on him to show that  the  goods are not smuggled, that is, not  of  foreign origin  on which duty is not paid.  The onus is not  on  the prosecution  to  show  that the goods  are  not,  of  Indian origin.  That appears to be the view taken in the  Collector of Customs, Madras v. Nathella Sampathu Chetty (1) where  at the learned Judges observed : -               "We are therefore of opinion (1) that  section               178A was constitutionally valid, (2) that  the               rule as to the burden of proof enacted by that               section  applies  to  a  contravention  of   a               notification under section 8(1) of the Foreign               Exchanges Regulation Act 1947 by virtue of its               being  deemed  to  be  a  contravention  of  a               notification  on under section 19 of  the  Sea               Customs Act, (3) that the preliminary require-               ment of section 178A that the officer  seizing               should  entertain ,’a reasonable belief’  that               the goods seized were smuggled" was  satisfied               in the present case."      In our opinion there is no merit in this appeal and  it is  dismissed.   The appellant will surrender to  his  bail- bonds.                               Appeal dismissed. (1) [1962] 3 S.C.R. 786. 618

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4