http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7  

PETITIONER: AMBA LAL

       Vs.

RESPONDENT: THE UNION OF INDIA AND OTHERS.

DATE OF JUDGMENT: 03/10/1960

BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. SINHA, BHUVNESHWAR P.(CJ) KAPUR, J.L. GAJENDRAGADKAR, P.B. WANCHOO, K.N.

CITATION:  1961 AIR  264            1961 SCR  (1) 933  CITATOR INFO :  RF         1971 SC  44  (38)  D          1974 SC 859  (29,41,44)  D          1975 SC2288  (13)

ACT:  Evidence--Customs authorities recovering articles  suspected  to  have  been smuggled--Accused pleading  articles  brought  from Pakistan at time of Partition--Burden of proof--Imports  Exports  Control  Act, 1947(10 of 1947), s.  3--Sea  Customs  Act, 1878 (8 of 1878) ss. 19, 167(8) and 178-A--Land Customs  Act,  1924 (19 of 1924), ss. 5 and 7--Indian  Evidence  Act,  1872 (1 of 1872), s. 106.  934

HEADNOTE:  The  appellants house was searched on June 22, 1951, by  the  Customs   authorities  and  ten  articles   were   recovered  therefrom.    In  the  inquiry  before  the  Collector   the  appellant  stated  that  the first five  articles  had  been  brought  by  him in 1947 from Pakistan  after-partition  and  that with respect to the other five articles he   was a bona  fide  purchaser  thereof.   The  Collector  held  that   the  appellant had failed to establish his case and held that the  goods  were  imported into India in contravention Of  S.  3,  Import  Export Control Act read with ss. 19 and 167(8),  Sea  Customs Act and ss. 4 and 5 Land Customs Act read with S.  7  thereof.  This decision was upheld on appeal by the  Central  Board of Revenue and by the Central Government on  revision.  The  appellant contended that: (i) the onus of proving  that  the  first  five  articles were smuggled goods  was  on  the  department which it had failed to discharge, and (2) even if  the  other  five articles which he purchased  were  smuggled  goods he was not concerned with their importation.  Held, that the onus was on the authorities to establish that  the first five articles were imported into India after March  1948, when the customs barrier was put up for the first time  between India and Pakistan, and that the authorities  having  failed  to  adduce  any  evidence to  prove  this  fact  the  appellant  could not be held guilty of any of  the  offences

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7  

charged.   The onus did not shift by virtue Of S. 178A,  Sea  Customs Act or s. 5, Land Customs Act, as the former section  was  not  in operation at the relevant time and  the  latter  section  was not applicable to the facts of this case ;  nor  did  the  onus shift by virtue of s. 106, Evidence  Act,  as  that  section  could  not  be used  to  undermine  the  well  established rule that the burden was on the prosecution  and  never shifted.  Shambu Nath Mehra v. The State of Ajmer, [1956] S.C.R.  199,  followed.  With  respect  to  the  other  five  articles  even  if  the  appellant  was  right  in his contention  that  he  was  not  concerned in their importation he was liable to the  penalty  under  s. 7(1)(c), Land Customs Act, 1924, for  keeping  the  articles knowing them to be smuggled goods.

JUDGMENT:  CIVIL APPELLATE JURISDICTION: Civil Appeal No. 153 of 1956.  Appeal  from the judgment and order dated November 3,  1954,  of  the Punjab High Court in Civil Writ No. 253-D  of  1954.  Veda Vyasa, S. K. Kapur, K. K. Jain and Ganpat Rai, for  the  appellant.  H.  N. Sanyal, Additional Solicitor-General of India, H.  R.  Khanna and T. M. Sen, for the respondents.  935  1960.  October 3. The Judgment of the Court was delivered by  SUBBA RAO J.-This appeal by certificate is directed  against  the  order of the High Court of Judicature of the  State  of  Punjab dismissing the petition filed by the appellant  under  Art. 226 of the Constitution.  The facts giving rise to this appeal may be briefly  stated.  The  appellant  is at present a resident of  Barmer  in  the  State  of  Rajasthan.  But before 1947 he was  living  in  a  place  which  is  now in Pakistan.  On June  22,  1951,  the  Deputy   Superintendent,  Land  Castoms   Station,   Barmer,  conducted  a search of the appellant’s house  and  recovered  therefrom the following ten articles :  ------------------------------------------------------------  Articles seized.      Weight           Estimated                                         value.  ------------------------------------------------------------                                            Rs.  1. Silver slab.      2600 tolas         5,200/-  2. 29 Sovereigns                        2,262/-    (King Ed. VII).  3. 9 pieces of gold     bullion            201 tolas                        and 9 mashas.   22,193/-  4. 4 pieces of silver     bullion            114 tolas.        230/-  5. Uncurrent silver     coins  numbering   575.               865/-  6. Gold bars.          49 tolas and                          9 mashas    5,475/-  7. 255 Phials of liquid   gold.                                 9,875/-  8. Torches 23.  9. Playing cards 3 Dozens                                           400/-  10.Glass beads 48 packets.                                        -------                              Total... 46,500/-  ------------------------------------------------------------

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7  

On  July  14,  1951 the  Assistant  Collector,  Ajmer,  gave  notice’  to the appellant to show cause and explain why  the  goods  seized  from him should not be confiscated  under  s.  167(8)  of the Sea Customs Act and s. 7 of the Land  Customs  Act.  The appellant in his reply  936  stated  that  items  to 5 supra were  brought  by  him  from  Pakistan after the partition of the country in 1947 and that  items  6 to 10 were purchased by him bonafide for  value  in  Barmer.  On October 27, 1951, the appellant appeared  before  the  Collector of Central Excise, who made an  enquiry,  and  admitted  before him that items 6 to 10 were smuggled  goods  from Pakistan, but in regard to the other items be  reitera-  ted  his plea that he originally brought them from  Pakistan  in the year 1947.  The Collector of Central Excise held that  the appellant bad failed to establish that items 1 to 5  had  been  brought by him to India in the year 1947 and  he  also  did not accept the plea of the appellant in regard to  items  6  to 10 that he was a bonafide purchaser of them.   In  the  result  he held that all the goods were imported into  India  in  contravention of, (i) s. 3 of the Import Export  Control  Act read with ss. 19 and 167(8) of the Sea Customs Act, (ii)  ss. 4 and 5 of the Land Customs Act read with s. 7  thereof.  He made an order of confiscation of the said articles  under  s.  167(8)  of  the Sea Customs Act and s.  7  of  the  Land  Customs Act; but under s.     183 of the Sea Customs Act  he  gave him an option to    redeem the confiscated goods within  four months of the date of the order on payment of a sum  of  Rs.  25,000.  In addition he imposed a penalty of Rs.  1,000  and directed the payment of import duty leviable on all  the  items  together  with other charges before  the  goods  were  taken out of customs control.  Aggrieved by the said  order,  the  appellant preferred an appeal to the Central  Board  of  Revenue.   The  Central  Board of Revenue  agreed  with  the  Collector  of  Central Excise that the onus of  proving  the  import  of the goods in question was on the  appellant.   In  regard  to  items  1  to 5, it  rejected  the  plea  of  the  appellant mainly on the basis of a statement alleged to have  been  made  by  him  at the time  of  seizure  of  the  said  articles.   In  the result the appeal  was  dismissed.   The  revision  filed by the appellant to the  Central  Government  was  also  dismissed  on August 28,  1953.   Thereafter  the  appellant  filed  a  writ petition under  Art.  226  of  the  Constitution in the High Court  937  of  Punjab but it was dismissed by a division bench  of  the  High Court on November 3, 1954.  Hence this appeal.  It  would  be  convenient to deal with this  appeal  in  two  parts-one in regard to items 1 to 5 and the other in  regard  to items 6 to 10.  The  decision in regard to items 1 to 5 turns purely on  the  question  of onus.  The Collector of Central Excise as  well  as  the  Central  Board of Revenue held  that  the  onus  of  proving the import of the goods lay on the appellant.  There  is  no  evidence  adduced  by  the  customs  authorities  to  establish  the  offence of the appellant, namely,  that  the  goods  were  smuggled into India after the  raising  of  the  customs barrier against Pakistan in March 1948.  So too,  on  the part of the appellant, except his statement made at  the  time  of  seizure of the goods and also at the time  of  the  inquiry that he brought them with him into India in 1947, no  other   acceptable  evidence  has  been  adduced.   In   the  circumstances,  the question of onus of proof  becomes  very  important  and the decision turns upon the question on  whom  the burden of proof lies.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7  

This Court has held that a customs officer is not a judicial  tribunal  and  that  a  proceeding  before  him  is  not   a  prosecution.   But  it cannot be denied that  this  relevant  provisions  of the Sea Customs Act and the Land Customs  Act  are  penal in character.  The appropriate customs  authority  is  empowered  to make an inquiry in respect of  an  offence  alleged  to have been committed by a person under  the  said  Acts,  summon  and  examine  witnesses,  decide  whether  an  offence  is committed, make an order of confiscation of  the  goods  in  respect  of which the offence  is  committed  and  impose  penalty  on the person concerned ; see ss.  168  and  171A  of  the Sea Customs Act and ss. 5 and 7  of  the  Land  Customs Act.  To such a situation, though the provisions  of  the  Code of Criminal Procedure or the Evidence Act may  not  apply  except  in  so  far  as  they  are  statutorily  made  applicable,   the   fundamental   principles   of   criminal  jurisprudence and of natural justice must necessarily apply.  If so, the burden of proof is on the customs authorities and  they have to  938  bring home the guilt to the person alleged to have committed  a  particular  offence  under  the  said  Acts  by  adducing  satisfactory evidence.  In the present case no such evidence  is  forthcoming;  indeed there is no tittle of  evidence  to  prove  the case of the customs authorities.  But it is  said  that  the onus shifted to the appellant for  three  reasons,  namely,  (i) by reason of the provisions of s. 178A  of  the  Sea Customs Act; (ii) by reason of s. 5 of the Land  Customs  Act; and (iii) by reason of s. 106 of the Evidence Act.  Section  178A  of the Sea Customs Act does  not  govern  the  present  case, for that section was inserted in that Act  by  Act No. XXI of 1955 whereas the order of confiscation of the  goods in question was made on January 18, 1952.  The section  is  prospective  in  operation and cannot  govern  the  said  order.  Nor  does s. 5 of the Land Customs Act apply to the  present  case.  Under s. 5(1) of the said Act, "Every person desiring  to  pass  any  goods by land, out of  or  into  any  foreign  territory  shall  apply  in writing for  a  permit  for  the  passage  thereof, to the Land Customs Officer incharge of  a  land customs Station By sub-s. (2) of s. 5 of the said  Act,  if  the requisite duty has been paid or the goods have  been  found  by the Land Customs Officer to be free of  duty,  the  Land Customs Officer is empowered to grant a permit.   Under  sub-s.  (3)  thereof,  "  Any  Land  Customs  Officer,  duly  empowered by the Chief Customs authority in this behalf, may  require any person in charge of any goods which such Officer  has reason to believe to have been imported, or to be  about  to  be exported, by land from, or to, any foreign  territory  to  produce the permit granted for such goods; and any  such  goods  which are dutiable and which are unaccompanied  by  a  permit or do not correspond with the specification contained  in  the  permit  produced, shall be detained  and  shall  be  liable to confiscation." This section has no bearing on  the  question  of onus of proof.  This section obviously  applies  to a case where a permit is required for importing goods  by  land  from a foreign country into India and it empowers  the  Land Customs Officer, who has reason to believe that any  939  goods have been imported by land from any foreign territory,  to  demand  the permit and to verify whether  the  goods  so  imported correspond with the specification contained in  the  permit.   If  there was no permit or if the  goods  did  Dot  correspond  with the specification contained in the  permit,  the   said  goods  would  be  liable  to  be  detained   and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7  

confiscated.  The application of this section is conditioned  by  the legal requirement to obtain a permit.  If no  permit  is  necessary to import goods into India, the provisions  of  the  section cannot be attracted.  In the present  case  the  customs  barrier was established only in March,  1948,  that  is,  after the said items of goods are stated by the  appel-  lant to have been brought into India.  We  cannot also accept the contention that by reason of  the  provisions  of s. 106 of the Evidence Act the onus  lies  on  the  appellant  to prove that he brought the said  items  of  goods  into India in 1947.  Section 106 of the Evidence  Act  in terms does not apply to a proceeding under the said Acts.  But it may be assumed that the principle underlying the said  section  is of universal application.  Under  that  section,  when  any  fact is especially within the  knowledge  of  any  person,  the burden of proving that fact is upon him.   This  Court in Shambu Nath Mehra v. The State of Ajmer (1),  after  considering  the  earlier  Privy Council  decisions  on  the  interpretation of s. 106 of the Evidence Act, observed at p.  204 thus:                "The  section cannot be used to undermine  the                well  established rule of law that, save in  a                very exceptional class of case, the burden  is                on the prosecution and never shifts."  If s. 106 of the Evidence Act is applied, then, by  analogy,  the  fundamental principles of criminal  jurisprudence  must  equally  be  invoked.  If so, it follows that  the  onus  to  prove  the  case  against the appellant is  on  the  customs  authorities  and  they failed to discharge  that  burden  in  respect of items 1 to 5. The order of confiscation  relating  to items 1 to 5 is set aside.  Before  closing this aspect of the case,  some  observations  have to be made in respect of the manner in  (1)  [1956] S.C.R. 199.  940  which  the statement given by the appellant when  the  goods  were seized was used against him by the customs authorities.  It would be seen from the order of the Collector of  Central  Excise as well as that of the Central Board of Revenue  that  they had relied upon the statement alleged to have been made  by him at the time the search was made in his house in order  to  reject  his case that he brought some of  the  items  of  goods  into  India in the year 1947.  The appellant  in  his  reply to the show-cause notice complained that his statement  was taken in English, that he did not know what was recorded  and that his application for inspection and for the grant of  a copy of his statement was not granted to him.  It does not  appear  from  the records that he was given a  copy  of  the  statement  or that he was allowed to inspect the  same.   In  the  circumstances  we  must  point  out  that  the  customs  authorities were not justified to rely upon certain, alleged  discrepancies  in that statement to reject  the  appellant’s  subsequent  version.   If they wanted to rely upon  it  they  should  have  given  an, opportunity  to  the  appellant  to  inspect it and, at any rate, should have supplied him a copy  thereof.  Coming to items 6 to 10, we have no reason to reject, as  we  have  been asked to do, the statement made in the  order  of  the Collector of Central Excise dated October 27, 1951, that  the  appellant  accepted that items 6 to  10  were  smuggled  goods  from  Pakistan.   It would have been  better  if  the  customs authorities had taken that admission in writing from  the appellant, for that would prevent the retraction of  the  concession  on  second  thoughts.  That apart,  it  is  more  satisfactory if a body entrusted with functions such as  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7  

customs authorities are entrusted with takes that precaution  when  its decision is mainly to depend upon such  admission.  But in this case, having regard to the circumstances  under,  and  the manner in, which the said concession was  made,  we  have no reason to doubt the correctness of the statements of  fact  in  regard to this matter made in the  orders  of  the  customs authorities.  If so, it follows that the finding  of  the  customs  authorities that the appellant  purchased  the  said items, which were smuggled goods, should  941  prevail.   The  order of confiscation of  these  five  items  will, therefore, stand.  Even  so,  it is contended by the learned  counsel  for  the  appellant  that  the  customs  authorities  went  wrong   in  imposing a penalty on him under s. 167(8) of the Sea Customs  Act.  The said section reads:  "  If any goods, the importation or exportation of which  is  for  the  time being prohibited or restricted  by  or  under  Chapter  IV of this Act, be imported into or  exported  from  India      contrary     to     such      prohibition      or  restriction............  such goods shall be liable to  con-  fiscation; and  any person concerned in any such offence shall be liable  to  a penalty not exceeding three times the value of the  goods,  or not exceeding one thousand rupees."  The  appellant’s  argument is that though he  purchased  the  said smuggled goods he is not concerned with the importation  of  the  goods contrary to the  prohibition  or  restriction  imposed  by  or under Ch.  IV of the Sea Customs  Act.   The  ’offence  consists  in importing the goods contrary  to  the  prohibition and, therefore, the argument proceeds, a person,  who has purchased them only after they were imported, is not  hit  by  the  said section.  There is  some  force  in  this  argument, but we do not propose to express our final view on  the  matter as the appellant is liable to the penalty  under  s. 7(1)(c) of the Land Customs Act, 1924.  The said  section  reads:  " Section 7 (1): Any person who-  (c)aids  in so passing or conveying any goods,  or,  knowing  that  any  goods have been so passed or conveyed,  keeps  or  conceals such goods, or permits or procures them to be  kept  or concealed,  shall be liable to a penalty not exceeding, where the  goods  are  not dutiable, fifty or, where the goods or any of  them  are dutiable, one thousand rupees, and any dutiable goods in  respect  of  which the offence has been committed  shall  be  liable to confiscation."  In this case the finding is that the appellant with the      120  942  knowledge  that the goods had been smuggled into India  kept  the  goods, and, therefore, he was liable to  penalty  under  that section.  We hold that the penalty was rightly  imposed  on him.  It  is then contended that the Collector of  Central  Excise  had no jurisdiction to impose conditions for the release  of  the  confiscated goods.  The Collector of Central Excise  in  his  order says, " In addition the import duty  leviable  on  all these items together with other charges, if any payable,  should be paid and necessary formalities gone through before  the  goods can be passed out of Customs Control ". In  Shew.  pujanrai Indrasanrai Ltd. v. The Collector of Customs (1), a  similar  question  arose for consideration  of  this  Court.  There by an impugned order the Collector of Customs  imposed  two  conditions  for the release of the  confiscated  goods,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7  

namely, (1) the production of a permit from the Reserve Bank  of India in respect of the gold within four months from  the  date  of  despatch of the impugned order, and (2)  the  pay-  ment of proper customs duties and other charges leviable  in  respect  of the gold within the same period of four  months.  This  Court  held, agreeing with the High  Court,  that  the  Collector of Customs had no jurisdiction to impose the  said  two  conditions.  The learned Additional  Solicitor  General  concedes that the said decision applies to the present case.  We do not, therefore, express any view whether that decision  can be distinguished in its application to the facts of  the  present  case.  On the basis of the concession we hold  that  the  conditions  extracted above, being severable  from  the  rest of the order, should be deleted from the said order  of  the Collector of Central Excise.  Learned  counsel  for  the appellant then  argues  that  the  option  given in the said order to the appellant  to  redeem  the  confiscated  goods  for home  consumption  within  four  months of the order on payment of Rs. 25,000 was based  upon  the  validity of the confiscation of all the ten items  and,  as this Court now holds that confiscation was bad in respect  of items 1  (1)  [1959] S.C.R. 821.  943  to  5,  the  amount  of the penalty  of  Rs.  25,000  should  proportionately be reduced.  There is justification for this  contention.   But we cannot reduce the amount, as  under  s.  183 of the Sea Customs Act the amount has to be fixed by the  concerned officer as he thinks fit.  But as the basis of the  order partially disappears, we give liberty to the appellant  to apply to the customs authorities for giving him an option  to  redeem  the  confiscated goods on payment  of  a  lesser  amount, having regard to the changed circumstances.  In  the result, the appeal is allowed in part and the  order  of  the Collector of Central Excise is accordingly  modified  in  terms  of  the  finding given by  us.   As  the  parties  succeeded  and  failed in part, they are  directed  to  bear  their own costs.                        Appeal partly allowed.