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PETITIONER: COLLECTOR OF CUSTOMS, MADRAS AND ORS

       Vs.

RESPONDENT: D. BHOORMUL

DATE OF JUDGMENT03/04/1974

BENCH: SARKARIA, RANJIT SINGH BENCH: SARKARIA, RANJIT SINGH BEG, M. HAMEEDULLAH

CITATION:  1974 AIR  859            1974 SCR  (3) 833  1974 SCC  (2) 544  CITATOR INFO :  RF         1975 SC2083  (6)  E          1980 SC 793  (8)

ACT: Sea  Customs  Act, 1878, Sec.  167(8)--Imports  and  Exports Control  Act, 1947--Sec 3(2)--Confiscation  of  goods--Goods acquired  from illegally imported stocks--Burden  of  proof, how discharged by the Department--Indian--Evidence Act, Sec. 106--Conflicting and incredible--account by alleged owner of facts  (regarding  importation  and  ownership)  within  his personal  knowledge--How  far conduct of the  alleged  owner determinative  of legal inference regarding smuggled  nature of goods.

HEADNOTE: The preventive officers of the Customs Deptt. recovered from the shop of one Baboothmull ten packages containing imported goods,  such. as. fountain pens, hair clippers, razor  sets, etc. worth about Rs. 12,000/-.  They were lying packed as if they  had been freshly delivered or were ready for  despatch to  a  further destination.  The respondent  disclaimed  not only  the ownership but all knowledge about the contents  of the  packages.  He could not give a satisfactory account  as to  how  those  packages  came into  his  shop.   His  first explanation was that some next door unknown broker had  left the  packages outside his shop.  He then :stated  that  they were  owned  by  one Bhoormul.  The  said  Bhoormul  despite repeated  requests  by  the  Deptt.  did  not  furnish   any information regarding the source of the alleged  acquisition of the goods.  He never appeared personally nor gave address or  sufficient particulars of the brokers Who had  sold  the goods  to  him.  Despite two  show-cause  notices,  Bhoormul refused  to  disclose any further information.  He  did  not furnish  any  evidence of, his ownership or  even  juridical possession  of  the  goods.  The  Collector  of  Customs  on consideration  of  the fact that the goods  were  admittedly foreign  goods  incredible explanations  by  the  respondent concluded  that the goods were acquired from  the  illegally acquired  stocks and ordered the confiscation of  the  goods u/s 167(8) of the Sea Customs Act.  On a writ petition filed by the respondent, the single Judge of the Madras High Court rejected the writ petition but the Letters Patent Appeal was

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allowed  by  the  Division Bench of  the  High  Court.   The Division  Bench  held  that  the  Customs  Deptt.  had   not discharged,  its  burden  of  proof  .that  the  goods  were smuggled goods.      Allowing the appeal, HELD : (1) The propriety and legalityof  the  Collector’s order  is  to  be  judged in the  light  of  the  principles regarding the burden of proof Legal proof is not necessarily perfect proof often it is nothing more than a prudent  man’s estimate  as to the probabilities of the case, Since  it  is exceedingly difficult for the prosecution to prove the facts which are especially within the knowledge of the accused, it is  not  obliged  to prove them as a  part  of  its  primary burden.   On the principle underlings. 106 of  the  Evidence Act,  the,  burden  to establish the  facts  within  special knowledge  of  a  person  lies on him and  if  he  fails  to establish  the  facts within special knowledge of  a  person lies  on him and if he fails to establish or  explain  those facts, an adverse inference of facts may arise against  him. which  coupled with the presumptive evidence adduced by  the prosecution  or  the  Department  would  rebut  the  initial presumption  of innocence in favour of that person,  and  in the  result would prove him guilty.  The first part  of  the entry  in the third column of clause 8 of s. 167 of the  Sea Customs  Act  regarding the penalty of confiscation  of  the goods  casts less rigorous burden on the prosecution as  the order operates in rem and is enforced against the goods only [842 D; 841 D; E-F] (11) Although no direct evidence of the illicit  importation of  goods  was adduced by the Department the fact  that  the goods  were  of foreign origin coupled  with  the  inference arising  from  the  dubious  conduct  of  Babhoothmull   and Bhoormal  could reasonably lead to the conclusion  drawn  by the Collector that the goods were smuggled goods. 834 Issardas Paulat Ram and ors. v. The Union of India and ors., [1962]  Supp.  1, S.C.R. 355 and M/S.  Kanungo  and  Co.  v. Collector  of  Customs  (Calcutta) A.I.R.  1972  S.C.  2136, relied upon. Amba  Lal  v.  Union of India, [1961]  1,  S.C.R.  933,  and Shambhu Nath Mehra v.    State of Ajmer, [1956] S.C.R.  199, distinguished. Bletch  v.  Archer  [1774] Cowp. 63 at p.65  and  R.  Madhub Chander, [1874] 21. W.R. Cr. 13 at 19.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1142  of 1973.   Appeal by special leave from the judgment and  order dated the 12th March,  1973  of  the Madras High Court at  Madras  in  Writ Appeal No. 357 of 1969. G.   L. Sanghi and S. P. Nayar, for the appellants. K.   S. Ramamurthy and B. R. Agarwala, for the respondent. The Judgment of the Court was delivered by : SARKARIA, J. This appeal by special leave arises out of  the following facts : On  receiving  information  that  some  packages  containing smuggled goods had been left by a person in the premises  of M/s.   Sha  Rupaji Rikhabdas at 98,  Narayana  Mudali  Lane, Madras-1 and that these packages were about to be despatched to Bangalore for disposal, a posse of Preventive Officers of the  Customs  House went to the said shop on June  4,  1962. They  found ten packages in that shop.  Baboothmull of  M/s.

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Sha  Rupaji  Rikhabdas  was  present  there.   The  officers questioned  Baboothmull about those  packages.   Baboothmull replied that he was not the owner of those packages and that somebody next to his shop had left them outside the premises and  since that person had not returned for  a  considerable time,  he got them removed into the shop.   Baboothmull  was unable  to throw any light with regard to the owner  or  the contents of the packages. After  getting  a  consent  letter  from  Baboothmull,   the officers opened the packages which contained these  articles of the total value of Rs. 12,255/-. 1. Parker Fountain Pens (19 made in Canada)28 Doz. Rs. 3,360 00 2. Master hair clippers made in Germany 5 Doz. Rs.    600.00 3. Oster Hair Clippers made in Germany3-1/2 Doz.Rs. 400.00 4. Venus pencils made in England   760 Doz.Rs.      2,250.00 5. K. 55 Out thread razors made in Germany68 Doz. Rs.4,080.00 6. Nylon buttons made in Japan     47 Gross.Rs.     705.00 7. Gillette Razor Blades made in England 1,000 PCs.Rs.120.00 8. 7 O’clock Razor sets made in England12 Doz.Rs.    730.00                                      -----------------------                                                Rs. 12,255.00 835 The Officers seized these goods under a mahazarnama. On  June  9,  1962,  a letter  was  addressed  by  the  said Baboothmull  to  the Collector, Customs, informing  that  on that  date, the owner of the packages, one Mr. D.  Bhoormull turned  up  to claim the goods; that his other  partner  was absent  at  the time of the seizure of the  goods  who  knew about  this affair and that he had subsequently learnt  from this  partner that those goods belonged to D. Bhoormull  who left   instructions   for  their  storage   in   the   shop. Subsequently the name of this partner was given as Indermul. The  Custom Officers attempted to find out and contact  this Indermul but without success. Eight days after the seizure, a letter dated June 12,  1962, was  received  by  the  Collector of  Customs  from  one  D. Bhoormull  (Poonawala,  temporarily at 98,  Narayana  Mudali Lane,  Madras-1), claiming ownership of the goods.  In  this letter  it was stated that he had purchased these  goods  on June 3, 1962 in the local market at Madras through  brokers; that  he was packing the same till late in the evening,  and since he was forced to leave for Bangalore on the call of  a friend  immediately, he instructed one of the staff  of  Sha Rupaji  Rikhabdas to keep the goods in their shop until  his return.  This letter of Bhoormull did not contain the  names or  the particulars of the brokers from whom the goods  were allegedly  purchased; nor did it refer to any bill,  voucher or other document to support the allegation of their  having been purchased locally in the normal course of business.  On receipt  of  this letter, the Collector made an  attempt  to contact  Bhoormull  for further  investigation.   Bhoormull, however, could not be contacted as he had gone away to Poona which was said to be his normal place of activity. Another  letter,  dated June 25, 1962, was received  by  the Collector from Bhoormull urging for release of his goods  at an early date. On July 3, 1962, a letter was received by the Collector from M/s.   Gagrat  &  Co.,  Solicitors,  Bombay  on  behalf   of Bhoormull, requesting for disclosure of the grounds for  the seizure  of the goods, and for supply of the copies  of  the Mahazarnama  and  other relevant documents relating  to  the seizure.   It  was reiterated that the goods had  been  bona fide  purchased-by Bhoormull in the course of business,  and as  such, were not liable to seizure or confiscation.   This

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was followed by another letter dated September 14, 1962 from M/s.  Gagrat & Co., addressed to the Assistant Collector  of Customs  wherein  the request for supply  of  the  necessary information, was reiterated. The importation of goods shown as items 1, 4 and 7 had  been prohibited  since December 1957 and of those at items 2,  3, 5, 6 and 8 since March 1960, save under a licence issued  by the Import Trade Control Authorities under s. 1 9 of the Sea Customs  Act read with s. 3 (1 ) of the Imports and  Exports Control Act, 1947. The  Assistant  Collector  of Customs on  October  26,  1962 issued  a notice to Bhoormull through his  solicitors,  M/s. Gagrat  & Co., Bombay requiring him to produce  evidence  of bona fide acquisition of the goods in question failing which to show cause within a week as to why those goods valued  at Rs.  12,255/- be not confiscated under S. 167(8) of the  Sea Customs  Act read with s. 3(2) Imports and  Exports  Control Act, 836 1947.   It  was  added that in case no  reply  was  received within  the specified period the case would be  decided  ex- parte  on the basis of the facts already on  record  without further reference to him. In reply, a letter, dated December 13, 1962, was written  by the  Solicitors in which, it was inter alia stated  that  on June  4, 1962, at Madras, the goods, being items 2 and 4  to 8, were purchased by their client from Broker Ram Lal for  a total price of Rs. 10,675/-, and those shown as items I  and 3, from Broker Shanthi Lal for a sum of Rs. 4872/-, and that these brokers had not issued any bills or receipts regarding those  goods.  Any further particulars or addresses  of  the brokers were not disclosed. On  March  27, 1963, a revised show-cause  notice  was  sent under  registered  cover  by the  Collector  of  Customs  to Bhoormull  through his solicitors requiring him  to  produce within  a  week  the  purchase  receipts,  bills,  vouchers, Customs  auction-receipts, Central excise auction  receipts, licences  or  any other documents in his possession  and  to furnish  the  names  of  the  brokers  in  the  market,their addresses  etc. from  whom the goods were purchased by  him, failing  which  to show cause against  confiscation  of  the goods. The  information  called  for  was  not  supplied,  nor  did Bhoormull  appear  personally before the  Collector  at  any stage.   However, on his behalf the Solicitors wrote to  the Collector,  a letter, dated April 30, 1963, contending  that the  burden  of  proving  that the  seized  goods  had  been illegally imported into India lay on the Customs  Department and the non-production of the documents or non-furnishing of the information asked for by the Collector could not justify an  inference of illicit importation of the goods.   It  was added that such goods had been imported as late as 1959/1960 as  personal  baggages  and had in fact  been  sold  by  the Customs Department at Madras and elsewhere and as such  were being freely bought and sold in the market. A  date was fixed by the Collector for personal  hearing  of Bhoormull.   But he did not personally appear.  However,  on August  1,  1963,  Shri J. R. Gagrat, of M/s  Gagrat  &  Co. appeared  before  the  Collector with  a  representative  of Bhoormull, and contended that unless the Department had  any other indication, it would not be necessary for Bhoormull to establish  ownership of the goods; that there were  no  pur- chase  vouchers;  nor was he in a position  to  produce  the broker who was supposed to have left the goods near the shop of Baboothmull.

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While  conceding that the burden of proving the goods to  be smuggled  goods, was on the Department, the  Collector  held that  such  burden  prima  facie  stood  discharged  as  the circumstances   of  this  case  irresistibly  led   to   the conclusion that the goods had been illicitly imported.   The main circumstances, taken into account by the Collector,  in raising such an inference, may be arranged as under :               (i)   The  import  of  such  goods  has   been               totally  prohibited since 1957 except  in  the               case of hair clippers and Venus Pencils, which               were allowed on a highly restricted quotabasis               till October 1959/March 1966, Policy  period’,               ’when their import too was banned;"                837               (ii)  The  highly suspicious circumstances  of               the  seizure  and the dubious conduct  of  the                             parties  in  relation thereto  (a)  Th is  large               number of goods, all of foreign origin,  worth               over Rs .12,000/-, were found fully packed and               ready for despatch. (b) Baboothmull from whose               possession  they were seized gave  conflicting               and  evasive explanations in  regard  thereto.               At  the  time of seizure on June 4,  1962,  he               disclaimed  all knowledge about the  ownership               and contents of those packages, and said  they               were  left outside the shop by a  broker  whom               he,  could not identify.  Some days later,  he               ,appeared   in  the  arena  (garb  ?)  of   an               anonymous    (fictitous   ?)    person,    one               Bhoormull’.  (c), It was eight days after  the               seizure that one Bhoormull by a letter claimed               ownership of the goods, and Baboothmull,  also               confirmed this.  "This Bhoormull..the  alleged               owner of the goods has never been seen Even at               the personal hearing a representative from him               came..  All the correspondence  was  exchanged               with  the  firm  of  Solicitors,  namely  M/s.               Gagrat & Co. of Bombay". (d) Despite  repeated               requisitions  made and two showcause  notices-               given  by the Collector, no bill,  voucher  or               other    documentary    evidence,    whatever,               regarding   purchase  of  the  goods  in   the               recognised   markets   of  the   country   was               produced.   At  first, even the names  of  the               seller  were  not disclosed.   Later  on  M/s.               Gagrat & Co. cited two brokers whose addresses               were not furnished. In  view of the above circumstances the Collector held  that there  "was no room for doubt that the goods  were  acquired from illegally imported stocks He, therefore, ordered  their confiscation under s. 167(8) of the Sea Customs Act. Against this order dated October 24, 1963, Bhoormull carried an  appeal  under  s. 131 of the Customs  Act  1962  to  the Central  Board  of  Revenue  which  dismissed  the  same  on September 7, 1964, Aggrieved, Bhoormull preferred a Revision Petition to the Central Government.  It was dismissed by the Secretary to the Government by an order, dated September  7, 1965. Bhoormull  then  moved the High Court at Madras  by  a  writ petition  under Art. 226 of the Constitution  impugning  the aforesaid  orders  of  the Collector,,  the  Board  and  the Central  Government,  contending that the  confiscation  was illegal because the Customs Department on which the onus  of proving  the  unlawful’ importation of the  goods  lay,  had

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failed  to adduce any evidence whatever, to  discharge  that onus.   The  learned single, Judge who  tried  the  petition repelled this contention, holding that the circumstances, on record  established "every probability of the  goods  having been  illicitly  imported  into India,"  and  dismissed  the petition. Against  the  order of the learned  Single  Judge  Bhoormull filed an appeal under Clause (15) of, the Letters Patent  to the  Division  Bench of the High Court which held  that  the onus  on  the Department to prove that the  goods  had  been smuggled, could not-in this case did not--shift to Bhoormull and that the later’s failure to  appear personally or 838 prove  before the Collector how he had come by those  goods, did  not justify an inference of their illicit  importation, because  a mere suspicion cannot be a substitute for  proof. On  the  above reasoning, the Bench allowed the  appeal  and quashed the Collector’s order for confiscation of the goods. Hence this appeal with special leave, by the Department. Before  dealing  with the contentions  canvassed,  we  would refer briefly to the relevant, statutory provisions. Section 167(8) of the Sea Customs Act provides for  offences punishable to the extent mentioned in the 3rd column of  the Schedule  appended  to  that section.  Clause  (8)  of  that Schedule provides that if any goods the importation       or exportation  of  which is for the time being  prohibited  or restricted  by order under Ch.  IV of this Act  be  imported into or   exported  from India contrary to such  prohibition or restriction, then     (i) such goods "shall be liable  to confiscation, and (ii) any person  concerned  in  any   such offence  shall  be liable to a penalty not  exceeding  three times  of the value of the goods, or not  ,exceeding  1000/- rupees." Section  171-A  specifically empowers the  Customs  Officers employed in the prevention of smuggling to summon any person whose  attendance  be  considers necessary  either  to  give evidence or to produce a document or thing in an enquiry  in connection  with the smuggling of any goods and such  person shall be bound to state the truth and produce that  document or  thing  and would be liable to prosecution if he  made  a false statement. A reading of s. 167(8) and the related provisions  indicates that  proceedings for confiscation of contraband  goods  are proceedings in rem and the penalty of confiscation under the first  part of the entry in column (3) of clause (8) of  the Schedule,  is  enforced against the  goods  irrespective  of whether  the offender is known unknown.  But, imposition  of the  other  kind of penalty, under the second  part  of  the entry in column 3, is one in personam; such a penalty can be levied  only  on  the  "person  concerned"  in  any  offence described in column I of the Clause. Goods  found to be smuggled can, therefore,  be  confiscated without   proceeding   against  any   person   and   without assertaining  who  is their real owner or who  was  actually concerned in their illicit import. Section  168  empowers an officer of the  Customs  or  anti- smuggling staff to seize any thing liable to confiscation. Section 178(A) provides for burden of proof.  It says               "(1)  Where  any goods to  which  the  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

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             manufactures,  diamonds  and  other   precious               stones, cigarettes and cosmetics and any other               goods  which  the Central Government  may,  by               notification in the Official Gazette,  specify               in this behalf,               839               (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." Large scale smuggling of gold or other goods into India  may pose  a  threat  to the economic and  fiscal  interests  and policies of the State.  Such illicit trade is often  carried on  by organized international smugglers in the  secrecy  of the underworld.  The more it is organized, the less are  the chances  of  its detection, and greater  the  difficulty  of proving the offences relating thereto.  Laws have  therefore been  enacted  in most countries, which mark  a  partial  or wholesale  departure in matters relating to smuggling,  from the general principle of penal law, viz., that it is for the State  or  its Department to prove the offence  against  the accused or the defendant.  Thus in England, S. 290(2) of the Customs  and  Excise Act, 1952 provides that  where  in  any proceeding relating to Customs or Excise any question arises as to the place from which any goods have been brought or as to  whether or not any duty has been paid or any goods  have been lawfully imported etc., then the burden of proof  shall lie  upon  the  other party to the  proceeding.   In  India, Parliament inserted s. 178-A by the Amending Act 10 of 1957, but it did not, in its wisdom, go as far as s. 290(2) of the English Act.  Section 178-A in terms applies to "gold,  gold manufacture, diamands and. other precious stones, cigarettes and  cosmetics".   With regard to these specified  goods  if seized under this Act in the reasonable belief that they are smuggled  goods, the burden of proof that they are not  such goods shall be on the person from whose possession, they are seized.   But  with regard to any other goods, the  rule  in sub-section (1) of Section 178-A would not apply unless  the Central  Government  had specifically applied  the  same  by notification  in the Official Gazette.  It is common  ground that at the material time, no such notification applying the section to the categories of the goods in question had  been issued.   In  respect of such goods the  provisions  of  the Evidence Act and the Code, of Criminal Procedure, do not, in terms,  govern  the  onus of proof in  proceeding  under  s. 167(8)  of the Act.  In conducting these penal  proceedings, therefore,  the Collector of Customs is to be guided by  the basic canons of criminal jurisprudence and natural justice. With the above prefactory remarks, we now advert to the con- tentions canvassed before us. Mr.  Sanghi,  learned  Counsel   for  the  appellants,   has advanced these arguments               (a)   Bhoormull had no locus standi to  invoke               the  extraordinary  jurisdiction of  the  High               Court  under Article 226 of  the  Constitution                             because there was not even prima facie  evidence               to show that at the time of seizure, he was in               ownership  or  juridical  possession  of   the               goods;               (b)   The  onus  of proving the  goods  to  be               smuggled  goods  that  initially  lay  on  the               Department,  stood sufficiently discharged  by               the  inevitable inference arising out  of  the               totality  of the circumstances in  this  case,

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             which were appraised by                840               the  Collector in the light of the.conduct  of               Baboothmull    and   Bhoormull,   who,    gave               conflicting and incredible explanations as  to               how  they  had come by these  goods;  (c)  The               source  from  which and the  circumstances  in               which Bhoormull or Baboothmull acquired  these               goods,  were,  facts especially  within  their               knowledge  and on the principle underlying  s.               106,  Evidence  Act,  these facts  had  to  be               proved  by them.  They deliberately failed  to               disclose those facts or to give the  necessary               particulars of the persons from whom the goods               were   allegedly  purchased,   although   such               information was repeatedly requisitioned  from               Bhoormull by the Collector, and they were duty               bound  under  s.  171-A  disclose  it.    This               contumacious   conduct  of   Baboothmull   and               Bhoormull   strongly   pointed   towards   the               conclusion   that  the  goods  were   smuggled               stocks,  and  in  that  sense,  the  inference               arising from the circumstances had shifted the               onus  on  the  Bhooormull  to  prove  to   the               contrary.  (In this connection,  reliance  has               been placed upon Issardas Daulat Ram and  ors.               v.  The  Union of India and ors.(1)  and  M/s.               Kanungo  and  Co.  v.  Collector  of   Customs               (Calcutta) (2); (d) The Order of the Collector               did  not  suffer from any  apparent  error  or               defect  of jurisdiction.  His order was  based               on  an  appraisement  of  the   circumstantial               evidence  before him and was  consistent  with               the  rules of natural justice.  He  had  given               the  fullest opportunity,to the Respondent  to               put  forth his case and had issued  two  show-               cause  notices to him through his  Solicitors.               The   Division   Bench  of  the   High   Court               exercising jurisdiction under Art. 226 was not               competent  to  go  into the  question  of  the               adequacy  of that evidence, and act as  if  it               was a court of appeal. Mr. Ramamurthi, learned Counsel for the Respondent, contends in.  reply,  that  all proceedings  were  conducted  by  the Collector on the assumption that Bhoormull was the  claiment or  the  supposed owner of the goods,;, that  at  no  stage, before  the High Court an, objection was taken that  he  had no,  locus standi to maintain the writ petition, because  he had  no interest in the confiscated goods and  consequently, this objection should not be entertained for the first  time in  this  Court.   Learned  Counsel  further  submits   that proceedings  of  confiscation  being penal  in  nature,  the burden  was  on  the  Department  to  show  by  cogent   and convincing  evidence  that  the  goods  had  been  illicitly imported into India and that no part of this burden could be shifted to the person claiming the goods.  It is  emphasised that in the present case, no evidence whatever was  produced by  the  Department to show that the goods  in  question  we smuggled  goods.   The Collector’s  order-proceeds  are  the argument-calling  upon  Bhoormull  to  prove  that  he   had purchased  these goods in the normal course of business  was contrary  to the law laid down by this Court in Amba Lal  v. Union of India(3).  Reference has also been made to  several decisions of the High Courts, but most of (1) [1962] Supp. 1, SCR 355.

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(2) AIR 1972 SC 2136. (3) [1961] 1, S.C.R. 933. 841 them  turn  on  their own facts and  do  not  elucidate  the principle  beyond  what  was laid down in  Amba  Lal’s  case (supra) It  cannot  be  disputed that in,  proceeding  for  imposing penalties. under Clause (8) of S.167 to which s.  178-A-does not  apply,  the,  burden  of proving  that  the  goods  are smuggled goods, is on the Department.  This is a fundamental rule  relating  to proof in all criminal  or  quasi-criminal proceedings,  where there is no statutory provision to.  the contrary.   But in appreciating its scope And the nature  of the  onus.  cast  by it, we must pay  due  regard  to  other kindred  principles,  no  less  fundamental,  of   universal application.   One  of them is that the prosecution  or  the Department  is  not required to prove its case  with  mathe- matical  precision  to a demonstrable degree;  for,  in  all human  affairs. absolute certainty is a myth,  and-as  Prof. Brett  felicitously  puts  it all exactness is  a  fake"  El Dorado of absolute proof being unattainable, the law accepts for it, probability as a working substitute in this  work-a- day  world.   The law does not require  the  prosecution  to prove   the  impossible.   All  that  it  requires  is   the establishment  of’  such  a degree  of  probability  that  a prudent  man may, on its basis, believe in the existence  of the  fact  in issue.  Thus, legal proof is  not  necessarily perfect  proof.;  often it is nothing more  than  a  prudent man’s estimate as to the probabilities of the case. The other; cardinal principle having an important bearing on the  incidence  of burden of proof is that  sufficiency  and weight  I  of the evidence is to be  considered-to  use  the words of Lord Mansfield in Batch v. Archer(1) "according  to the  proof which it was in the power of one side  to  prove, and in the power of the other to have contradicted".   Since it  is exceedingly difficult, if not absolutely  impossible, for  the  prosecution to prove facts  which  are  especially within  the knowledge of the opponent or the accused, it  is not obliged to prove them as parts of its primary burden. Smuggling  is clandestine conveying of goods to avoid  legal duties.Secrecy and stealth being its covering guards, it  is impossible  for the Preventive Department to  unravel  every link  of the process.  Many facts relating to  this  illicit business remain in the special or peculiar knowledge of  the person concerned in it.  On the principle underlyings.  106, Evidence  Act, the burden to establish those facts  is  cast on,  the person concerned; and if he fails to  establish  or explain those facts, an adverse inference of facts may arise against  him,  which coupled with the  presumptive  evidence adduced  by the prosecution or: the Department  would  rebut the  initial  presumption  of innocence in  favour  of  that person, and in the result prove him guilty.  As pointed  out by Best in ’Law of Evidence’, (12th Edn.  Article 320,  page 291),.   the  ".Presumption  of  innocence  is,  no   doubt, presumption  juris, but every day’s practice shows  that  it may be successfully encountered by the presumption of  guilt arising  from the recent (unexplained) possession of  stolen property", though the latter is only a presumption of  fact- Thus the burden on the prosecution or the Department may  be considerably  lightened  even by such  presumption  of  fact arising in their- (1)  (1774) 1, Cowp. 63 at p. 65. 842 favour.   However,  this does not mean that the  special  or peculiar  knowledge  of the person  proceeded  against  will

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relieve the prosecution or the Department altogether of  the burden of producing some evidence in respect of that fact in issue.   It  will only alleviate that  burden  to  discharge which very slight evidence may suffice. Another point to be noted is that the incidence, extent  and nature   of  the  burden  of  proof  for   proceedings   for confiscation  under the first part of the entry in  the  3rd column  of Clause (8) of s. 167, may not be the same  as  in proceedings when the imposition of the other kind of penalty under the second part of the entry is contemplated.  We have already  alluded to this aspect of the matter.  It  will  be sufficient to ’reiterate that the penalty of confiscation is a penalty in rem which is enforced against the goods and the second kind of penalty is one in person am which is enforced against the person concerned in the smuggling of the  goods. In  the case of the former, therefore, it is  not  necessary for  the  Customs authorities to prove that  any  particular person  is  concerned  with  their  illicit  importation  or exportation.  It is enough if the Department furnishes prima facie proof of the goods being smuggled stocks.  In the case of  the latter penalty, the Department has to prove  further that  the  person  proceeded against was  concerned  in  the smuggling. The,  propriety  and legality of  the  Collector’s  impugned order  had  ;to  be  judged  in  the  light  of  the   above principles. It is not correct to say that this is a case of no evidence. While  it  ,is true that no direct evidence of  the  illicit importation  of the goods was adduced by the Department,  it had made available to the Collector several circumstances of a  determinative character which coupled with the  inference arising  from  the  dubious  conduct  of  Baboothmull.   and Bhoormull, could reasonably lead to the conclusion drawn  by the  Collector,  that  they  were  smuggled  goods.    These circumstances  have  been  set out by  us  earlier  in  this judgment.   We may recapitulate only the most salient  among them. The  importation  of such goods into India had  been  banned several years, earlier, i.e. of some of them in 1957 and  of others in 1960.  These goods, without exception, were all of foreign  origin.   They  were of large  value  of  over  Rs. 12,000/-.   They were all lying packed as if they  had  been freshly  delivered, or were ready for despatch to a  further destination.  They were not lying exhibited for sale in  the showcases  of  the shop.  Baboothmull  from  whose  apparent custody or physical possession, they were seized  disclaimed not  only their ownership but also all knowledge  about  the contents of the packages.  He could not give a  satisfactory account  as to how those packages came into his  shop.   ’At first,  he said that some next-door unknown broker had  left them  outside his shop.  Some days later, he came  out  with another  version  viz.,  that one Bhoormull  had  left  them there.   Eight ,days after, one mysterious person  who  gave out  his  name  as Bhoormull, laid  claim  to  these  goods. Despite repeated requisitions, Bhoormull did not furnish any information regarding the source of the alleged  acquisition of  the  goods.   He never appeared  personally  before  the Collector.  He remained behind the scenes.  He did not  give addresses 843 or  sufficient particulars of the brokers who had  allegedly sold  the  goods to him on the 3rd June.   Whatever  cryptic information was given by him, was also conflicting.  Despite two show-cause notices, Bhoormull intransigently refused  to disclose any further information.  Apart from making a  bare

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claim, he did not furnish evidence of his ownership or  even juridical  possession of the goods.  The totality  of  these circumstances reinforced by the inferences arising from  the conduct  of Baboothmull and Bhoormull could  reasonably  and judicially  lead one to conclude that these goods  had  been illicitly imported into Madras, a sea port. Even if the Division Bench of the High Court felt that  this circumstantial evidence was not adequate enough to establish the  smuggled  character of the goods,  beyond  doubt,  then also, in our opinion, that was not a good ground to  justify interference, with the Collector’s order in the exercise  of the  writ jurisdiction under Art. 226 of  the  Constitution. The  function  of weighing the evidence or  considering  its sufficiency  was  the  business  of  the  Collector  or  the appellate  authority which was the final tribunal  of  fact. "For weighing evidence and drawing inferences from it", said Birch  J.  in R. Madhub Chander(1) "there can be  no  canon. Each case presents its own peculiarities and in each  common sense and shrewdness must be brought to bear upon the  facts elicited." It follows from this observation that so long  as the Collector’s appreciation of the circumstantial  evidence before  him  was not illegal, perverse or devoid  of  common sense, or contrary to rules of natural  justice there  would be  no  Warrant for disturbing his finding under  Art.  226. The collector’s order was not of,this kind. In  the  view   that  the  initial  ’onus  of  proof.on  the Department can be sufficiently discharged by  circumstantial evidence, we are supported by the decision of this  Court,in Issardas Daulat Ram’s case (supra).  There, on September 14, 1954, that is, long before the insertion of s. 178-A in  the Act,  a quantity of gold to a.refinery, in.Bombay  was  sent for  the purpose of melting, The Customs authorities  seized this  gold when it was being melted.  The gold was found  to be  of  foreign origin and had been imported into  India  in contravention of the Foreign Exchange Regulations Act, 1947. The  Collector of Customs confiscated it under S. 167(8)  of the’-Act.  The legality of confiscation was challenged by  a petition under art. 226 of the Constitution before the  High Court,  on the ground that there was no evidence before  the Collector to show that the gold had been imported into India after  restrictions  had been imposed in March 1947  on  its importation.   The High Court rejected this  contention  and dismissed  the  petition.  The same  argument  was  advanced before  this Court in appeal by special leave.   This  Court also negatived this contention.  While conceding that  there was no direct evidence that the gold had been smuggled after March 1947, it was held that a finding to that effect  could be reached by referring to "the conduct of the  appellant in connection  with (a) the credibility of the story about  the purchase  of this gold from three parties, (b) the price  at which the gold was stated to have been (1)  (1874) 21, W.R. Cr. 13, at 19. 844 purchased  which was less than the market price and (c)  the hurry  ,exhibited  in trying to get the gold melted  at  the refinery.with  a small bit of silver added,’ so  as  reduce, the  fineness  of,  the,  gold  and  thus  approximate   the resultant product to licit gold found in the market." The  rule in Issardas Daulat Ram’s case was reiterated  with amplification  in  M/s.   Kanungo  &  Co.’r  case   (supra). Therein,  the appellant was a firm carrying on business,  as dealer,  importer and repairer of watches.  On a  search  of the  firm’s  premises  on  October  17,  1959,  the  Customs authorities  seized 390 watches out of which 250  were  con- fiscated on the ground that they had been illicitly imported

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into  India.  The firm’s petition under Article 226  of  the Constitution  was. allowed by a learned single Judge of  the High Court and the order of confiscation was quashed on  the ground  that  the customs authorities had  failed  to  prove illicit  importation  of  the watches.  On  appeal,  by  the Department,  the Division Bench of the.High  Court  reversed the decision of the single Judge with these observations               "The  watches were seized from the  possession               of  the respondent No. 1 (appellant)  who  had               not obtained a licence or a customs  clearance               permit for importation of the same.  They were               of  foreign make and. must have  been,imported               across    the.    customs    frontier.     The                             explanations  offered by the Responden t  No.  1               regarding its coming, Into possession of,  the               same  between 1956 and 1957 were  found.  upon               enquiries  by the customs authorities,  to  be               false,  the  result of  these  enquiries  were               communicated  to the Respondent No. 1 who  was               thereafter heard by the adjudicating  officer.               Yet no attempt was made by the respondent  No.               1  to substantiate its claim regarding  lawful               importation   of  the   watches.........   The               customs  authorities  came to  the  conclusion               that  the  said  280  watches.were   illegally               imported  and  thereupon  made  an  order  for               confiscation of the same.  It is not for  this               Court, in exercise, of its jurisdiction  under               Art.  226 of the Constitution to  revise,  set               aside  or  quash this order, in the  facts  of               this case."               In  appeal  on certificate, it  was  contended               before  this Court that there was no  evidence               that  these  watches had  not  been  illicitly               imported  ’into  India and that  the  impugned               order  wrongfully  placed the  burden  on  the               appellants.    Sikri   C.J.,   speaking    for               the.Court, repelled this contention thus               "There  is also no force in the  second  point               because  we do not read the impugned order  as               having  wrongly  placed  the  burden  on   the               appellant.   What the impugned order  does  is               that  it refers to the evidence on the  record               which  militates  against the version  of  the               appellant  and then states that the  appellant               had  not  been  able to  meet  the  inferences               arising  therefrom. In our opinion,  the  High               Court was right in holding that the burden  of               proof  had shifted on to the  appellant  after               the  Customs  Authorities  had  informed   the               appellant of the results of the enquiries  and               investigations.                            845               This also disposes of the first point.  As  we               have  said,  the  burden was  on  the  Customs               Authorities    which   they   discharged    by               falsifying  in many particulars the story  put               forward  by  the  appellant..............   It               cannot  be disputed that a false denial  could               be  relied on by the Customs  Authorities  for               the  purpose of coming to the conclusion  that               the goods had been illegally imported." In   the  case  before  us,  the   circumstantial   evidence suggesting  the  inference  that the  goods  were  illicitly

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imported  into  India, was similar  and  reasonably  pointed towards the conclusion drawn by the Collector.  There was no violation  of the rules of natural justice.   The  Collector had given the fullest opportunity to Bhoormull to  establish the alleged acquisition of the goods in the normal course of business.   In doing so, he was not throwing the  burden  of proving what the Department had to establish, on  Bhoormull. He was simply giving him a fair opportunity of rebutting the first  and  the foremost presumption that arose out  of  the tell-tale  circumstances  in  which the  goods  were  found, regarding  their being smuggled goods, by  disclosing  facts within his special knowledge. Amba  Lal’s  case  (supra)  strongly  relied  upon  by   Mr. Ramamurthi,  is  clearly distinguishable on  facts.   There, Amba Lal was originally a resident of Pakistan.  He migrated into  India  on the partition of  the  Indian  Sub-continent before March 1948 when the customs barrier between India and Pakistan was raised for the first time.  The Department  did not  lead any evidence, circumstantial or direct,  that  the goods  seized  from Amba Lal had  been  illicitly  imported. Amba  Lal  gave plausible explanation that  he  had  brought those  goods  along  with him in 1947, when  there  were  no restrictions  on their importation. The Department  however, tried to take advantage of certain alleged discrepancies  in the  statements of Amba Lal which were recorded in  English. Amba  Lal  did not know English.  He was not  supplied  with copies  of  those statements, nor allowed to  inspect  them. This  Court,  therefore, held that the  Department  was  not entitled  to  rely  on those  discrepancies.   Quoting  from Shambhu Nath Mehra v. State of Ajmer,(1) the Court said that s. 106.  Evidence Act "cannot be used to undermine the  well established  rule  of law that, save in a  very  exceptional class  of cases, the burden is on the prosecution and  never ,sifts." It was added "If S. 106 of the Evidence Act is applied, then, by analogy, the  fundamental principles of criminal  jurisdrudence  must equally be invoked". If  we  may say so with great respect, it is not  proper  to read into the above observations more than what the  context and  the peculiar facts of that case demanded.  While it  is true  that in criminal trials to which the Evidence Act,  in terms, applies, this section is not intended to relieve  the prosecution of the initial burden which lies on it to prove (1) [1956] S.C.R. 199. 846 the  positive, facts of its own case, it can be said by  way of  generalisation  that the effect of  the  material  facts being exclusively or especially within the knowledge of  the accused, is that it may proportionately with the gravity  or the  relative  triviality of the issues at  stake,  in  some special  type of cases, lighten the burden of proof  resting on the prosecution.  For instance, once it is shown that the accused was travelling without a ticket, a prima facie  case against  him  is proved.  If he once had such a  ticket  and lost  it, it will be for him to prove this fact within  this special  knowledge.  Similarly, if a person is proved to  be in  recent possession of stolen goods, the prosecution  will be deemed to have established the charge that he was  either the thief or had received those stolen goods knowing them to be  stolen.  If his possession was innocent and  lacked  the requisite  incriminating knowledge, then it will be for  him to  explain  or establish those facts  within  his  peculiar knowledge, failing which the prosecution will be entitled to take  advantage of the presumption of fact  arising  against him, in discharging its burden of proof.

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These  fundamental principles, shorn of technicalities,  as we  have  discussed  earlier,  apply only  in  a  broad  and pragmatic  way  to proceedings under s. 167(8) of  the  Act. The  broad effect of the application of the basic  principle underlying  s. 106 Evidence Act to cases under s. 167(8)  of the  Act,  is that the Department would be deemed.  to  have discharged  its burden if it adduces only so much  evidence, circumstantial  or  direct,  as is  sufficient  to  raise  a presumption  in its favour with regard to the  existence  of the facts sought to be proved. .Amba Lal’s. case was a  case of no evidence.  The oily circumstantial evidence viz.,  the conduct of Amba Lal in making conflicting statements,  could not  be  taken into account because he was never  given  ,an opportunity  to  explain  the  alleged  discrepancies.   The status  of  Amba  Lal viz. that he  was  an  immigrant  from Pakistan  and had come to India in 1947 before  the  customs barrier  was  raised- bringing along with him the  goods  in question,  had greatly strengthened the initial  presumption of innocence in his favour.  Amba Lal’s ’case thus stands on its own facts. The  present case is in line with the decisions in  Issardas Daulatram  v. Union of India and.  M/s.  Kanungo &  Co.   v. Collector of, Customs (supra). For all the foregoing reasons, we are of the opinion thatthe learned Judges of the High Court were in error. in reversing the  judgment of the learned. single Judge and  in  quashing the order ofthe  Collector  of  Customs.  We,  therefore, allow this appeal,  set asidethe judgment under appeal  and dismiss the writ petition. in view ofthe    law     point involved,  we  would  leave the parties  to  bear-their  own costs. S.B.W. Appeal  allowed. 847