1960 (10) TMI 1 - SC - Customs

Whether onus of proving the import of the goods lay on the appellant? Held that - We cannot accept the contention that by reason of the provisions of Section 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. If Section 106 of the Evidence Act is applied, then, by analogy, the fundamental principle 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. 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. having regard to the circumstances under, and the manner, in which the said confession 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 prevail. The order of confiscation of these five items will, therefore, stand. Appeal partly allowed.

Issues Involved:
1. Onus of proof regarding the import of goods (Items 1 to 5).
2. Admissibility and reliability of the appellant's statement.
3. Confiscation and penalty concerning Items 6 to 10.
4. Jurisdiction of the Customs authorities to impose conditions for the release of confiscated goods.
5. Proportional reduction of the redemption amount due to partial invalidation of confiscation.

Issue-wise Detailed Analysis:

1. Onus of Proof Regarding the Import of Goods (Items 1 to 5):
The primary issue revolves around whether the burden of proof lies on the appellant or the customs authorities. The Collector of Central Excise and the Central Board of Revenue held that the onus of proving the import of the goods lay on the appellant. The Court emphasized that the customs authorities did not provide any evidence to establish that the goods were smuggled into India after the customs barrier against Pakistan was raised in March 1948. The appellant's claim that he brought the goods into India in 1947 was not substantiated by any acceptable evidence beyond his statements at the time of seizure and inquiry. The Court underscored that the fundamental principles of criminal jurisprudence and natural justice must apply, placing the burden of proof on the customs authorities. Since the customs authorities failed to provide satisfactory evidence, the order of confiscation relating to Items 1 to 5 was set aside.

2. Admissibility and Reliability of the Appellant's Statement:
The appellant contended that his statement at the time of seizure was taken in English, a language he did not understand, and he was not granted access to inspect or obtain a copy of the statement. The Court observed that the customs authorities relied on this statement to reject the appellant's claim about the goods being brought into India in 1947. The Court found that the customs authorities were not justified in relying on the statement without giving the appellant an opportunity to inspect it or providing him with a copy. This procedural lapse further weakened the case against the appellant regarding Items 1 to 5.

3. Confiscation and Penalty Concerning Items 6 to 10:
The appellant admitted before the Collector of Central Excise that Items 6 to 10 were smuggled goods from Pakistan. The Court noted that while it would have been preferable for the customs authorities to obtain this admission in writing, the circumstances under which the confession was made did not cast doubt on its correctness. Consequently, the finding that the appellant purchased smuggled goods was upheld. However, the appellant argued that he should not be penalized under Section 167(8) of the Sea Customs Act since he was not involved in the importation of the goods. The Court found merit in this argument but held that the appellant was liable for a penalty under Section 7(1)(c) of the Land Customs Act for keeping the goods with knowledge that they were smuggled.

4. Jurisdiction of the Customs Authorities to Impose Conditions for the Release of Confiscated Goods:
The appellant challenged the jurisdiction of the Collector of Central Excise to impose conditions for the release of confiscated goods, such as the payment of import duty and other charges. The Court referred to a precedent (Shewpujanrai Indrasanrai Ltd. v. Collector of Customs) where similar conditions were deemed beyond the jurisdiction of the customs authorities. The Additional Solicitor General conceded that this precedent applied to the present case. Consequently, the Court held that the conditions imposed by the Collector of Central Excise should be deleted from the order.

5. Proportional Reduction of the Redemption Amount Due to Partial Invalidation of Confiscation:
The appellant argued that the option to redeem the confiscated goods for Rs. 25,000 was based on the confiscation of all ten items, and since the Court invalidated the confiscation of Items 1 to 5, the redemption amount should be proportionately reduced. The Court acknowledged the justification for this contention but noted that the amount under Section 183 of the Sea Customs Act must be fixed by the concerned officer. Therefore, the Court granted the appellant liberty to apply to the customs authorities for a revised redemption amount in light of the changed circumstances.

Conclusion:
The appeal was allowed in part. The order of the Collector of Central Excise was modified to set aside the confiscation of Items 1 to 5, delete the conditions for the release of confiscated goods, and allow the appellant to seek a revised redemption amount. Both parties were directed to bear their own costs.

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