1981 (12) TMI 43 - HC - Customs

Issues Involved:
1. Legality of the seizure of foreign whisky bottles.
2. Applicability of Section 123 of the Customs Act, 1962.
3. Burden of proof under Section 123 of the Customs Act.
4. Legality of the search conducted by the Customs Officer.
5. Involvement and knowledge of the accused regarding the possession of smuggled goods.
6. Validity of the acquittal by the Special Judge for Economic Offences.

Issue-wise Detailed Analysis:

1. Legality of the Seizure of Foreign Whisky Bottles:
The prosecution's case was that on 13-3-1974, the Superintendent of Central Excise and Customs, along with his inspectors, searched the house of the accused and found 56 bottles of liquor in the living room and 12 bottles in the car's dicky. The bottles were seized under a panchanama, Ex. P. 6, as they were believed to be smuggled goods. The accused failed to produce any documentary evidence to show that the seized bottles were not smuggled goods. The first accused admitted the bottles belonged to him, while the second accused denied any knowledge of the bottles found in the house or car.

2. Applicability of Section 123 of the Customs Act, 1962:
Section 123 of the Act shifts the burden of proof to the person from whose possession the goods were seized if they are believed to be smuggled. The court examined whether the seizure was made in the reasonable belief that the goods were smuggled. The court noted that the belief must rest on relevant information and not mere speculation. The court found that the circumstances (appearance of the goods, inscriptions, and lack of legal possession documents) were sufficient to raise a reasonable belief that the goods were smuggled.

3. Burden of Proof under Section 123 of the Customs Act:
The court held that the prosecution had established a reasonable belief that the goods were smuggled, shifting the burden of proof to the accused. The accused admitted in their statements that they purchased the whisky from unknown persons in Hyderabad. The court noted that the accused failed to discharge the burden of proof cast under Section 123 of the Act.

4. Legality of the Search Conducted by the Customs Officer:
The accused contended that the search was illegal as it was conducted by an unauthorised person. However, the court found that the accused did not raise any objection to the search and seizure during the trial. The court held that even if the search was illegal, it would not affect the validity of the seizure and further investigation. The court relied on the evidence of P.W. 3, the panch witness, who corroborated the seizure of the whisky bottles.

5. Involvement and Knowledge of the Accused Regarding the Possession of Smuggled Goods:
The court found that there was no evidence to show that the second accused (A-2) had any knowledge or involvement in the possession of the foreign whisky bottles. The first accused (A-1) admitted that he purchased the whisky bottles without his father's knowledge. Therefore, the court upheld the acquittal of A-2 but found A-1 guilty under Section 135(1)(b)(ii) of the Act.

6. Validity of the Acquittal by the Special Judge for Economic Offences:
The court found that the Special Judge for Economic Offences erred in acquitting the accused. The court held that the prosecution had established a reasonable belief that the goods were smuggled and that the accused failed to rebut the presumption under Section 123 of the Act. The court set aside the acquittal of A-1 and convicted him under Section 135(1)(b)(iii) of the Customs Act, sentencing him to pay a fine of Rs. 1,000 and in default to suffer rigorous imprisonment for six months.

Conclusion:
The appeal was partly allowed, with the acquittal of A-1 being set aside and a conviction under Section 135(1)(b)(iii) of the Customs Act being imposed. The acquittal of A-2 was upheld due to the lack of evidence of his involvement or knowledge of the smuggled goods.

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