1986 (8) TMI 69 - HC - Customs

Prosecution - Customs - Burden of proof - Notified goods - Seizure - Smuggled goods - Evidence

Issues Involved:
1. Admissibility of the respondent's statement under Section 108 of the Customs Act.
2. Validity of the rental agreement (Ext. P3).
3. Legitimacy of the search and seizure of the godown.
4. Determination of the origin of the seized textile fabrics.
5. Application of the presumption under Section 123 of the Customs Act.
6. Establishment of 'mens rea' under Section 135(1)(b) of the Customs Act.
7. Non-production of the seized goods before the court.

Detailed Analysis:

1. Admissibility of the Respondent's Statement under Section 108 of the Customs Act:
The prosecution relied heavily on the statement given by the respondent under Section 108 of the Customs Act. The court noted that at the time the statement was recorded, the respondent was not accused of any offense, making the statement admissible under Section 21 of the Evidence Act as an admission of incriminating facts. This stance aligns with the precedent set in Veera Ibrahim v. The State of Maharashtra (1976) 2 S.C.C 302.

2. Validity of the Rental Agreement (Ext. P3):
The respondent's possession of the godown was established through the rental agreement (Ext. P3). The signature on Ext. P3 matched the respondent's signatures on various legal documents, including the bail bond and summons. The owner of the godown, who had given a statement under Section 108 of the Customs Act, confirmed the rental arrangement and the execution of Ext. P3. Despite the lower court's observation that the owner could not be examined due to his death, the High Court found the rental agreement validly proved.

3. Legitimacy of the Search and Seizure of the Godown:
The search and seizure were conducted by P.W.1 in the presence of the godown owner, the Village Officer, and other independent witnesses. The lower court's doubts about the search and seizure, based on the non-production of the broken lock and failure to obtain the key from the respondent, were dismissed by the High Court. The court found these grounds insufficient to discard the otherwise acceptable seizure.

4. Determination of the Origin of the Seized Textile Fabrics:
The seized fabrics were subjected to chemical examination by P.W.5, the Chemical Examiner of Customs House, Cochin. He concluded that the fabrics were of foreign origin, based on their composition and the fact that such textiles were not permitted to be manufactured in India during 1972-73. The High Court accepted this testimony and report, establishing the foreign origin of the seized goods.

5. Application of the Presumption under Section 123 of the Customs Act:
Section 123 of the Customs Act places the burden of proving that seized goods are not smuggled on the person from whose possession they were seized. The respondent failed to discharge this burden. The High Court referenced the Supreme Court's interpretation in Kewal Krishnan v. State of Punjab AIR 1967 S.C. 737, which supports the prosecution's stance. Additionally, Notification No. 52-Cus dated 27th March 1968 included fabrics made wholly or mainly of synthetic yarn within the purview of Section 123, allowing the statutory presumption to be invoked.

6. Establishment of 'Mens Rea' under Section 135(1)(b) of the Customs Act:
The High Court found that the respondent's conscious possession of smuggled goods implied the requisite 'mens rea' under Section 135(1)(b). The court cited the Supreme Court's observation in State of Maharashtra v. Natwarlal (AIR 1980 S.C. 593), which emphasized the broad interpretation of 'acquires possession' to include temporary control or custody of smuggled goods.

7. Non-production of the Seized Goods before the Court:
The lower court's criticism of the prosecution for not producing the entire seized goods was deemed erroneous. The prosecution had filed an application to take samples and dispose of the remaining goods, which was allowed by the Magistrate. A sample was kept in court and marked as M.O.1, satisfying the requirement for evidence.

Conclusion:
The High Court concluded that the prosecution successfully established the respondent's guilt under Section 135(1)(b)(i) of the Customs Act. Given the long lapse of time since the seizure and the penalties already imposed, the court decided against imprisonment, sentencing the respondent to a fine of Rs. 5,000, with a default imprisonment of one year. The appeal was allowed in these terms.

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