1992 (3) TMI 87 - SC - Customs

Whether the prosecution must further prove that the goods which were sought to be affected by the order of the Customs Officer were goods of foreign origin and there must be evidence in support of the reasonableness of the belief of the Customs Officer that the goods were smuggled goods? Held that - Apart from the fact that this question has not been raised, it is quite clear that when S. 178A of the Sea Customs Act provides that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods is on the person from whose possession the goods are seized. The onus is on him to show that the goods are not smuggled that is, not of foreign origin on which duty is not paid. The onus is not on the prosecution to show that the goods are not of Indian origin. Appeal dismissed.

Summary

Issues:
1. Constitutionality of S. 178A of the Sea Customs Act.
2. Requirement to prove goods of foreign origin for S. 178A applicability.
3. Prosecution under S. 23A of the Foreign Exchange Regulation Act and S. 167 (81) of the Sea Customs Act.
4. Appellant's defense and conviction.
5. Application of the presumption under S. 178A.
6. Burden of proof under S. 178A.

Constitutionality of S. 178A of the Sea Customs Act:
The appeal challenges the constitutionality of S. 178A of the Sea Customs Act, which had been previously upheld by the Supreme Court in a prior case. The issue raised pertains to the legality of this section.

Requirement to prove goods of foreign origin for S. 178A applicability:
A new argument was presented during the appeal, suggesting that for S. 178A to apply, it must be proven that the goods in question are of foreign origin. The prosecution must also provide evidence supporting the Customs Officer's belief that the goods are smuggled, a point not raised in lower courts.

Prosecution under S. 23A of the Foreign Exchange Regulation Act and S. 167 (81) of the Sea Customs Act:
The appellant was prosecuted under these sections for possessing gold without the required permit, prohibited under the Foreign Exchange Regulation Act. The appellant's defense claiming the gold was left by a stranger was rejected in lower courts, leading to his conviction and subsequent appeals.

Appellant's defense and conviction:
The appellant's defense that he was not in possession of the gold bars found on him was refuted by Customs Officials in trial and appellate courts. Despite various appeals, the courts upheld the conviction based on the evidence presented.

Application of the presumption under S. 178A:
The argument in this case revolved around the application of the presumption under S. 178A of the Sea Customs Act. The section places the burden of proving goods are not smuggled on the person from whom they were seized, with specific goods listed under its application.

Burden of proof under S. 178A:
The Supreme Court clarified that under S. 178A, the burden of proof lies with the person from whom the goods were seized to demonstrate they are not smuggled. The section does not require the prosecution to prove the goods are of foreign origin, emphasizing the onus on the possessor to show the goods are not smuggled.

The judgment ultimately dismissed the appeal, affirming the lower courts' decisions and upholding the constitutionality and application of S. 178A of the Sea Customs Act.