1994 (3) TMI 90 - SC - Customs

Whether on basis of the recovery the appellant can be held to be guilty for an offence under Section 135(1)(a)of the Customs Act ? Held that - The prosecution has established that the appellant was concerned in an attempt at evasion of duty under the provisions of the Act as such committed the offence under first part of Section 135(1)(a) of the Act. He was also concerned in evasion of the prohibition imposed by sub-section (2) of Section 11J of the Act by not having delivered to the proper officer an intimation containing the particulars of the place where the silver ingots in such a huge quantity were to be kept and stored as such he committed the offence even under the second part of Section 135(1)(a) of the Act. The very fact that 3, 274.98 kgs. of silver ingots worth more than rupees 18 lakhs had been kept buried near the well in the garden leads to irresistible conclusion that the said silver ingots had not been kept or stored in normal course of business. Appeal dismissed.

Issues Involved:
1. Legality of the appellant's conviction under Section 135(1)(a) of the Customs Act.
2. Admissibility of the appellant's statement under Section 108 of the Customs Act.
3. Compliance with Section 11J of the Customs Act regarding the storage of specified goods.
4. Existence of culpable mental state under Section 138A of the Customs Act.

Detailed Analysis:

1. Legality of the appellant's conviction under Section 135(1)(a) of the Customs Act:
The appellant was convicted for an offence under Section 135(1)(a) of the Customs Act, which pertains to being knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable on goods or any prohibition imposed under the Act. The prosecution established that the appellant was involved in the concealment of 101 silver ingots, which were recovered from his Wadi. The appellant's defense that the Wadi belonged to his wife and that he was not present during the recovery was rejected based on his own statements and the evidence presented by the prosecution.

2. Admissibility of the appellant's statement under Section 108 of the Customs Act:
The appellant's statement recorded under Section 108 of the Customs Act was deemed admissible. The court referenced the case of Veera Ibrahim v. State of Maharashtra, where it was established that a statement recorded by a Customs Officer under Section 108 before any formal accusation is made is not hit by Article 20(3) of the Constitution. The appellant's clear admission that the Wadi belonged to him and that the silver bars were buried there was used against him. No evidence was presented to suggest that the statement was made under coercion.

3. Compliance with Section 11J of the Customs Act regarding the storage of specified goods:
The prosecution argued that the appellant failed to comply with Section 11J of the Customs Act, which requires individuals to notify the proper officer of the storage location of specified goods exceeding a certain value. The appellant did not provide any intimation regarding the acquisition and storage of the silver ingots, which were valued at over 18 lakhs. This non-compliance constituted a fraudulent evasion of the prohibition imposed under Section 11J(2).

4. Existence of culpable mental state under Section 138A of the Customs Act:
The court applied Section 138A of the Customs Act, which presumes the existence of a culpable mental state unless the accused can prove otherwise. The appellant failed to provide any material to rebut this presumption. The court noted that the concealment of such a large quantity of silver ingots without proper intimation indicated an attempt to evade customs duties. The court referenced the case of State of Maharashtra v. Natwarlal Damodardas Soni, which established that circumstantial evidence could be used to prove the requisite guilty knowledge or mens rea.

Conclusion:
The court concluded that the prosecution successfully established that the appellant was involved in an attempt to evade duty under the Customs Act. The appellant's conviction under Section 135(1)(a) was upheld, and the appeal was dismissed. The trial court was directed to take necessary steps to ensure the appellant serves the remaining period of his sentence.

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