1960 (4) TMI 1 - HC - Customs

Summary

Issues Involved:
1. Legality of the confiscation of gold.
2. Imposition of personal penalties on the petitioners under Section 167(8) of the Sea Customs Act.
3. Evidence required to prove involvement in the act of smuggling.
4. Maintainability of the petitions due to non-exhaustion of alternative remedies.

Issue-wise Detailed Analysis:

1. Legality of the Confiscation of Gold:
The Collector ordered the confiscation of 171-7/32 tolas of gold seized from the petitioners, asserting it was smuggled gold. The petitioners contested the confiscation, arguing that only 70 tolas of gold were admitted by Bijraj to be smuggled. The Court examined whether there was material evidence for the Collector to conclude that the entire quantity seized was smuggled gold. The Court found that there was material evidence, including Bijraj's admission and the transactions with Bangalore firms, to support the Collector's conclusion. The Court noted that the petitioners failed to provide a satisfactory explanation for the possession of the remaining gold, thereby justifying the confiscation order.

2. Imposition of Personal Penalties on the Petitioners under Section 167(8) of the Sea Customs Act:
The Collector imposed personal penalties of Rs. 15,000 on Bijraj, and Rs. 10,000 each on Vanechand and Sampathraj. The Court highlighted that Section 167(8) requires proof that the person was "concerned in such offence" of smuggling. The Court referenced previous decisions, emphasizing that mere knowledge of the gold being smuggled does not constitute involvement in the act of smuggling. The Court found no specific finding by the Collector that the petitioners were involved in the act of smuggling itself. Consequently, the imposition of personal penalties was deemed unjustified and was set aside.

3. Evidence Required to Prove Involvement in the Act of Smuggling:
The Court reiterated that to impose penalties under Section 167(8), it must be shown that the accused either imported the gold or was concerned in its importation. This includes arranging for, abetting, or receiving the gold immediately after importation. The Court found that the Collector's basis for penalties was the purchase of smuggled gold from Bangalore dealers, without evidence of direct involvement in smuggling. The Court concluded that purchasing smuggled gold, even with knowledge of its origin, does not suffice to prove involvement in the smuggling act.

4. Maintainability of the Petitions Due to Non-exhaustion of Alternative Remedies:
The Additional Government Pleader raised a preliminary objection regarding the maintainability of the petitions, citing the availability of an alternative remedy of appeal under the Sea Customs Act. The Court acknowledged this but noted that the imposition of penalties without jurisdiction, due to lack of evidence of involvement in smuggling, warranted judicial interference. The Court decided to exercise its discretion in favor of issuing a writ of certiorari, setting aside the personal penalties despite the petitioners not availing themselves of the alternative remedy.

Conclusion:
The Court confirmed the rule nisi to the extent of setting aside the orders imposing personal penalties on the petitioners, while allowing the confiscation order to stand. A writ of certiorari was issued to annul the personal penalties, with no order as to costs.