1969 (2) TMI 63 - HC - Customs

Summary

Issues Involved:
1. Conviction under Section 135(b) read with Section 135(ii) of the Customs Act, 1962.
2. Conviction under Rule 126H(2)(d) read with Rule 126P(2)(iv) and Rule 126I(10) read with Rule 126P(2)(ii) of the Defence of India Rules, 1963.
3. Possession of seven slabs of gold and Indian currency.
4. Purity and origin of the gold slabs.
5. Application of burden of proof under Section 123(1) of the Customs Act, 1962.
6. Request for additional evidence under Section 428 of the Code of Criminal Procedure.

Detailed Analysis:

1. Conviction under Section 135(b) read with Section 135(ii) of the Customs Act, 1962:
The accused was charged with carrying and concealing seven slabs of gold, suspected to be smuggled, thereby violating Section 135(b) of the Customs Act, 1962. The prosecution needed to establish that the gold was imported in contravention of the provisions of the Customs Act and that the accused knew or had reason to believe that the gold was liable to confiscation under Section 111(d) of the Act. The court found that the prosecution failed to provide direct evidence that the gold was of foreign origin and smuggled into India. The markings on the slabs were insufficient to conclude their foreign origin, and the prosecution did not establish that the gold was imported without the Reserve Bank's permission. Consequently, the conviction under Section 135(b) was set aside.

2. Conviction under Rule 126H(2)(d) read with Rule 126P(2)(iv) and Rule 126I(10) read with Rule 126P(2)(ii) of the Defence of India Rules, 1963:
The accused was also charged under the Defence of India Rules for acquiring and possessing the gold slabs without proper authorization. Rule 126H(2)(d) prohibits the acquisition of gold by anyone other than a licensed dealer, and Rule 126I(10) requires that any gold acquired must be declared. The definition of "gold" under Rule 126A(d) specifies that it must be of purity not less than nine carats. The prosecution failed to provide evidence of the gold's purity, and the Mint Master's report, which could have established this, was not produced in court. The court denied the prosecution's request to introduce additional evidence under Section 428 of the Code of Criminal Procedure, citing negligence and the potential harassment of the accused. Thus, the charges under the Defence of India Rules were also not proven, and the conviction was set aside.

3. Possession of seven slabs of gold and Indian currency:
The accused denied possession of the gold slabs, claiming they were forcibly attributed to him by the police. The court did not find it necessary to resolve this issue definitively, given the failure to prove the gold's origin and purity. The accused admitted possession of Rs. 1,340 in currency, which was ordered to be returned to him.

4. Purity and origin of the gold slabs:
The prosecution's evidence regarding the gold's purity and origin was inadequate. The markings on the slabs were insufficient to establish their foreign origin, and no direct evidence was provided to show they were smuggled. The Mint Master's report, which could have established the gold's purity, was not produced, leading to the failure of the charges under the Defence of India Rules.

5. Application of burden of proof under Section 123(1) of the Customs Act, 1962:
Section 123(1) shifts the burden of proof to the accused when goods are seized by Customs authorities in the reasonable belief that they are smuggled. However, in this case, the gold slabs were seized by the Railway Police and later handed over to Customs authorities. The court ruled that the burden of proof did not shift to the accused, as the goods were not seized directly by Customs authorities from the accused's possession.

6. Request for additional evidence under Section 428 of the Code of Criminal Procedure:
The prosecution's request to introduce additional evidence (Mint Master's report) was denied. The court emphasized that additional evidence should only be allowed for special reasons and not to fill gaps in the prosecution's case due to negligence. Allowing additional evidence would prolong the trial and cause undue harassment to the accused.

Conclusion:
The appeal was allowed, and the order of conviction was set aside. The accused was acquitted of all charges. The court ordered the return of Rs. 1,340 to the accused and canceled the bail bond. The fine, if already recovered, was to be refunded to the accused.