1960 (2) TMI 5 - HC - Customs

Issues Involved:
1. Validity of the order of confiscation and personal penalty.
2. Preliminary objection regarding the maintainability of the petition.
3. Application and invocation of Section 178A of the Sea Customs Act.
4. Burden of proof regarding the smuggled nature of the gold.
5. Evidence supporting the conclusion that the gold was smuggled.
6. Evidence supporting the involvement of the second petitioner in the smuggling.

Issue-wise Detailed Analysis:

1. Validity of the order of confiscation and personal penalty:
The petitioners challenged the order dated 15th June 1959, made by the Collector of Central Excise and Land Customs, Bombay, which ordered the confiscation of certain gold and levied a personal penalty of Rs. 10,000 upon the second petitioner. The petitioners sought a writ of certiorari to quash the order, a writ of prohibition to prevent enforcement, and a writ of mandamus to withdraw or cancel the order.

2. Preliminary objection regarding the maintainability of the petition:
The respondents raised a preliminary objection as to the maintainability of the petition, arguing that adequate remedies by way of appeal and revision were available under the Sea Customs Act. However, the petitioners challenged the validity of Section 178A of the Sea Customs Act, making the preliminary objection untenable. The court noted that it was bound by the judgment in Pukhraj v. D.R. Kohli, which upheld the validity of Section 178A.

3. Application and invocation of Section 178A of the Sea Customs Act:
The petitioners contended that the burden of proof that the gold was not smuggled lay with the Customs Department, as Section 178A was not invoked. The court noted that Section 178A is a rule of evidence and its invocation is determined by the officers conducting the inquiry. The show cause notice did not indicate that Section 178A was invoked, and the order did not specifically reference Section 178A or shift the burden of proof to the petitioners.

4. Burden of proof regarding the smuggled nature of the gold:
The court concluded that Section 178A was not invoked in this case, meaning the burden of proof remained with the Customs Department. The court emphasized that the burden of proof was on the Customs Department to establish that the gold was smuggled.

5. Evidence supporting the conclusion that the gold was smuggled:
The court examined the evidence, including the statements of Chhotalal and the second petitioner, the assay report, and the conduct of the parties involved. The court found that the evidence presented by the Customs Department was insufficient to establish that the gold was smuggled. The inference that the gold was smuggled was based on suspicion and surmise rather than concrete evidence.

6. Evidence supporting the involvement of the second petitioner in the smuggling:
The court found no evidence to support the conclusion that the second petitioner was involved in the smuggling of the gold. The lack of evidence regarding the date of importation and the absence of proof that the gold was smuggled meant that the second petitioner could not be held responsible for smuggling.

Conclusion:
The court held that there was no evidence to support the conclusion that the gold was smuggled or that the second petitioner was involved in smuggling. Consequently, the order for confiscation and the imposition of a personal penalty were quashed. A writ of certiorari was issued to quash the order, and a writ of mandamus was issued directing the first respondent to return the seized gold to the petitioners within one month. The first respondent was ordered to pay the petitioners' costs, fixed at Rs. 700.

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