1962 (4) TMI 106 - HC - Central Excise

Summary

Issues: Validity of order of confiscation under Sea Customs Act and Foreign Exchange Regulation Act, principles of natural justice in making the order

Analysis:
1. The petitioners challenged the validity of the order of confiscation under Section 167 (8) of the Sea Customs Act and Section 23-A of the Foreign Exchange Regulation Act. They contended that the Collector did not consider the burden of proof on the Department and violated the principles of natural justice. The petitioners, who were bullion dealers, had gold seized from their residence, leading to the confiscation order. The Collector relied on circumstantial evidence, including foreign marks on gold ingots, lack of entries in accounts, and false information provided by the petitioners.

2. The petitioners argued that the burden of proving the seized gold was smuggled was on the Department, emphasizing the ban on gold import since 1939. The introduction of Section 178-A in the Sea Customs Act shifted the burden of proof to the person from whom the goods were seized. The petitioners questioned the reasonable belief of the officer who seized the gold, but the court found the search warrant obtained and the circumstances justified the seizure.

3. The petitioners also alleged a violation of natural justice, claiming the Collector did not question key witnesses in their presence. However, the court found that the Collector's decision was based on admitted facts, such as the concealment of gold, lack of entries in accounts, and false statements by the petitioners. The court held that the circumstances were incriminating and did not require further examination of witnesses.

4. The court rejected the argument that mentioning sellers' names absolved the petitioners of responsibility, emphasizing the seriousness of receiving smuggled goods. The court distinguished previous cases where evidence was relied upon without allowing cross-examination. Ultimately, the court upheld the confiscation order, considering the established facts, circumstances, and legal presumption under Section 178-A.

Conclusion:
The court dismissed the petition, upholding the Collector's confiscation order and imposing costs on the petitioners. The court found no valid objections to the Collector's decision, emphasizing the incriminating circumstances and the burden of proof under the relevant statutory provisions.