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TMI Blog2016 (9) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... rted between the years 1941 to 1949. In fact, the prohibition of import of gold came into force on 25th of August, 1948. Therefore, for more than two years, it is unbelievable that imported gold will be retained as such. Such stand of the Revenue has to be examined keeping in view the stand taken by the assessee that he purchased the gold when there was no prohibition and also stated that he purchased it from Reserve Bank of India through brokers. The assessee has failed to discharge the special fact within his knowledge as to when the gold was purchased and through whom the purchase of the gold was made. To avoid the rigour of prohibition, the onus was on the respondent being a fact within his special knowledge, thus, in terms of Section 106 of the Evidence Act, the onus was on respondent and thereafter his wife to prove that the gold imported is prior to prohibition vide notification dated 25th of August, 1948 and or has been purchased from the Reserve Bank of India. - there is no proof of any of these facts - learned Tribunal erred in law in holding that mere assertion that gold has been purchased cannot partake the character of proof of legal purchase. Seizure and confiscati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 15 lacs was imposed upon him and he was also awarded substantive sentence. After serving of the sentence of imprisonment, Sri Mitra died. 4. The Judicial Commissioner passed an order on 5th of January, 1993 after conclusion of trial to return valuables in the form of ornaments and gold of Indian and foreign origin to Smt. Nirmala Mitra after she deposited ₹ 17,95,375/- towards the fine and other awards. After such order was passed, the Assistant Collector, Central Excise filed a petition before Judicial Commissioner, after serving notice to the learned Advocate appearing on behalf of Smt. Nirmala Mitra, to the effect that the State Bank of India, Main Branch, Ranchi should give delivery of the valuables to Smt. Nirmala Mitra in the presence of the Central Excise and the representative of the Deputy Commissioner, Ranchi whereas foreign origin gold may be kept in the custody of the State Bank of India till necessary inquiry and investigation is made by the Central Excise. The Judicial Commissioner, inter alia, passed an order on 8th of January, 1993 to the following effect:- The official of the Central Excise will also remain present in order to locate as to whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of time, Sea Customs Act, 1878 was in operation. Section 178 A of the Sea Customs Act, 1878 which was/is parallel to the Section 123 of the Customs Act, 1962 was first incorporated vide Sea Customs (Amendment) Act, 1955. Thus Section 178A of the Sea Customs Act, 1878 was also not operative during the period of purchasing of foreign gold by Shri S.K. Mitra. Hence, the onus of providing the ingredient that the goods were illegally imported into the country is with the department. xxx xxx xxx (5) That the onus to prove that the gold is smuggled, is with the department and the department has failed to establish that the impugned gold was smuggled into the country. No inquiry has been made to substantiate the smuggled nature of gold in question. Even no inquiry has been made with the gold dealer M/S Choksi Manilal Chimanlal Company of Bombay whose bag was seized alongwith gold by the Bombay police during 1950. (6) That in his deposition before the Judicial Commissioner, Ranchi Shri S.K. Mitra had also told that he had purchased and imported the gold through Reserve Bank of India had hence a false allegation has been made in the show cause notice that the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icense of permit. The Act came into force during the year 1947. The impugned gold was detected and initially seized by the officers of C.I.D. Branch of Bombay Police in the year 1950 when Imports Exports (Control) Act, 1947 and Section 19 of Sea Customs Act, 1878 were already in force. A prohibition/restriction in respect of import of any class or category of goods imposed under Section 3(1 2) of Imports Exports (Control) Act was also deemed to be prohibited under Section 19 of the Sea Customs Act, 1878 which was not repealed but re-enacted as Section 11 of the Customs Act, 1962. 9. The Adjudicating Authority also recorded a finding that late Sri Mitra stated before the Bombay Police that he was doing business in gold and had acquired the foreign marked gold in question from Reserve Bank of India, Bombay through bankers/brokers. This version of late Sri S.K. Mitra was said to be incorrect as Late Sri Mitra was a State Government employee and during course of his service at Namkum Vaccination Institute, Ranchi (a State Government department), he defalcated huge amount of Government money and that no documents were produced in support of his purchase of gold from Reserve Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the appellant (the respondent herein) as when the gold in question was seized by the police in the year 1950, the provisions of Section 178A of the Sea Customs Act, 1878 or the provisions of Section 123 of the Customs Act, 1962 were not in operation. Referring to Supreme Court judgment in Amba Lal vs. UOI Ors., AIR 1961 SC 264 = 1983 ELT 1321 (SC), it was held that the provisions of the Sea Customs Act, 1878 or the Customs Act, 1962 were prospective in operation and will not apply in respect of the seizures made prior thereto. The Tribunal recorded the following finding:- 8. The appellant also succeeds on the second ground. Admittedly the gold in question was seized by the police in the year 1950, when the provisions of section 178A of the Sea Customs Act, 1878 or the provisions of Section 123 of the Customs Act, 1962 were not in operation. The question arises as to whether the said provisions can be made retrospective in operation and burden to prove can still be placed upon the accused. We find that the Hon ble Supreme Court in the case of Amba Lal v. UOI Ors.- 1983 ELT 1321 (SC) has held that the said provisions of the Sea Customs Act or the Customs Act, 1962 were pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective operation. 17. Learned counsel for the Revenue argued that Section 3 of the Import and Export (Control) Act, 1947 (hereinafter referred to as the Control Act ) empowers the Central Government to make provision for prohibiting, restricting or otherwise controlling in all cases or in specified class of cases, the import/export of goods of any specified description. It is pointed out that such Control Act came into force on 25th of March, 1947 and on the same day, the Foreign Exchange Regulation Act, 1947 was also enacted. The three Statutes i.e. Sea Customs Act, 1878, Import and Export (Control) Act, 1947 and the Foreign Exchange Regulation Act, 1947 have to be read in tandem. The relevant provisions of the three Statutes reads as under:- Sea Customs Act, 1878 19. The Governor General in Council may from time to time, by notification in the Gazette of India, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of British India or any specified part of British India. 178. Any thing liable to confiscation under this Act may be seized in any place, either upon land or water, by any officer of Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d subject to such exceptions, if any, as may be made by or under the order,- (a) the import, export, carriage coastwise or shipment as ships stores of goods of any specified description; (b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried. (2) All goods to which any order under sub-section (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under Section 19 of the Sea Customs Act, 1878 (8 of 1878), and all the provisions of that Act shall have effect accordingly, except that Section 183 thereof shall have effect as if for the word shall therein the word may were substituted. Notification No. 12(II)-F.1/48 published in the Gazette of India, Extraordinary, New Delhi on August 25, 1948. In exercise of the powers conferred by Sub-section (1) of Section 8 of Foreign Exchange Regulation Act, 1947 and in super session of the notification of the Government of India in the late Finance Department No. 12(11)-F.1/47, dated 27-3-1947, the Central Government is pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of smuggled goods justifying confiscation of goods. It is also argued that taking over of the goods was not from police custody in terms of the order of the Judicial Commissioner but in fact from the respondent, after conclusion of trial and on deposit of the fine etc. The goods were free from any encumbrance or control of police on that day. It is thus not seizure of the goods from the police but from the respondent as the Court has ordered delivery of goods to Smt. Nirmala Mitra. The Revenue has taken physical possession after the detention order was passed. Therefore, the finding recorded by the learned Tribunal that the goods have been seized from the police is not correct finding in law. In the year 1993 the Customs Authorities have seized the goods so as to proceed under the Act after having control of the seized goods from the Court after conclusion of the criminal case so as to initiate confiscation proceedings under the Act. Such seizure was to initiate proceedings under the Act and it cannot be said to be seizure of goods from the police. 21. The stand of the respondent is that Sri Mitra has purchased the gold from Reserve Bank of India. Learned counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marked gold bars and taken control of such goods after notice to the respondent on 4th of March, 1993. Therefore, the seizure of the goods is not from the police but after the goods were symbolically returned to Smt. Nirmala Mitra but kept in joint custody by virtue of an order passed by the Judicial Commissioner. Since there is no challenge to the order passed by the Judicial Commissioner, the physical possession of the foreign gold bars shifted from the police to Smt. Nirmala Mitra though there was restraint on physical delivery of goods to her. It is thereafter, the goods were actually seized by the Custom Authorities when a notice was served on the Bank and to Smt. Nirmala Mitra for seizure of such goods. Thus, the goods came into symbolic possession of Smt. Nirmala Mitra and the finding recorded by the Tribunal to the contrary is not tenable in law. 24. The judgment in Gian Chand s case (supra) deals with a situation where delivery of goods to the Custom Authorities under later part of Section 180 of the Act was not found to be seizure under the Act as the delivery of goods to the Custom Authorities by the Magistrate are not taken from the possession of the person accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for him or for his legal heirs to prove the purchase of gold from Reserve Bank of India any time. 28. Though Section 178-A puts the onus of proof with the person from whom recovery was effected but even prior thereto, the Custom Authorities could prove such facts to shift the burden on the respondent to show that the goods were not smuggled unauthorizedly or were purchased through the authorized sources. Since undisputedly the gold bars are of foreign marking, therefore, they have been proved to be imported. The stand of Sri Mitra and later of his wife is that they have purchased the gold bars through brokers from Reserve Bank of India but in the absence of any proof of purchase from Reserve Bank of India, the initial burden which was on the Customs shifted to the respondent and the respondent having failed to prove the purchase, the Tribunal erred in law in holding that Sri Mitra or his wife discharged the onus only by the assertions that they have purchased it from the brokers. It may be noticed that neither any name of broker has come on record or the date of purchase or any other evidence of purchase that is invoices etc. Therefore, mere stand of the respondent in reply is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ett felicitously puts it -- all exactness is a fake . El Dorado of absolute proof being unattainable, the law accepts for it probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus, legal proof is not necessarily perfect proof; often it is nothing more than a prudent man s estimate as to the probabilities of the case. 31. The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered -- to use the words of Lord Mansfield in Blatch v. Archer (1774) 1 Cowp 63, 65 -- according to the proof which it was in the power of one side to prove, and in the power of the other to have contradicted . Since it is exceedingly difficult, if not absolutely impossible, for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden. 32. Smuggling is clandest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is enough if the Department furnishes prima facie proof of the goods being smuggled stocks. In the case of the latter penalty, the Department has to prove further that the person proceeded against was concerned in the smuggling. (Emphasis supplied) 34. The propriety and legality of the Collector s impugned order had to be judged in the light of the above principles. 35. It is not correct to say that this is a case of no evidence. While it is true that no direct evidence of the illicit importation of the goods was adduced by the Department, it had made available to the Collector several circumstances of a determinative character which coupled with the inference arising from the dubious conduct of Baboothmull and Bhoormull, could reasonably lead to the conclusion drawn by the Collector, that they were smuggled goods. These circumstances have been set out by us earlier in this judgment. We may recapitulate only the most salient among them. 31. The proceedings of confiscation of goods are proceedings in rem. The department is to prove of the goods being smuggled goods alone. The confiscation proceedings are not the penal proceedings as penal proceedings are contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of innocence in favour of that person, and in the result, prove him guilty. 29. In State of W.B. v. Mir Mohd. Omar (2000) 8 SCC 382 it was held that the legislature engrafted special rule in Section 106 of the Evidence Act to meet certain exceptional cases in which not only it would be impossible but disproportionately difficult for the prosecution to establish such facts which are specially and exceptionally within the exclusive knowledge of the accused and which he could prove without difficulty or inconvenience. This principle was reiterated in Sanjay v. State (NCT of Delhi) (2001) 3 SCC 190 and Ezhil v. State of T.N. (2002) 9 SCC 189. 30. In R. v. Oliver (1943) 2 All ER 800 the accused was charged with having sold sugar as a wholesale seller without the necessary licence. It was held that whether the accused had a licence was a fact peculiarly within his own knowledge and proof of the fact that he had a licence lay upon him. It was further held that in the circumstances of the case the prosecution was under no necessity to give prima facie evidence of non- existence of a licence. In this case reference is made to some earlier decisions and it will be useful to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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