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TMI Blog1965 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... 167(81) inasmuch as he was dealing with prohibited or restricted goods and had the necessary knowledge and intent as required under that section. We therefore allow the appeal, set aside the order of the High Court, restore that of the Presidency Magistrate and confirm the sentence passed on him by the Magistrate. - 192 of 1961, 183 of 1962 - - - Dated:- 5-10-1965 - K. Subba Rao, K.N. Wanchoo, J.C. Shah, S.M. Sikri and V. Ramaswami, JJ. [Judgment per : K. Subba Rao, J.]. - I regret my inability to agree on the construction of Section 167 (81) of the Sea Customs Act, 1878. The facts have been stated by my learned brother, Wanchoo, J., and I need not restate them. Clause (81) of Section 167 of the Sea Customs Act reads : "If any person knowingly, and with intent to defraud the Government of any duty payable thereon, or to evade any prohibition or restriction for the time being in force under or by virtue of this Act with respect thereto acquires possession of, or is in any way concerned in carrying, removing, depositing, harbouring, keeping or concealing or in any manner dealing with any goods which have been unlawfully removed from a warehouse or which are chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, namely, the duty of a court is to ascertain the expressed intention of the Legislature. I am led to make these general remarks, as an attempt was made by the learned Counsel for the appellant to persuade us to interpret the words of the clause in the light of the decisions of the English courts on an analogous provision in an Act intended to prevent smuggling. It is not possible to state that the English and the Indian Acts are in pari materia, though their general purposes are the same and though there is some resemblance in the terminology used in them. The English decisions, therefore, must be kept aside in construing the relevant provisions of the Indian statute. 2.Now coming to the relevant clause, the following material ingredients constitute an offence thereunder : (1) a person must have a knowledge that there is a prohibition or restriction against doing any of the enumerated acts with respect to goods imported or exported contrary to the restriction or prohibition imposed against their import or export; (2) he must have acted with an intention to evade such a restriction or prohibition; there is no offence unless the said two elements of mens rea namely, knowledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s may be done by persons between whom there was a pre-arranged plan before the goods were brought into India. Different persons may also take part in such dealings with the requistite knowledge or intention for the purpose of completing the import vis-a-vis the importer. Under the said clause, therefore, the process of import does not end immediately the prohibited goods are brought into India, but continues till the goods are delivered to the importer, physically or constructively. The importer who smuggles the goods is certainly guilty under the clause, because he imports them in derogation of the prohibition or restriction. Any person who deals with the goods in the context of the import as explained above in any one of the connected ways with the requisite knowledge and intention would equally be guilty of the offence. But the subsequent transactions in regard to the said goods are outside the process of the enlarged definition of the expression "import". It would be incongruous to hold that a purchaser from the importer or a purchaser from the said purchaser, and so on, has an intention to evade the prohibition or restriction, though he may have the intention to receive the sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute and have been found as below. 7.On August 25, 1958, a constable attached to the Detective Department, noticed Sitaram Agarwala respondent and another person at the crossing of Hariram Goenka street and Kalakar street. The constable had certain information with respect to these persons and decided to follow them. These two persons got into a bus and the constable also boarded the same bus. They got down at the junction of B.K. Pal Avenue and J.M. Avenue and so did the constable. They then went to Narendra Dev Square which is a kind of park. The constable kept watch over them from a distance. After a short time these two men came out of the park and stood on the western foot-path of J.M. Avenue. Shortly thereafter a small taxi came there from the South and stopped. Respondent Wang Chit Khaw (hereinafter referred to as the Chinese accused) was in that taxi. He came down and shook hands with Sitaram Agarwala and the three got into the taxi. When the taxi was about to start, the constable disclosed his identity to the driver and asked him to stop. He also asked the three persons to accompany him to the thana. Thereupon Sitaram Agarwala and the other man who was with him came ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with smuggled gold and thereby committed an offence under Section 167(81) of the Act. The charge against the Chinese accused was that he had in his possession 23 smuggled gold bars which he wanted to sell to Sitarm Agarwala and another person by previous arrangement and as such he was concerned in dealing with smuggled gold and was guilty under Section 167(81) of the Act. So far as Sitaram Agarwala was concerned, the High Court held that by merely going to the park in order to purchase smuggled gold by previous arrangement, it could not be said that Sitaram Agarwala was in any manner dealing with smuggled gold. The High Court was of the view that there was a mere attempt to purchase smuggled gold on the part of Sitaram Agarwala, but as the purchase was not completed it could not be said that Sitaram Agarwala was concerned in dealing with the smuggled gold. The High Court therefore ordered the acquittal of Sitaram Agarwala respondent. As to the Chinese accused, the High Court held that though he was found in possession of smuggled gold, which he knew to be such, and had attempted to sell that gold surreptitiously, Section 167 (81) required knowledge that the article in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrival and departure of vessels is controlled, (Ch. VII and Ch. VIII); provision is made for the discharge of cargo, (Ch. IX), and clearance of goods for home consumption (Ch. X); provision is also made for warehousing and transhipment., (Chapters XI, XII); provisions are also made for exportation or shipment and re-landing (Ch. XIII); special provisions have been made relating to spirit (Ch. XIV) and coasting trade (Ch. XV). Then comes Ch. XVI dealing with offences and penalties. Offences enumerated in Ch. XVI are of two kinds; first there are contraventions of the Act and rules thereunder which are dealt with by customs officers and the penalty for which is imposed by them. These may be compendiously called customs offences. Besides these there are criminal offences which are dealt with by Magistrates and which result in conviction and sentence of imprisonment and/or fine. These two kinds of offences have been created to ensure that no fraud is committed in the matter of payment of duty and also to ensure that there is no smuggling of goods, without payment of duty or in defiance of any prohibition or restriction imposed under Ch. IV of the Act. 12.It is necessary for our purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estrictions imposed under Chapter IV, the goods remain liable to confiscation whenever found even if this is long after the import is over and even if they are in possession of persons who had nothing to do with the actual import. It is also well-settled by the decisions of this Court that the second part of the penalty relating to any person applies only to a person concerned in the importation or exportation of the goods and does not apply to a person found in possession of the smuggled goods who had nothing to do with the importation or exportation thereof : (see Shivanarayna Mahato v. Collector of Central Excise and Land Customs) C.A. 288 of 1964, decided on August 14, 1965. 13.The main contention of the respondents which has found favour with the High Court was that Section 167(81) when it deals with persons and subjects them to imprisonment and fine on conviction by a Magistrate is also concerned with persons who are in some way or other actually concerned in the import and has no application to third persons who had nothing to do with the actual import but might have come in possession of smuggled goods even knowingly after they had been smuggled. Before however we conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... muggled gold. This was a case therefore where by means of previous arrangement with a person in possession of a smuggled article, the intending purchaser had gone to purchase it and the deal did not go through only because the police intervened. In such circumstances whereby previous agreement or arrangement a person goes to purchase an article which he knows to be smuggled it would in our opinion be a case where such a person must be held to be concerned in dealing with the prohibited goods. Where a person does any overt act in relation to prohibited goods which he knows to be such and the act is done in consequence of a previous arrangement or agreement it would in our opinion be a case where the person doing the act is concerned in dealing with the prohibited goods. In other words any transaction relating to prohibited goods which is done or attempted to be done after some kind of prior arrangement or agreement would in our opinion clearly amount to the person being concerned in dealing with the prohibited goods. Both the words "concerned" and "deal" have a wide connotation. The words "concerned in" mean "interested in, involved in, mixed up with" while the words "deal with" mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equires would run thus : "If any person knowingly, and with intent to defraud the Government of any duty payable thereon, or to evade any prohibition or restriction for the time being in force under or by virtue of the Act with respect thereto acquires possession of any goods with respect to which duty has not been paid or with respect to the importation of which any prohibition or restriction is for the time being in force." The argument which has found favour with the High Court is that the section requires knowledge on the part of the accused that the goods were imported against the prohibition or restriction in force. This is undoubtedly so. The section further requires that the person who has this knowledge should also have the intention either to defraud the Government of any duty payable thereon or to evade any prohibition or restriction for the time being in force under or by virtue of the Act. Mere knowledge that the goods are prohibited goods or goods on which duty has not been paid would not be enough; the section further requires that there should be an intent to defraud, the Government of the duty payable or to evade any prohibition or restriction. The argument on beha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the action, even though he may not have been concerned in the actual smuggling of the goods. So long as the prohibition lasts any person who comes into possession of prohibited goods; though he may not be concerned in the actual smuggling would still in our opinion have the intent to evade the prohibition when he remains in possession of the goods which are prohibited. The prohibition in our opinion does not come to an end as soon as the customs frontier is crossed. So long as prohibition is in force and the goods are prohibited goods any person in possession thereof, even though he may not be concerned with the actual smuggling would still be guilty of evading the prohibition by keeping the goods in his possession. If this were not so, it would mean that once the prohibition has been successfully evaded by the actual smuggler the goods would be free from the taint of prohibition and could be dealt with by any person as if there is no prohibition with respect to them. If that were to be the meaning of Section 167(81) there would be a serious lacuna in this provision which is meant to prevent smuggling. Smuggling does not only stop at importing the goods in the face of prohibition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the actual importation. It seems to us that they apply in the case of prohibited or restricted goods so long as the prohibition or restriction lasts and whoever is in possession of such goods or comes into possession thereof, even after the smuggling is over must be attributed with the intention of evading the prohibition or restriction provided he knows that the goods were smuggled into the country in spite of the prohibition or restriction. Similarly where the goods are dutiable and the duty has not been paid on them any person acquires them with the knowledge that the duty thereon has not been paid would have the intention to defraud the Government of duty, even though he may not be the person actually concerned in the smuggling. We therefore hold that Section 167(81) has a wider sweep than Section 167(8) and it does not only apply to a person who may have been actually concerned in some way or other with smuggling but also inter alia to persons who may have come into possession of goods even after the smuggling was over. So long as the prohibition or restriction remains in force or the duty has not been paid even a third person coming into possession of such goods would hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of knowingly carrying or in any manner dealing with uncustomed goods with intent to defraud His Majesty of the duty due thereon contrary to Section 186 is not only committed at the port of entry or the place where the goods are actually landed; it is committed anywhere in the realm by a person acting in the manner described by the sub-section". Lord Goddard, C.J. made the following observations at page 252 :- "If a person is knowingly carrying uncustomed goods, he is assisting in the smuggling of the goods; for while goods are no doubt smuggled when they are brought into the country it is no good bringing smuggled goods into the country unless something can be done with them. Such a person is intending to defraud His Majesty of the customs as much as anybody else. The intent is there : It is all part of one operation .... . Otherwise, a most extraordinary lacuna is left in the Act, for it can then be said that, once a man has got away from the port of entry or from the place where the "goods were actually landed, no one dealing with the smuggled goods and carrying them inland will ever be guilty of an offence. I do not think that that has ever been held, and I am certainly n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le under the English Act of 1876 was followed. 24.These cases clearly indicate that the offence under the corresponding provision of the English Act can be committed long after the actual smuggling is over and even if the person found in possession of goods on which duty had not been paid had nothing to do with smuggling. These cases thus clearly support the interpretation we have put on the relevant words of Section 167(81). 25. Further the case of Schneider - L.R. (1960) II Q.B. 106 shows that it has always been held in England that if dutiable goods have been brought into the country without paying the duty, the duty attaches to goods brought into the country and though it may not have been paid at the moment of bringing the goods for some special reasons (as, for example, where it is meant for a foreign ambassador) the duty is leviable later on when the goods pass into the hands of persons other than the privileged person. The same in our view applies equally to goods which are smuggled into the country and the duty has been evaded. The duty always remains payable on goods which have been brought in without payment of duty and whoever deals with them even at a later stage a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary knowledge and intent as required under that section. We therefore allow the appeal, set aside the order of the High Court, restore that of the Presidency Magistrate and confirm the sentence passed on him by the Magistrate. In Criminal Appeal No. 123 of 1962 29.[Judgment per : Wanchoo, J.]. - This is an appeal by special leave against the judgment of the Calcutta High Court by which the respondent Amin Khan was acquitted of an offence under Section 167(81) of the Sea Customs Act, No. 8 of 1978. 30.The charge against the respondent was that he on or about July 15, 1959, at Circular Garden Reach Road, knowingly and with intent to evade the prohibition in force under Section 19 of the Sea Customs Act read with Section 23A of the Foreign Exchange Regulation Act, 1947, acquired possession of sixty bars of gold with respect to importation of which the said prohibition was in force on the date aforesaid. The learned Magistrate before whom the trial took place found that Amin Khan came in a taxi which stood opposite Gate No. 5 of Kidderpore dock. At that time a ship from the Far East, namely, S.S. Sangola was berthed at Kidderpore dock and there was some information with the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about July 15, 1959 at Circular Garden Reach Road, Amin Khan acquired possession of these gold bars knowingly and with intent to evade the prohibition in force at the time. The specific charge thus against Amin Khan was that he acquired possession of these gold bars on July 15, 1959 outside gate No. 5 of the Kidderpore dock. The suggestion of the prosecution was that the gold bars had been smuggled out of S.S. Sangola on that morning and handed over to Amin Khan who thus acquired possession of them that morning knowingly and with intent to avoid the prohibition or restriction in force. The High Court has found that there was no evidence to show that anybody actually came out of the dock area and handed over the gold bars either to Amin Khan or put them in the taxi to the knowledge of Amin Khan. Samsul Huq who was watching at the time was unable to say if any one had put the attache case containing the gold bars in the taxi, for, according to him, there was a crowd at that place and time and he could not keep the taxi in full view all the time. The High Court therefore took the view that it could not be ruled out that Amin Khan might have been in possession of the gold bars from be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal Nos. 41 and 42 of 1964 33. [Judgment per : Wanchoo, J.]. - These two appeals by special leave from the judgment of the High Court of Bombay raise a common question of law and will be dealt with together. The question which arises in these cases relates to the interpretation of Section 167(81) of the Sea Customs Act (No. 8 of 1878). We do not think it necessary to refer to the facts of these cases because the High Court did not hear the respondents on other grounds of appeal except one relating to the intent necessary under Section 167(81). The High Court took the view following the decision of the Calcutta High Court in the case of Sita Ram Agarwala v. The State - A.I.R. 1962 Cal. 370 (which has been dealt with by us in Shri Sachidananda Benerji, Assistant Collector of Customs v. Sita Ram Agarwala - Cr. A. 192 of 1961, in which judgment is being delivered today) that the intent necessary for conviction under Section 167(81) could only apply to a person who was in any manner concerned in the actual smuggling or importation of the goods and could not apply to persons who dealt with smuggled goods after the smuggling was over. Following this view the High Court held that the ..... 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