Decided on September 10,1970

In Re: K. Hastimal Appellant
STATE Respondents


Somasundaram, J. - (1.) THIRU Hastimal, the Appellant herein stands convicted and sentenced by the Chief Presidency Magistrate, Egmore, Madras, to pay a fine of Rs. 2,000, for an offence under Section 135(b)(ii) of the Customs Act, 1962.
(2.) THE prosecution case is briefly as below: P.W. 1, Chakrapani, Preventive Officer, attached to the Customs House at Madras, had information that this Appellant had stored foreign goods, smuggled into India, in door No. 49/1 Dams Road, Chintadripet, Madras. On 17th August 1964 he met Mr. Manilal, the occupant of this premises, and the latter told him that the Appellant had kept some articles in the rear verandah of the ground floor. He took P.W. 1 to the Appellant's house in No. 70 Kesava Iyer St, and pointed him out. P.W. 1 returned to Dams Road and searched door No. 49/1. 30 tins, each tin containing 11b of Thymol, made in Germany, 500 packets of French Pack Brand Hops, 1 lb each product of U.S.A. packed in 5 gunny bags, 133 packets each containing 6 dozens of Eclipss Hacknaw blades, made in England and 38 packets each containing 1 dcz, of Glacier Clinical thermometers, made in Japan, were seized from this premises under Mahazar Ex. P -2, The Appellant then took them to door No. 20 Raja Street, Robertsonpet, Mandaveli -pakkam, Madras and from this house, 100 packets of Hops, 84 boxes containing refills, 46 pieces of Ecobra drafting instruments, made in Germany and 208 boxes containing knives of warranted stainless steel table cutlery, made in England, were seized under Mahezar Ex. P -4. From the house of the Appellant, 78 packets of Hops were seized under mahazar Ex. P -11. The Appellant was then taken to the Customs house with all these articles and there he made the statement Ex. P -12, admitting therein that the items seized were smuggled ones. Show cause notice, Ex. P -6, was issued and at this stage the appellant stated that he had purchased these articles from some company at Bombay. The Collector confiscated the articles and imposed a penalty of Rs. 1000. In addition prosecution of the Appellant on an offence under Section 135(3)(2) of the Customs Act was also sanctioned. The Appellant was put up further before the learned Chief Presidency Magistrate, Madras. P.Ws. 1 to 3 and 5, Preventive Officers deposed to the above facts. When questioned in court, the Appellant stated that he had purchased these articles under proper bills form Middle East Tradition Corporation, a firm of Importers and Exporters at Bombay. Disbelieving his case, the learned magistrate convicted the Appellant and sentenced him to pay a fine of Rs. 2000. The correctness of this conviction is new canvassed in this appeal. The prosecution has well established that the articles seized are of foreign origin. In fact, this is not disputed. Further, the fact that these articles were in the possession of the Appellant also does not admit of any doubt. The Appellant himself admits it. On behalf of the Appellant it is contended that these articles were purchased by him from a company at Bombay and that the prosecution has not shown that they are smuggled items and that in any event he had purchased them with knowledge that they are such. The charge against the Appellant is under Section 135(b) of the Customs Act, 1962 and under this section "if any person acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111, shall be punished with imprisonment for a term which may extend to two years or with fine or with both." Section 111 of the Act deals with the confiscation of improperly imported goods, without paying the duty thereon. The goods seized in this case are certainly goods for which duty is payable but there is no proof that duty was not paid. Section 123 of she Act easts the burden of proof in respect of cases where a person is found in possession of gold, diamonds, manufactures of gold or diamonds, watches and any other class of goods which the Central Government may by notification in the official Gazette specify, on the person with whom those goods are found. The goods seized in this case are not goods coming within the purview of this stetion. Therefore, the burden is on the prosecution to show (1) that these goods are of foreign origin on which duty is payable; (2) they were imported into the country without payment of duty or in contravention of any restriction or prohibition imposed as regards the entry of these goods; (3) the person found in possession knew or had reason to believe that the goods were of that character. In Addl. Collector of Customs v. Sitaram Agar, walla : A.I.R. 1962 Cal. 242 one Agarwalla was convicted under Section 167(8) of the Sea Customs Act as having been concerned in the import of some gold. There Lordships of the Calcutta High Court observed that - A thing is imported when it reaches the borders of the country.... There is not the faintest suggestion in this case as to how, when or by whom the stuff was imported into this country. It is tree that for the purpose of proceeding against the gold itself, it is enough to show that it has been imported without a valid permit, and immediately that is established, the gold becomes liable to confiscation. But before a person can be proceeded against under Section 167(8) and a personal penalty imposed upon him for being concerned in the commission of the offense of such importation, it is essential to prove that he did take some part in the series of steps which culminated in the gold being brought into the country. It may well be that a person, with -out coming into physical contact with the smuggled gold, may yet be held liable for having been concerned in its importation... In order that a person may be said to be concerned some facts have to be proved which will establish that he was in conscious relation with the gold in one or other of the several successive steps preceding its actual receipt into the country. If there is no even evidence, merely because the accused was going to be the first taker of the smuggled gold, he cannot be deemed to be a person concerned in illegal importation of the bars.
(3.) IN W.P. No. 786 of 1957 of this Court, Rajagopalan, J. has pointed out as follows: Certainly the authorities were entitled to reject as approved the plea of the Petitioner that these goods had bees acquired by the Petitioner through the normal trade channels in the open market. But that does net necessarily establish that either the goods had been illegally imported or even that the Petitioner knew at the time of the acquisition of these goods that they had been illegally imported into the country. It certainly was not the case of the Department that the articles mentioned in the list or any of them were not available in the market in India, though import of these articles was restricted... The real basis for action was (1) the suspicion that the Petitioner traded in smuggled goods, which was what led to the search; and (2) the Petitioner did not prove the purchase of these articles from the dealers named by him. Neither, in the circumstances of this case, constitutes, in our opinion material on which a conclusion could be rested that all these were smuggled goods, or even a conclusion that when the Petitioner acquired these goods he knew or had reason to believe that these were smuggled goods.;

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