Decided on August 07,1986



S.Kalyanam, - (1.)THIS appeal is directed against the order of Collector of Customs (Appeal), Madras dated 7-2-1986 confirming the order of absolute confiscation of the Assistant Collector of Customs, Madras dated 30-1-1985 in respect of the goods such as shoes, maxies, children- frocks, folding scissors, TDK cassette tapes, Parasols etc. 'detailed in the original order and valued at Rs. 6,223/- and modifying and reducing the penalty imposed on the appellant by the original authority from Rs. 1,000/- to Rs. 500/- under the provisions of the Customs Act, 1962 (hereinafter referred to as the Act). On 27-1-1985 at about 9.30 P.M. the police officials of Royapuram police station, Madras intercepted an autorickshaw bearing Registration No. TMR 2454 at the junction at Kalnandapam Road and Arathar Road and the appellant occupant therein. The police found in the possession of appellant two bags and one brown colour rexine suit case and on opening the same on suspicion found them to contain the following articles :

The goods were seized by the police under mahazar and later on handed over to the Customs authorities on 28-1-1985. The Customs authorities recorded a statement from the appellant on 28-1-1985 wherein the appellant stated that the goods were of foreign origin and purchased from some unknown brokers for resale on profits and was taken at the time of seizure to Burma bazaar for disposal. It is in these circumstances proceedings instituted against the appellant ultimately resulted in the present impugned order now appealed against.

(2.)Shri Sahasranamam, the learned counsel for the appellant at the outset submitted that in respect of the technical contravention of the charge of selling the goods cleared under baggage he does not want to contest the appeal on merit. He merely drew my attention to the fact that eventhough the order of adjudication was passed by the Assistant Collector as early as on 30-1-1985 it was despatched only on 26-7-1985. The learned counsel prayed for release of the goods under absolute confiscation on payment of a suitable fine since the goods such as T.Shirts, children frocks etc. cannot be said to be in trade quantities.
Heard Shri Krishnan, D.R. Since the contravention of the charge is admitted by the appellant I do not feel called upon to go into the merits of the issue. Nevertheless I find a legal infirmity in the order of the Assistant Collector of Customs dated 30-1-1985 which has also escaped the attention of the lower .appellate authority. Admittedly the goods under seizure were originally seized by the police officials and later on handed over to the customs authorities and in such a situation the goods cannot be said to have been seized from the possession of the appellant within the meaning of Section 123 of the Act. The adjudicating authority is therefore in error to have invoked the statutory presumption in terms of Section 123 of the Act against the appellant by observing "further under Section 123 of Customs Act, 1962, the onus of proving that the goods viz. textiles fabrics are not smuggled is cast on the party from whose possession they were seized and also on the person who claims the ownership thereof." This approach of the adjudicating authority is erroneous and runs counter to ratio decidendi of the rulings of the Supreme Court and other High Courts with reference to the scope and ambit of Section 123 of the Act. Though not cited by the learned counsel for the appellant I would like to make reference to the ruling of the Supreme Court in the case of 'Gian Chand and Ors. v. Punjab' reported in 1962 SC 496 wherein Their Lordships of the Supreme Court interpreted Section 178A of the Sea Customs Act, 1878 which is in pare materia with Section 123 of the Customs Act, 1962 holding that the burden of proving that the goods are not smuggled is on "the person from whose possession the goods are taken". The Division Bench of the Gujarat High Court in the case of Asst. Collector of Customs, Baroda and Another v. Mukbujusein Ibrahim Pirjada reported in 1970 Criminal Law Journal p. 1305, held that when the seizure is effected by the police authorities the presumption under Section 123 of the Act cannot be invoked. The case dealt with by the Supreme Court as well as Gujarat High Court referred to supra relates to the seizure of the goods by the police officers at the initial stage. The Division Bench of the Madras High Court has also taken a similar view in the case of "Bhoormal Premchand v. Collector of Customs, Madras' in the ruling reported in AIR 1967 Madras p.39 clearly holding that" a seizure under the authority law does involve a deprivation of possession and not merely of custody and so when the police officer seizes the goods, the accused loses possession which vests in the police. When that possession is transferred, by virtue of the provisions contained in Section 180 to the Customs authorities, there is no fresh seizure under the Sea Customs Act."

(3.)THEREFORE de-horse the applicability of Section 123 of the Act on the basis of the admission of the contravention of the charge by the appellant before me I confirm the finding in the impugned order. In the facts and circumstances of this case, keeping the nature of the articles and their value in mind I feel interests of justice would be met if the appellant is permitted to exercise the option of redemption in respect of the same and accordingly I/modify the absolute order of confiscation under the impugned order and permit the appellant to redeem the goods on payment of a fine of Rs. 2,500/-. So far as penalty is concerned I confirm the same. Except for the above modification, the appeal is otherwise dismissed.

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