M S P RAJES Vs. COLLECTOR OF CUSTOMS
LAWS(CE)-1986-8-1
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on August 14,1986

Appellant
VERSUS
Respondents

JUDGEMENT

S. Kalyanam, Member (J) - (1.)THIS appeal is directed against the order of the Additional Collector of Customs, Madras dated 21-3-1986 absolutely confiscating three gold bars weighing 300.286 gms. with foreign markings, Indian currency of Rs. 12,600/-, State Bank of India Rupees Travellers' Cheques valued at Rs. 24,000/- under Section 121 and foreign currency U.S. $ 420 and Singapore $ 585 under Section 111(d) (i) and (m) besides a penalty of Rs. 60,000/- under Section 112 of the Customs Act, 1962 (hereinafter referred to as the 'Act').
(2.)On the basis of information officers of the Custom House, Madras searched room No. 406, Hotel Taj Coromandel, Nungambakkam, Madras on 2-4-1985 and found the appellant herein in occupation of the same. The authorities recovered two gold bars with foreign markings from underneath the bed in the room and one gold biscuit with foreign marking from the suitcase of the appellant. The officers also found Indian currency for Rs. 12,600/-, U.S. $ 420, Singapore $ 585 and S.B.I. Travellers' cheques for the value of Rs. 24,000/- in the possession of the appellant. Since the gold was of foreign origin and the appellant had no valid permit or licence to possess the same and since the Indian currency (Rs. 12,600/~) and Rupees travellers' cheques (Rs. 24,000/-) were reasonably believed by the authorities to represent the sale proceeds of smuggled goods and since the foreign currency namely U.S. $ 420 and Singapore $ 585 were reasonably believed to have been smuggled into India, the authorities effected the seizure of the same under mahazar attested by witnesses. The appellant gave a statement before the authorities on 3-4-1985 to the effect that he was one of the coffee exporters and had widely travelled all over the world in connection with coffee business and that he returned from Singapore on 6-2-1985 by air and was staying in room No. 406 at Taj Coromandel Hotel, Madras. The appellant disclaimed the gold under seizure and pleaded that he was not aware of the presence of gold in his suitcase or under bed. The appellant explained that the U.S. and Singapore dollars in his possession represented the unexpended amount released in his favour by way of foreign exchange for his tour to Australia and New Zealand. After further investigation the authorities instituted proceedings against the appellant as per law which ultimately culminated in the present impugned order now appealed against.
Mrs. Ramani Natarajan, the learned counsel for the appellant submitted that the very seizure of the goods is not legally valid and the adjudicating authority is in error to have invoked the statutory presumption in terms of Section 123 of the Act against the appellant under the impugned order. In expatiating on this submission the learned counsel contended that in terms of Section 123 of the Act the authorities would have jurisdiction to effect seizure of the goods only on a reasonable belief that they are smuggled goods and the appellant's room was searched in pursuance of the search warrant wherein no mention at all was made that gold was secreted in the room of the appellant. Inasmuch as the search was in pursuance of a warrant which merely stated that goods liable to confiscation were secreted in the room without specific mention of the article, the very search and seizure was not preceded by formation of a reasonable belief within the meaning of Section 123 of the Act. It was further contended that two pieces of gold were recovered from underneath the bed and the room being accessible to a number of persons in a five-star hotel, such as hotel staff etc. the appellant could not be imputed with knowledge much less with conscious possession of the same. Regarding the gold recovered from the appellant's suitcase it was contended that the suitcase was open and any person inimically disposed to the appellant might have planted the gold in the appellant's suitcase and in a similar way the other pieces of gold recovered from underneath the bed. The learned counsel also in passing mentioned that there is no evidence on record to show that the recovery of the two gold pieces from underneath the bed was from the bed which the appellant was using. It was further urged that what has been recovered by the authorities is not proved to be gold and since the alleged gold pieces were not sent for chemical examination or to the Mint authorities for test as to the nature of the metal, the charge against the appellant would fail. The learned counsel also relied upon the ratio of the ruling reported in 1972 Cr. Law Journal Kerala p. 113.5 in the case of 'Assistant Collector of Customs v. Pratap Rao Salt and Another' and the ruling of the Madras High Court in the case of 'Misrimal Hansraj v. Union of India' reported in 1975 Cr. Law Journal 1617. We shall advert to the rulings later. The learned counsel also assailed the impugned order confiscating the Indian currency and foreign currency contending that there is no ray of evidence to prove and establish that the Indian currency and travellers' cheques represented the sale proceeds of smuggled goods and likewise, there was no evidence that the foreign currency namely U.S. and Singapore dollars were smuggled into the country by the appellant.

(3.)THE learned S.D.R. submitted that the seizure had been effected on a reasonable belief and the gold pieces under seizure being of foreign origin are notified goods under Section 123 of the Act and, therefore, it is for the appellant to prove and establish that they are not smuggled goods. It was further urged that even if the room is accessible to the hotel staff, recovery of gold pieces from underneath the bed and one gold piece from the suitcase of the appellant kept in a cover and wrapped in used clothes of the appellant would clearly establish appellant's exclusive possession of the same. THE learned SDR further contended that when the appellant had been proceeded against on a charge that he was in possession of foreign marked gold the appellant did not challenge at all the fact of recovery of foreign marked gold and asked for any chemical examination of the gold by the Mint authorities. THE customs authorities, the learned S.D.R. contended, by sheer experience are competent to certify that the pieces with foreign markings recovered are gold pieces and are of foreign origin.


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