Sinha, C.J. - (1.) The facts in this case are shortly as follows: The respondent No. 1 Shamlal Sen Private Ltd. is a company registered under the Indian Companies Act, having its registered office situate at No. 3, Meerbahar Ghat Street (formerly 7 Nalini Sett Road), Calcutta and a workshop-cum-residence at No. 164, Cotton Street, Calcutta. The respondents Nos. 2, 3, 4 and 5 Sitanath Sen, Janakinath Sen, Shankarlal Sen and Tarak Nath Sen are the directors of the said company. The said company carried on business in gold and silver and is a manufacturer of gold loaves. Originally it was a partnership concern, commencing its business more than 100 years ago, but later on it was converted into a private limited company. On 29th December, 1954 both 7. Nalini Sett Road and 164, Cotton Street were raided by the customs authorities and a quantity of gold leaves, gold bullion and gold coins were seized together with books of account. On the 24th January 1955 a show-cause notice was issued by Mr. Srivastava the Assistant Collector of Customs etc. upon Mr. Janakinath Sen and the subject-matter of the said notice was stated to be as follows: "'Sub :--One pkt contg. gold leaves (details shown in Appendix 'A') seizure of, by Customs--Deptt. at the above mentioned address on 29th December 1954 on suspicion of having been legally (sic) imported into India--Notice to show cause." It was stated in the said notice that the above-mentioned articles were seized at 164, Cotton Street by Customs Preventive Officers, as there were reasonable grounds to believe that they had been illegally imported into India in violation of the provisions of the Foreign Exchange Regulation Act and the Sea Customs Act. Mr. Janaki Nath Sen was required to prove by suitable documentary evidence that the said gold leaves were imported or in the alternative how he came into possession of the said gold bullion and to show cause why the gold should not be confiscated and penal action should mil be taken against him under Section 167(8) of the Sea Customs Act. It may be mentioned here that these gold leaves have since been released and in reality we are not concerned with the same in this appeal. On the 19th April, 1955 a second show-cause notice was issued by the said Mr. Srivastava, addressed to M/s. Shamlal Sen Ltd., 7, Nalini Sett Road, Calcutta relating to the following subject-matter :-- "Sub:--Gold bars and gold coins (bullion) bearing inscriptions and Marks indicative ot foreign Origin (Nt. 627 T. 13 As. 6 P.) Value Rs. 57545/7 duty Rs. 8230/7 seizure of by the Customs Dept. at the shop at the above-mentioned address on 29th December, 1954--Notice to show-cause."
(2.) These were seized from 7, Nalini Sett Road. The gold coins excepting 10 pieces are not official coins, but are in the nature of gold bullion made up in the form of gold coins stamped with certain inscriptions. The particulars of such inscriptions are as follows : JUDGEMENT_239_AIR(CAL)_1967Html1.htm All the above coins, excepting item (c), have since been released and we arc not concerned with them in this appeal. In the second show- cause notice it was stated that the gold bullion mentioned therein was seized by Customs Preventive Officers, as there were reasonable grounds to believe that they had been illegally imported into India without payment of proper customs duties and without production of a permit of the Reserve Bank of India. The notice called upon the parties to show cause how the gold in question, which was of foreign origin, came into their possession and to show cause why the goods should not be confiscated and penal action taken tinder Section 167(8) and (39) of the Sea Customs Act. To this show-cause notice, the company replied and denied that there was any gold of foreign origin or that they were imported from outside India. They submitted that no offence had been committed.
(3.) On the 1st of July, 1955 a third show-cause notice was issued upon the parties, the relevant pari whereof was as follows : - "Subject : Smuggling of gold--contravention of the provisions of the F. B. R. A. and the S. C. A., Messrs. Shyam Lal Sen Ltd. of 7, Nalini Sett Road, Calcutta and Shri Sita Nath Sen, Shri Sankar Lal Sen, Janaki Nath Sen and Shri Taraknath Sen." On receipt of reliable information that Messrs. Shyam Lal Sen Ltd. of 7, Nalini Sett Road, Calcutta were regularly receiving smuggled gold at their premises No. 164, Cotton Street. (Hukka Putty) in accordance with well-planned --arrangements, watch was kept by the Customs Officers of their premises. On 28th December 1954 one person, later known to be W. B. Zadkar, wearing a long coat accompanied by another person at about 9 A. M. entered No. 164, Cotton Street, and after few minutes went away. On 29th December 1954 the same person appeared again at about 9-30 A. M. and as he was going towards No. 164, Cotton Street, (Hukka putty) he was apprehended by the Customs Officers. Sri. W. B. Zadkar, admitted that he was carrying gold for the purpose of delivering the same in the aforesaid premises at No. 164, Cotton Street. He also admitted that prior to his visits on 28th December 1954 and 29th December 1954 he had visited the same premises on at least half a dozen times and delivered the gold and that after each delivery he used to be paid by the persons who took delivery of the Gold a sum of Rs. 125 per trip for his services. Shri Zadkar also stated that his commission had been fixed by previous arrangement. He owned that he knew that the gold that he delivered was smuggled gold and that whatever gold had been previously received by him from Dum Dum Airport having been brought by foreign aircrafts. He explained the arrangements for the smuggling of gold for Messrs. Shyam Lal Sen Ltd., and its Directors and for another Burra Bazar party and how they had been made. ..... The importation of gold without entry being duly made and proper customs duty being paid is an offence in contravention of Section 36, Sea Customs Act and is punishable under Section 167(37) ibid. The importation of gold without general or special permit of the Reserve Bank of India contravenes the provisions of Section 8(1) of Foreign Exchange Regulation Act 1947 read with the Government of India, Ministry of Finance Notification No. 12 (11) F. 1/48 dated 25th August 1948 as amended by Notification No. 12 (11) F. 1/57 dated 27th February 1951 and the offence is punishable under Section 167 clause 8 of the Sea Customs Act read with Section 23-A of the Foreign Exchange Regulation Act. 1947".;