PANDURANGA BOMMIAH VERNEKAR AND Vs. COLLECTOR OF CENTRAL EXCISE BANGALORE

JUDGEMENT

(1.) This is a petition under Article 226 of the Indian Constitution. The petitioners who were the Shroffs in Davangere, assail the validity of the order of confiscation, under Section 167 (8) of the Sea Customs Act read with Section 23-A of the Foreign Exchange Regulation Act, 1947, made by the Collector of Central Excise, Bangalore, in his D B. Dis. No. VIII/10/4/59-Cus. O. R. No. 7/59, dated 25-12-1959. It was firstly contended that the order of the Collector is vitiated, because the Collector did not bear in mind the fact that the burden of establishing the case was on the Department. The second ground of attack was that the Collector contravened the principle of 'natural justice in making the impugned order. We shall presently consider these grounds in detail. But before doing so it is necessary to set out the material facts.

(2.) The 2nd petitioner is the son of the 1st petitioner; the petitioners are dealers in bullion at Davangere; on 24-1-59, the Superintendent of Central Excise (Head Quarters Preventive) Bangalore, after obtaining a search warrant from the Special First Class Magistrate Davangere searched both the shop premises as well as the residence of the petitioners at the shop premises no incriminating article was found but when the house of the petitioners was searched eight pieces of gold weighing in all 186 Tolas were found concealed in a partly wet hand bag placed on a plank in the bath-room situated by the side of the kitchen of the house. Before conducting the search in question, the Superintendent Central Excise had questioned the petitioners as to whether they had any contraband gold they had informed him that they had no contraband gold with them. After seizing the gold in question the petitioners accounts were scrutinized in those accounts no mention of the 186 Tolas of gold above mentioned had been made in fact the accounts were silent about the gold in question. When the first petitioner who is the karta of the family was questioned about the same by the Superintendent of Central Excise, he had stated before him that he had purchased the gold in question from one Govind and another Ganapathy of Karwar. He had stated that he was not in a position to give either the names of the parents of those persons or any information as regards their residence; all that he knew according to him was that they belonged to Karwar he further stated before the Superintendent of Central Excise that he had not entered the transactions in question in his accounts as he had made those transactions from borrowed monies the account books were also silent about the alleged loans. The statement of the first petitioner was reduced into writing by the Superintendent of Central Excise and the same was made a part of the records.

(3.) On the receipt of the report of the Superintendent Central Excise the Collector called upon the first petitioner to submit his explanation. The petitioners gave a written explanation. Thereafter, the case was posted for hearing and the first petitioner was asked to appear before the Collector of Central Excise either in person or through a counsel. On the date of hearing, i.e., 27-4-1959, the second petitioner as well as his counsel Sri Ganji Veerappa appeared before the Collector, Central Excise. Sri Ganji Veerappa argued on behalf of the 1st petitioner. The contention taken on behalf of the first petitioner was that he was a bona fide purchaser from the aforementioned Govind and Ganapathy, and therefore he was not guilty of any offence. The explanation offered on behalf of the first petitioner was rejected and gold seized was ordered to be confiscated as mentioned above.