N Criminal Appeal Nos
416 18 of 1974
Appeals by Special leave from the Judgment and order dated the 23rd24th August 1973 of the Bombay High Court in Crl
Appeal Nos
68298  510 of 1972
502 NC Talukdar C V Subba Rao and RN Poddar for the Appellant
OP Rana and MN Shroff for the State of Maharashtra
SR Srivastava for Respondent No 1 in Crl
A 416
The Judgment of the Court was delivered by BHAGWATI J
These appeals by special leave are directed against a common judgment dated 27th August 1973 passed by a single e Judge of the High Court of Bombay in so far as it acquitted the first respondent in Criminal Appeal No 146 of 1978 respondent No 1 and 2 in Criminal Appeal No 147 of 1974 and the first respondent in Criminal Appeal No 418 of 1974 hereinafter referred to as the accused of the offence under Section 135 1aii of the Customs Act 1965
The entire controversy between the parties in these appeals turns on the true interpretations of section 135 1 a ii and it is therefore not necessary to set out the facts in detail but in order to appreciate how the question arises for consideration we may briefly reproduce a few relevant facts
On 9th June 1968 at about 2 pm Shri Mugve the Assistant Collector of Customs who was then Principal Appraisar in the Directorate of Revenue Intelligence Bombay received information that a fishing vessel was going to load silver at Ghas Bunder after 9 pm On that day and it was going to take the silver to a spot near Khanderi island in order to put it on an Arab Dhow for despatching it to Dubai
On receipt of this information Shri Mugve kept a watch in a privately owned motor launch in the stream near Ballard Pier about four miles away from the shore
At about 11 pm Shri Mugve and the other customs officers accompanying him noted that a heavily loaded fishing vessel was proceeding towards the Khanderi island without navigational lights
They immediately chased the fishing vessel and asked the crew to stop it but instead of stopping the crew increased the speed and tried to run away
The fishing vessel was chased and eventually it was intercepted by Shri Mugve and the other customs officers
On being questioned the Tindel of the fishing vessel made a statement that 194 ingots of silver of the value of Rs 92 lakhs were being taken towards Khanderi island for being loaded on an Arab Dhow which was going to Dubai
The fishing vessel was thereupon towed to Ballard Pier and 194 ingots of silver found in it were seized under a Panchnama in the reasonable belief 503 that they were being smuggled out of India
The accused who were in the fishing vessel were also prosecuted in the Court of Additional Chief Presidency Magistrate 5th Court Dadar for offences under Section 120 of the Indian Penal Code Section 135 1 a ii of the  Section 5 of the Imports and Exports Control Act 1947 and Section 23 1 A of the Foreign Exchange Regulation Act 1973
The Additional Chief Presidency Magistrate found the accused guilty of all the offences charged against them and sentenced them to various terms of imprisonment including fine
The accused there upon preferred three appeals in the High Court of Bombay against the order of conviction and sentence passed against them by the Additional Chief Presidency Magistrate
These appeals were heard by a single Judge of the High Court and by a common Judgment dated 27th August 1973 the learned single Judge confirmed the conviction of the accused under Section 120 of the Indian Penal Code and Section 5 of the Imports and Exports Control Act 1947 but set aside the conviction under Section 135 1 a ii of the and Section 23 1 A of the Foreign Exchange Regulation Act 1973
The Assistant Collector of Customs accepted the judgment of the learned single Judge in so far as it acquitted the accused of the offence under Section 23 1 A of the Foreign Exchange Regulation Act 1973 but he was aggrieved by that part of the judgment which set aside the conviction under Section 135 1 a ii of the and he accordingly preferred the present three appeals with special leave obtained from this Court
Before we set out the rival arguments addressed before us it would be convenient to reproduce Section 135 1 a ii of the 
That section reads as follows 135
Evasion of duty or prohibitions 1 Without prejudice to any action that may be taken under this Act if any person a is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods he shall be punishable 504 ii in any other case with imprisonment for a term which may extend to three years or with fine or with both
The argument of the prosecution was that on the facts proved in the case the accused were knowingly concerned in fraudulent evasion or attempt at evasion of the prohibition on the export of silver without a licence imposed under the Export Trade Control order 1968 issued by the Central Government under section 3 of the Imports and Exports Control Act 1947 and they were therefore guilty of the offence falling under section 135 1 a ii which makes it penal if any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under any other law for the time being in force with respect to such goods
 This argument was sought to be met on behalf of the accused by contending that the words with respect to such goods occurring at the end of Section 135 1 a ii referred to goods on which duty was chargeable as contemplated in the first part of that section and since no duty was chargeable on export of silver it did not fall within the words with respect to such goods and hence fraudulent evasion or attempt at evasion of the prohibition on export of silver without a licence imposed under the Export Trade Control order 1968 issued under section 3 of the Imports and Exports Control Act 1947 was not punishable under section 135 1 a ii
It was this contention urged on behalf of the accused which appealed to the learned single judge of the High Court of Bombay and resulted in the acquittal of the accused
The sole question which therefore arises for consideration on these rival arguments is as to what is the true meaning of the expression with respect to such goods 
Is it limited only to goods falling within the first part of section 135 1 a ii that is goods on which duty is chargeable or does it refer to any goods in respect of which prohibition is imposed under the or any other law for the time being in force
The answer to this question does not in our opinion admit of any doubt because the language of section 135 1 a ii is clear and explicit and one has merely to read the words of the section according to their plain grammatical construction to come to the conclusion that the view taken by the M learned single Judge of the High Court is plainly erroneous
We proceed to give our reasons for saying so but we may point out straightway that this view taken by the learned single judge of 505 the High Court has been subsequently overruled by a Division Bench of the same High Court in the State of Maharashtra vs Kassam1
If we analyse and break up the provision enacted in section 1351 a ii it will be clear that structurally it is divisible into three parts namely 1
If any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon he shall be punishable with imprisonment for a term which may extend to three years or with fine or both
If any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under the with respect to such goods he shall be punishable with imprisonment for a term which may extend to three years or with fine or both
If any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under any other law for the time being in force with respect to such goods he shall be punishable with imprisonment for a term which may extend to three years or with fine or both
The ingredients of the offence under section 1351 a ii would clearly be satisfied if the case falls within any one of these three parts
Each of these three parts is distinct and independent of the other two and whether a case falls within any one part or not has to be judged by reference to the ingredients of that part and not of any other part
The ingredients of one part cannot be projected in the other two parts
The first part deals with a case where in relation to any goods a person is knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable on such goods
Obviously therefore the first part
postulates that the 506 goods in respect of which the offence is committed must be goods chargeable with duty
But the second and third parts are not concerned with the question whether any duty is chargeable on the goods or not
These two parts speak only of fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under the or any other law for the time being in force in respect of any goods
What these two parts contemplate is that in respect of the goods in question there must be a prohibition imposed under the or any other law for the time being in force it being totally irrelevant whether duty is chargeable on such goods or not and the accused must be knowingly concerned in any fraudulent evasion or attempt at evasion of such prohibition
The prohibition fraudulently evaded or sought to be evaded may be with respect to any goods and it is not necessary that it should be with respect to goods on which duty is chargeable
The expression with respect to such goods had obviously to be used at the end of the section because the second and third parts of the section start with the words if any person is in relation to any goods  knowingly concerned in any fraudulent evasion or attempt at evasion
The words such goods have clearly reference to any goods at the commencement of the section
These words are not descriptive of the kind of goods to which the first part of the section is applicable
It is totally impermissible on a plain natural construction of the language used in section to read these words as importing the requirement that the goods must be chargeable with duty in order to fall within the second or third part of the section
We are therefore of the view that where goods are chargeable to duty and any person is knowingly concerned in any fraudulent evasion or attempt at evasion of such duty the case would fall within the first part of the section but where there is a prohibition imposed with respect to any goods under the or any other law for the time being in force then irrespective of whether duty is chargeable on such goods or not any person knowingly concerned in any fraudulent evasion or attempt at evasion of such prohibition would clearly be covered by the second or third part as the case may be
Here there was clearly a prohibition on export of silver without a licence imposed by the Export Trade Control order 1968 issued under section 3 of the Imports and Exports Control Act 1947 and on the facts established by the prosecution facts which could not be and were not disputed the accused were knowingly concerned in fraudulent evasion or attempt 507 at evasion of such prohibition on export of silver and their case was therefore plainly and indubitably covered by the third part of section A 1351 a ii
The learned single Judge of the High Court was consequently in error in taking the view that the accused were not guilty of the offence charged under 1351 a ii
We accordingly allow these appeals preferred by the Assistant Collector of Customs set aside the order of acquittal passed by the learned single Judge of the High Court and restore the order passed by the Additional Chief Presidency Magistrate convicting the accused under section 1351 a ii of the and sentencing them to various terms of imprisonment and fine
PBR Appeals allowed


Summary:
In the reasonable belief that the respondents were smuggling silver out of the country the Customs officials apprehended the respondents at about midnight while they were going in a fishing vessel off the coast of Bombay and found 194 ingots of silver in the vessel
I hey were prosecuted for offences under section 120 B Indian Penal Code section 1351 a ii of the  section 5 of the Imports and Exports Control Act 1947 and section 231A of the Foreign Exchange Regulations Act 1973
While the Magistrate found them guilty of all the offences the High Court on appeal set aside the conviction under the and Foreign Exchange Regulations Act
The appellant accepted the acquittal Under section 231A of the Foreign Exchange Regulations Act but impugned the judgment of the High Court in so far as it set aside the conviction under section 135 1 a ii of the 
It was contended on behalf of the prosecution that the accused were knowingly concerned with fraudulent evasion or attempt at evasion of the prohibition imposed under the Export Trade Control order of 1968 on the export of silver without licence and that therefore they were guilty of an offence under the 
The respondents on the other hand contended that the words with respect to such goods occurring in the section refer to goods on which duty was chargeable as contemplated in the first part of the section and since no duty was chargeable on export of silver it did not fall within the words with respect to such goods and therefore there was no fraudulent evasion or attempt at evasion of the prohibition on export of silver without a licence imposed under the Export Trade Control order 1968 issued under section 3 of the Imports and Exports Control Act 1947 which was punishable under the  501 Allowing the appeal  HELD Where goods are chargeable with duty and any person is knowingly concerned in any fraudulent evasion or attempt at evasion of such duty the case would fall within the first part of the section but where a prohibition is imposed with respect to any goods under the or any other law for the time being in force then irrespective of whether duty is chargeable on such goods or not any person who is knowingly concerned in any fraudulent evasion or attempt at evasion of such prohibition would be covered by the second or third part as the case may be
506 E In the instant case the Export Trade Control order 1968 issued under section 3 of the Imports and Exports Control Act 1947 prohibited the export of silver without a licence
On the facts established by the prosecution the accused were knowingly concerned in fraudulent evasion or attempt at evasion of such prohibition on export of silver and their case was therefore covered by the third part of section 1351aii
The provision enacted in section 1351aii is divisible into three parts the first part postulates that goods in respect of which the offence is committed must be goods chargeable with duty the second and third parts are not concerned with the question whether any duty is chargeable on the goods or not
They speak only of fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under the or any other law in force in respect of any goods
What they contemplate is that in respect of goods in question there must be a prohibition imposed under the or any other law for the time being in force irrespective of whether duty E is chargeable on such goods or not and the accused must be concerned in any fraudulent evasion or attempt at evasion of such prohibition
The prohibition fraudulently evaded or sought to be evaded might be with respect to any goods it is not necessary that it should be with respect to goods on which duty is chargeable
The expression with respect to such goods had to be used at the end of the section because the second and third parts start with the words if any person is in relation to any goods knowingly concerned in any fraudulent evasion or attempt at evasion
The words such goods have clearly reference to any goods at the commencement of the section
These words are not descriptive of the kind of goods to which the first part of the section is applicable
It is totally impermissible on a plain natural construction of the language used in the section to read these words as importing the requirement that the goods must be chargeable with duty in order to fall within the second or third part of the section
505 E 506 A D