Appeal No 153 of 1956
Appeal from the judgment and order dated November 3 1954 of the Punjab High Court in Civil Writ No 253 D of 1954
Veda Vyasa section K Kapur K K Jain and Ganpat Rai for the appellant
H N Sanyal Additional Solicitor General of India H R Khanna and T M Sen for the respondents
935 1960
October 3
The Judgment of the Court was delivered by SUBBA RAO J
This appeal by certificate is directed against the order of the High Court of Judicature of the State of Punjab dismissing the petition filed by the appellant under article 226 of the Constitution
The facts giving rise to this appeal may be briefly stated
The appellant is at present a resident of Barmer in the State of Rajasthan
But before 1947 he was living in a place which is now in Pakistan
On June 22 1951 the Deputy Superintendent Land Castoms Station Barmer conducted a search of the appellant s house and recovered therefrom the following ten articles  Articles seized
Weight Estimated value
Rs 1
Silver slab
2600 tolas 5200 2 29 Sovereigns 2262 King Ed VII
3 9 pieces of gold bullion 201 tolas and 9 mashas
22193 4
4 pieces of silver bullion 114 tolas
230 5
Uncurrent silver coins numbering 575
865 6
Gold bars
49 tolas and 9 mashas 5475 7
255 Phials of liquid gold
9875 8
Torches 23 9
Playing cards 3 Dozens 400 10Glass beads 48 packets
Total 46500 On July 14 1951 the Assistant Collector Ajmer gave notice  to the appellant to show cause and explain why the goods seized from him should not be confiscated under section 1678 of the Sea Customs Act and section 7 of the 
The appellant in his reply 936 stated that items to 5 supra were brought by him from Pakistan after the partition of the country in 1947 and that items 6 to 10 were purchased by him bonafide for value in Barmer
On October 27 1951 the appellant appeared before the Collector of Central Excise who made an enquiry and admitted before him that items 6 to 10 were smuggled goods from Pakistan but in regard to the other items be reitera ted his plea that he originally brought them from Pakistan in the year 1947
The Collector of Central Excise held that the appellant bad failed to establish that items 1 to 5 had been brought by him to India in the year 1947 and he also did not accept the plea of the appellant in regard to items 6 to 10 that he was a bonafide purchaser of them
In the result he held that all the goods were imported into India in contravention of i section 3 of the Import Export Control Act read with sections 19 and 1678 of the Sea Customs Act ii sections 4 and 5 of the read with section 7 thereof
He made an order of confiscation of the said articles under section 1678 of the Sea Customs Act and section 7 of the  but under section 183 of the Sea Customs Act he gave him an option to redeem the confiscated goods within four months of the date of the order on payment of a sum of Rs 25000
In addition he imposed a penalty of Rs 1000 and directed the payment of import duty leviable on all the items together with other charges before the goods were taken out of customs control
Aggrieved by the said order the appellant preferred an appeal to the Central Board of Revenue
The Central Board of Revenue agreed with the Collector of Central Excise that the onus of proving the import of the goods in question was on the appellant
In regard to items 1 to 5 it rejected the plea of the appellant mainly on the basis of a statement alleged to have been made by him at the time of seizure of the said articles
In the result the appeal was dismissed
The revision filed by the appellant to the Central Government was also dismissed on August 28 1953
Thereafter the appellant filed a writ petition under article 226 of the Constitution in the High Court 937 of Punjab but it was dismissed by a division bench of the High Court on November 3 1954
Hence this appeal
It would be convenient to deal with this appeal in two parts one in regard to items 1 to 5 and the other in regard to items 6 to 10
The decision in regard to items 1 to 5 turns purely on the question of onus
The Collector of Central Excise as well as the Central Board of Revenue held that the onus of proving the import of the goods lay on the appellant
There is no evidence adduced by the customs authorities to establish the offence of the appellant namely that the goods were smuggled into India after the raising of the customs barrier against Pakistan in March 1948
So too on the part of the appellant except his statement made at the time of seizure of the goods and also at the time of the inquiry that he brought them with him into India in 1947 no other acceptable evidence has been adduced
In the circumstances the question of onus of proof becomes very important and the decision turns upon the question on whom the burden of proof lies
This Court has held that a customs officer is not a judicial tribunal and that a proceeding before him is not a prosecution
But it cannot be denied that this relevant provisions of the Sea Customs Act and the are penal in character
The appropriate customs authority is empowered to make an inquiry in respect of an offence alleged to have been committed by a person under the said Acts summon and examine witnesses decide whether an offence is committed make an order of confiscation of the goods in respect of which the offence is committed and impose penalty on the person concerned  see sections 168 and 171A of the Sea Customs Act and sections 5 and 7 of the 
To such a situation though the provisions of the Code of Criminal Procedure or the Evidence Act may not apply except in so far as they are statutorily made applicable the fundamental principles of criminal jurisprudence and of natural justice must necessarily apply
If so the burden of proof is on the customs authorities and they have to 938 bring home the guilt to the person alleged to have committed a particular offence under the said Acts by adducing satisfactory evidence
In the present case no such evidence is forthcoming indeed there is no tittle of evidence to prove the case of the customs authorities
But it is said that the onus shifted to the appellant for three reasons namely i by reason of the provisions of section 178A of the Sea Customs Act ii by reason of section 5 of the  and iii by reason of section 106 of the Evidence Act
Section 178A of the Sea Customs Act does not govern the present case for that section was inserted in that Act by Act No XXI of 1955 whereas the order of confiscation of the goods in question was made on January 18 1952
The section is prospective in operation and cannot govern the said order
Nor does section 5 of the apply to the present case
Under section 51 of the said Act Every person desiring to pass any goods by land out of or into any foreign territory shall apply in writing for a permit for the passage thereof to the Land Customs Officer incharge of a land customs Station By sub section
2 of section 5 of the said Act if the requisite duty has been paid or the goods have been found by the Land Customs Officer to be free of duty the Land Customs Officer is empowered to grant a permit
Under sub section
3 thereof  Any Land Customs Officer duly empowered by the Chief Customs authority in this behalf may require any person in charge of any goods which such Officer has reason to believe to have been imported or to be about to be exported by land from or to any foreign territory to produce the permit granted for such goods and any such goods which are dutiable and which are unaccompanied by a permit or do not correspond with the specification contained in the permit produced shall be detained and shall be liable to confiscation This section has no bearing on the question of onus of proof
This section obviously applies to a case where a permit is required for importing goods by land from a foreign country into India and it empowers the Land Customs Officer who has reason to believe that any 939 goods have been imported by land from any foreign territory to demand the permit and to verify whether the goods so imported correspond with the specification contained in the permit
If there was no permit or if the goods did Dot correspond with the specification contained in the permit the said goods would be liable to be detained and confiscated
The application of this section is conditioned by the legal requirement to obtain a permit
If no permit is necessary to import goods into India the provisions of the section cannot be attracted
In the present case the customs barrier was established only in March 1948 that is after the said items of goods are stated by the appel lant to have been brought into India
We cannot also accept the contention that by reason of the provisions of section 106 of the Evidence Act the onus lies on the appellant to prove that he brought the said items of goods into India in 1947
Section 106 of the Evidence Act in terms does not apply to a proceeding under the said Acts
But it may be assumed that the principle underlying the said section is of universal application
Under that section when any fact is especially within the knowledge of any person the burden of proving that fact is upon him
This Court in Shambu Nath Mehra vs The State of Ajmer 1 after considering the earlier Privy Council decisions on the interpretation of section 106 of the Evidence Act observed at p 204 thus The section cannot be used to undermine the well established rule of law that save in a very exceptional class of case the burden is on the prosecution and never shifts If section 106 of the Evidence Act is applied then by analogy the fundamental principles of criminal jurisprudence must equally be invoked
If so it follows that the onus to prove the case against the appellant is on the customs authorities and they failed to discharge that burden in respect of items 1 to 5
The order of confiscation relating to items 1 to 5 is set aside
Before closing this aspect of the case some observations have to be made in respect of the manner in 1  940 which the statement given by the appellant when the goods were seized was used against him by the customs authorities
It would be seen from the order of the Collector of Central Excise as well as that of the Central Board of Revenue that they had relied upon the statement alleged to have been made by him at the time the search was made in his house in order to reject his case that he brought some of the items of goods into India in the year 1947
The appellant in his reply to the show cause notice complained that his statement was taken in English that he did not know what was recorded and that his application for inspection and for the grant of a copy of his statement was not granted to him
It does not appear from the records that he was given a copy of the statement or that he was allowed to inspect the same
In the circumstances we must point out that the customs authorities were not justified to rely upon certain alleged discrepancies in that statement to reject the appellant s subsequent version
If they wanted to rely upon it they should have given an opportunity to the appellant to inspect it and at any rate should have supplied him a copy thereof
Coming to items 6 to 10 we have no reason to reject as we have been asked to do the statement made in the order of the Collector of Central Excise dated October 27 1951 that the appellant accepted that items 6 to 10 were smuggled goods from Pakistan
It would have been better if the customs authorities had taken that admission in writing from the appellant for that would prevent the retraction of the concession on second thoughts
That apart it is more satisfactory if a body entrusted with functions such as the customs authorities are entrusted with takes that precaution when its decision is mainly to depend upon such admission
But in this case having regard to the circumstances under and the manner in which the said concession was made we have no reason to doubt the correctness of the statements of fact in regard to this matter made in the orders of the customs authorities
If so it follows that the finding of the customs authorities that the appellant purchased the said items which were smuggled goods should 941 prevail
The order of confiscation of these five items will therefore stand
Even so it is contended by the learned counsel for the appellant that the customs authorities went wrong in imposing a penalty on him under section 1678 of the Sea Customs Act
The said section reads  If any goods the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act be imported into or exported from India contrary to such prohibition or restriction  such goods shall be liable to con fiscation and any person concerned in any such offence shall be liable to a penalty not exceeding three times the value of the goods or not exceeding one thousand rupees The appellant s argument is that though he purchased the said smuggled goods he is not concerned with the importation of the goods contrary to the prohibition or restriction imposed by or under Ch
IV of the Sea Customs Act
The offence consists in importing the goods contrary to the prohibition and therefore the argument proceeds a person who has purchased them only after they were imported is not hit by the said section
There is some force in this argument but we do not propose to express our final view on the matter as the appellant is liable to the penalty under section 71c of the 
The said section reads  Section 7 1 Any person who caids in so passing or conveying any goods or knowing that any goods have been so passed or conveyed keeps or conceals such goods or permits or procures them to be kept or concealed shall be liable to a penalty not exceeding where the goods are not dutiable fifty or where the goods or any of them are dutiable one thousand rupees and any dutiable goods in respect of which the offence has been committed shall be liable to confiscation
 In this case the finding is that the appellant with the 120 942 knowledge that the goods had been smuggled into India kept the goods and therefore he was liable to penalty under that section
We hold that the penalty was rightly imposed on him
It is then contended that the Collector of Central Excise had no jurisdiction to impose conditions for the release of the confiscated goods
The Collector of Central Excise in his order says  In addition the import duty leviable on all these items together with other charges if any payable should be paid and necessary formalities gone through before the goods can be passed out of Customs Control 
In Shew
pujanrai Indrasanrai Ltd vs The Collector of Customs 1 a similar question arose for consideration of this Court
There by an impugned order the Collector of Customs imposed two conditions for the release of the confiscated goods namely 1 the production of a permit from the Reserve Bank of India in respect of the gold within four months from the date of despatch of the impugned order and 2 the pay ment of proper customs duties and other charges leviable in respect of the gold within the same period of four months
This Court held agreeing with the High Court that the Collector of Customs had no jurisdiction to impose the said two conditions
The learned Additional Solicitor General concedes that the said decision applies to the present case
We do not therefore express any view whether that decision can be distinguished in its application to the facts of the present case
On the basis of the concession we hold that the conditions extracted above being severable from the rest of the order should be deleted from the said order of the Collector of Central Excise
Learned counsel for the appellant then argues that the option given in the said order to the appellant to redeem the confiscated goods for home consumption within four months of the order on payment of Rs 25000 was based upon the validity of the confiscation of all the ten items and as this Court now holds that confiscation was bad in respect of items 1 1  943 to 5 the amount of the penalty of Rs 25000 should proportionately be reduced
There is justification for this contention
But we cannot reduce the amount as under section 183 of the Sea Customs Act the amount has to be fixed by the concerned officer as he thinks fit
But as the basis of the order partially disappears we give liberty to the appellant to apply to the customs authorities for giving him an option to redeem the confiscated goods on payment of a lesser amount having regard to the changed circumstances
In the result the appeal is allowed in part and the order of the Collector of Central Excise is accordingly modified in terms of the finding given by us
As the parties succeeded and failed in part they are directed to bear their own costs
Appeal partly allowed


Summary:
The term foodstuff is ambiguous
In one sense it has a narrow meaning and is limited to articles which are eaten as food for purposes of nutrition and nourishment and so would exclude condiments and spices such as yeast salt pepper baking powder and turmeric
In a wider sense it includes everything that goes toto the preparation of food proper as understood in the narrow sense to make it more palatable and digestible
Whether the term is used in a particular statute in its wider or narrower sense cannot be answered in the abstract 878 but must be answered with due regard to the background and context
Turmeric is a foodstuff within the meaning of cl
3 of the Spices Forward Contract Prohibition Order of 1944 read with s2 aof the Essential Supplies Temporary Powers Act XXIV of 1946
The said order of 1944 falls within the purview of section 5 of Ordinance No XVIII of 1946 which was later reenacted as Act XXIV of 1946 and it is equally saved by section 17 2 of the Act
James vs Jones  Hinde vs Allmond 87 LJ KB 893 Sainsbury vs Saunders referred to