1 Cri-Appeal-153-92.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION Mhi CRIMINAL APPEAL NO. 153 OF 1992 The State of Maharashtra ) (Shri B.S.Hebber, Assistant ) Collector of Customs,Bombay) ).. Appellant (Orig. complainant) Vs. 1. Mohandas Bolar ) Tara Apartment No.15, ) 3rd Floor, Sanghavi Estate, ) Ghatkopar, Bombay-86 ) 2. S.E.Vaz ) 16 Juhu Apartment, ) Juhu Road, Bmbay-49. ).. Respondents (Orig. Accused) Ms.A.A.Mane, Special P.P. a/w Shri Y.M.Nakhwa, APP, for the appellant - State Mr. Saikumar Pathrudum,Advocate for the respondent No.1 Mr. N.K.Thakore a/w Mr. Pavan Mali i/b. Mr. Prakash Naik, Advocates, for the respondent No.2. CORAM: J.H.BHATIA,J. DATE : 9th December, 2010. JUDGMENT: 1. The appeal is filed by the original complainant i.e. the Assistant Collector of Customs, Bombay, challenging the acquittal of the accused Nos. 1 and 2 by the learned Chief Metropolitan Magistrate, Mumbai for charges under 2 Cri-Appeal-153-92.sxw Section 135(1)(a)(i) and 135(1)(b)(ii) of the Customs Act and under Section 5 of the Imports & Exports (Control) Act, 1947 in Case No.434/CW/1991. 2. The prosecution case in brief is that on 22.2.1983, at about 9 p.m., certain Customs Officers, while patrolling the Indira Docks, kept a watch on the Vessel M.V. "Vishva Aditya", which was berthed at 13B Indira Docks. They noticed suspicious activities in the vessel and also noticed two persons, who are identified as accused Nos. 1 and 2, holding bags in their hands and getting down from the gangway. As soon as they came down from the gangway, the Customs Officers interrogated them. They disclosed their names and also admitted that they were carrying some goods of foreign origin. They also declared that accused No.1 was working as a Fitter and accused No.2 was the Chief Steward on the vessel m.v. Vishva Aditya. Both the accused along with their bags and two panch witnesses were taken to the Dock Intelligence Units Office for detailed examination. Accused No.1 was holding one briefcase and one handbag, while accused No.2 was having one briefcase. On search, approximately 30 kgs. of Cultured Pearls valued at Rs.27,000/- were found in the brief cases and the bag. As they were smuggling the cultured pearls into India in violation of prohibition under the Customs Act, these articles were seized under a panchnama. The statements of accused Nos. 1 and 2 were recorded under Section 108 of the 3 Cri-Appeal-153-92.sxw Customs Act. Accused No.1 Mohandas allegedly stated that during his earlier visit to Japan, he and accused No. 2 had decided to purchase Cultured Pearls to make profit and accordingly, they had purchased about 30 kgs. of assorted Cultured Pearls for two lac Japanese Yens, equivalent to Rs.9,000/- in Indian currency. According to him, he himself and accused No.2 Vaz had contributed one lac Yens. However, he also stated that all the pearls belonged to him and accused No.2 had nothing to do with the same except that he had agreed to carry the briefcase containing the pearls from the Dock. He also stated that the pearls were bought at Yokohama through one person, whose name was not known to him. In the statement under Section 108, accused No.2 Vaz denied that he had made any payment to accused No.1 for purchase of pearls. According to him, all the pearls belonged to accused No.1, but he had only helped him in carrying the said briefcase containing the pearls from the Dock. According to the prosecution, the said Cultured Pearls were referred to Jewellery Appraiser, who valued the same at Rs.6,68,744/- as market value. After obtaining necessary sanction from the Collector of Customs, the complaint was filed. Charges were framed. Accused pleaded not guilty. 3. On behalf of the prosecution, in all seven witnesses were examined to prove the offence and to bring home guilt to the accused. According to the 4 Cri-Appeal-153-92.sxw accused, they not brought any pearls and were falsely implicated in this case. They had also retracted the statement made under Section 108 of the Customs Act. After hearing the evidence led by the prosecution, the trial Court acquitted the accused persons on several grounds. The trial Court found that prosecution had failed to prove that the Cultured Pearls, which were allegedly seized, were of foreign origin. The description of the property produced before the Court did not tally with the description of the property which was seized under a panchnama. Lastly, the prosecution could not produce any order issued under the Imports and Exports (Control) Act, 1947 to show that the import of the Cultured Pearls into India was prohibited. The said order of acquittal is challenged in the present appeal. 4. Evidence of PW-1 Naleathachil Varghese Chacko shows that on 22.2.1983, at about 9.30 p.m. he along with the Custom sepoy went near the Shed No.13-B of the Indira Dock. Some other sepoys of the Customs Department also joined them. The vessel "M.V. Vishwa Aditya" was found berthed at 13-B Indira Dock. As per evidence of PW-1 Chacko, this team of the Customs Office and sepoys noticed that some persons were moving suspiciously on the ship and therefore, they kept a watch. Within a few minutes, two persons, who are identified as accused Nos. 1 and 2, came out from the ship by the gangway. 5 Cri-Appeal-153-92.sxw Accused No.1 was having a briefcase and a bag, while accused No.2 was also having a brief-case. On enquiry both the accused admitted that they had goods of foreign origin. Thereafter, they were taken to the Docks Intelligence Office and in presence of two witnesses, their search was taken. In the brief cases as well as in the handbags cultured pearls were found. Accordingly, the panchnama Exhibit P-1 was prepared. PW-4 Shyam Bokhariwala was a panch witness. He supported the prosecution. It appears that he was working as Customs Agent and was known to the Customs officers. PW-2 Ramchandra Shinde was the Superintendent of Customs in the Dock Intelligence Unit. According to him, on 23.2.1983, he recorded the statement of both the accused persons under Section 108 of the Customs Act. His evidence shows that he put questions to accused No. 2 in English and he also replied in English and Hindi. Another officer Vengurlekar actually scribed the statement of the accused as per dictation of PW-2 Ramchandra Shinde and after that accused No.2 accepted the same to be correct. He put signature on Exhibit P-11. His further statement was also recorded in similar method and is marked Exhibit P-12. He deposed that on the same day, he also questioned accused No.1 Mohandas Bolar in English and Hindi and he replied in Hindi and English. The statement was reduced to writing by another officer Sawant as per dictation by PW-2 Shinde. That statement is marked Exhibit 13. It bears the signature of accused No.1. His further statement was also 6 Cri-Appeal-153-92.sxw recorded and it was scribed by another officer. It is also signed by accused No.1 and it is marked Exhibit 14. From the statements of these two persons, it appears that accused No.2 did not make any confessional statement. He did not admit that he had purchased any Cultured Pearls from Japan or anywhere outside the country. He also denied that he had contributed any amount for purchase of the same. According to him, he had only helped accused No.1 in taking the bag outside from the ship and nothing else. Accused No.1 in his confessional statement stated that he had purchased the Cultured Pearls at Yokohama in Japan for 2 lac Yen equivalent to Indian Rs.9,000/-. He stated that amount of 1 lac Yens was contributed by accused No.2, but he was not the owner of the pearls and he admitted that said pearls belonged to him alone. Anyhow, as per the evidence of PW-1 Chacko supported by PW-4 Shyam Bokhariwala, it appears that in the bags in the hands of accused Nos. 1 and 2, Cultured Pearls were found and they were seized. 5. PW-3 Gopalan Bhaskaran was the Appraiser in the Jewellery Section of the Customs branch and, according to him, the pearls seized from the accused persons were referred to him for valuation. As per the quality of the pearls, he found that the total value of the said pearls was Rs.6,68,744/- as per the market value. This evidence was challenged on behalf of the accused. In fact, it is 7 Cri-Appeal-153-92.sxw surprising that in the seizure panchnama, the Customs officer PW-1 Chacko had shown the market value of the said pearls at Rs.27,000/-. He was also an experienced officer, but the value of the same was given at Rs.6,68,744/- by PW-3 Gopalan. More than the valuation, certain admissions given by PW-3 Gopalan are important. In the examination-i-chief, he stated that real pearls are found in the waters of Persian Gulf. They are called real pearls because there is no interference by human agency in their growth. In small quantities these pearls are also grown in Australian Coasts. Cultured pearls are manufactured by injecting some substance like plastic round moulds into mother of pearl and then same is kept in the Ocean water. As a result of irritation caused by foreign substance, the oyster secrets and this secretion forms into a pearl, while in real pearl the secretion takes place of its own. He deposed that Cultured Pearls were manufactured mostly in Japan and also in China. Then he admitted in examination-in-chief that very negligible quantity of Cultured Pearls is manufactured in Tuticorin in Tamil Nadu State. We do not know what quantity of cultured pearl was manufactured in Tamil Nadu. Anyhow it indicates that Cultured pearls were grown during that period in Japan and China as well asin Tamil Nadu, a State of India. One of the important contentions on behalf of the accused is that the prosecution had failed to prove that the Cultured Pearls allegedly seized from the accused persons were of foreign origin and it is contended that it is necessary for the prosecution to prove 8 Cri-Appeal-153-92.sxw that they were of foreign origin. It is pointed out that no evidence was produced by the prosecution to show that the ship had been to Yokohama or any part of Japan. Its Log Book was not seized and produced before the Court. Further, it is pointed out that before the ship came to Bombay, it had berthed at Madras Port also and there the ship was rummaged by the customs officers and that time no imported goods were found with the accused persons. On the other hand, on behalf of prosecution, it is pointed out that PW-6 Yeshwant Sawant, who was serving with Shipping Corporation of India, admitted that "Vishva Aditya" ship had arrived at the Bombay Port and on arrival, the Shipping Corporation had filed Inward Entry with the Customs. Exhibit "X" is the Import Manifest with regard to the cargo in the ship "Vishva Aditya". It was filed with the Customs on 21.2.1983 and it was signed by Capt. Naresh Karla of the ship. PW-5 Dattatraya Ranade was working as Upper Division Clerk in the Import Department of Bombay Customs. He also deposed that the ship Vishva Aditya was berthed at Bombay Port on 19.2.1983 and then Manifest Exhibit "X" was filed on 21.2.1983 by the Shipping Corporation of India. The said Manifest was marked Exhibit 16 in evidence of PW-6 Yeshwant Sawant. The said Manifest shows what cargo and the material was brought by the said ship. The said Manifest also includes a list of private property in possession of the Master, officers and crew of the ship. At Sr.No.17, name of accused No.2 S.E.Vaz is mentioned and his personal 9 Cri-Appeal-153-92.sxw belongings are also noted against his name in the said Manifest. Name of accused No.1 Mohandas is at Sr. No.18. He was shown as Fitter of the Ship. His personal belongings are also shown against his name. It is material to note that the Manifest does not show that the accused Nos. 1 and 2 were carrying any pearls or cultured pearls. It means the cultured pearls were not disclosed by them as their personal belongings in the Manifest. However, fact remains that as per the evidence of PW-1 Chacko and PW-4 Shyam Bokariwala, the panch witnesses, in the hands of accused No.1 Mohandas, one briefcase and one handbag were found. Both of them contained cultured pearls. Accused No.2 was having a briefcase which also contained about 14 kgs. of cultured pearls. Total weight of the cultured pearls seized from all the three containers was 29.276 kgs. and same were seized. The accused persons had come out of the ship when they were caught with the said baggages. It means these baggages containing pearls were with them when they were in the ship. Even though the ship might have been rummaged at the Madras Port, possibility cannot be ruled out that the customs officers might not have noticed the same. The accused have not produced any material to show that they had purchased said cultured pearls at Madras or they had purchased or received the said cultured pearls at Madras. Therefore, there is every possibility that the cultured pearls were brought into India from some foreign country, even though no specific evidence is led to show that the said cultured pearls were of 10 Cri-Appeal-153-92.sxw foreign origin. 6. The most important question is whether the import of cultured pearls was prohibited. Under Section 11 of the Customs Act, the central Government may, by notification in the Official Gazette, prohibit either absolutely or subject to certain conditions, as may be specified in the notification, the import or export of goods of any specified description. Section 111 provides for confiscation of improperly imported goods. Section 112 provides for penalty for improper importation of goods. Section 135 provides for prosecution, conviction and sentence for importation of prohibited goods, etc. Charges were framed under Section 135(1)(a)(i) and 135(1)(b)(ii) of the Customs Act and under Section 5 of the Imports & Exports (Control) Act. 7. Main contention of the prosecution is that the cultured pearls were prohibited goods and they could not be imported into India without licence. Section 3 of the Imports & Exports (Control) Act, 1947 also provides that the Central Government by an order published in the official Gazette make provision for prohibiting, restricting or otherwise controlling in all cases or in specified classes of cases, the import, export, carriage of goods of any specified description etc. All goods to which sub-section (1) of section 3 applies, shall be deemed to be 11 Cri-Appeal-153-92.sxw the goods of which the import or export has been prohibited under Section 11 of the Customs Act. Section 5 of the Imports & Exports (Control) Act provides for punishment for import of prohibited items. The Government of India, Ministry of commerce and Industry issued Imports (Control) Order, 1955. Rule 3 of the said Imports Control Order provides that save as otherwise provided in the said Order, no person shall import any goods of the description specified in Schedule I, except under and in accordance with a licence or a customs clearance permit granted by the Central Government or by any officer specified in Schedule II. It means the goods specified in Schedule I cannot be imported without appropriate licence or permit. Schedule I contains six parts showing different goods, import of which is prohibited except under a licence of permit. At Sr. No.254 Part IV of that schedule, there is a mention of Pearls, unset. It means unset pearls cannot be imported into India without proper licence or permit. Pearls at Sr. No.254 must mean natural pearls. There is no mention of cultured pearls along with the entry of pearls or anywhere else in the said Schedule. Learned APP took sufficient time to make search on this subject and could not point out from the Schedule that cultured pearls are also included in the Schedule and that the import of the cultured pearls is prohibited under the Imports Control Order 1955. It appears that before the trial Court also this point was raised by the learned defence counsel and in reply to that the learned Special P.P. had contended that cultured pearls are 12 Cri-Appeal-153-92.sxw to be found at Entry No.71. However, entry No.71 in Part IV pertains to Sugar- candy. Similarly, in Parts I, II, III, V or VI also there is no entry pertaining to cultured pearls. The learned APP referred to the Customs Tariff Act, 1975.In fact, the Customs Tariff Act only provides for the rates of duty to be charged on different items, which are imported. In Chapter 71 of the Customs Tariff Act Tariff heading No.7101 pertains to natural or cultured pearls. Sub-heading 7101-10 specifically deals with natural pearls and item 7101.21 deals with cultured pearls. It shows that in the Customs Tariff Act, the legislature has specifically mentioned the "cultured pearls" and "natural pearls" separately. As long as the word "pearls" is used, unless it is to be understood in a different sense as under the Customs Tariff Act, it has to mean natural pearls. Customs Tariff Act does not speak about prohibition on import of goods. It only speaks about the tariff to be imposed. Schedule I to the Import Control Order specifically prohibits the goods which cannot be imported without licence or permit. as pointed out above, item No.254 in Part IV of the said Schedule speaks only about pearls. Nowhere it is mentioned that cultured pearls are also included within the meaning of pearls. The learned APP could not point out any provision in the Customs Act or in the Imports Exports Control Act or in the Imports Control Order, 1955 to show that the pearls within the meaning of entry No.254 in Part IV of the Schedule include cultured pearls also. As `cultured pearls' do not appear to have 13 Cri-Appeal-153-92.sxw been included within the term `pearls', it cannot be said that their import is prohibited. If the prosecution fails to prove that the import of cultured pearls is prohibited,naturally the charges under Section 5 of the Imports & Exports (Control) Act as well as the charges under the Customs Act based on the prohibition under the Imports & Exports (Control) Act cannot stand. 8. In view of the facts, even if for the sake of arguments it is to be believed that the accused persons had imported the cultured pearls, as the prosecution failed to prove that the import of the same was prohibited, the prosecution cannot succeed and the accused cannot be convicted for the charges levelled against them. Therefore, I find no reason to interfere in the order of acquittal. 9. For the aforesaid reasons, the Appeal stands dismissed. (J.H.BHATIA,J.) 14 Cri-Appeal-153-92.sxw