Case: Issardas Daulat Ram And Others Vs. The Union Of India And Others

were long anterior to the enactment of that section and cannot obviously be governed by its provisions. For the reason that Section 178-A was in force at the stage of the appeals from the order of the Collector of Customs to the Central Board of Revenue and the Central Government and possibly under the impression that their case had been decided by throwing on them the burden of proving that the gold was not smuggled, the appellants raised in their Writ Petition to the Punjab High Court points regarding the construction and constitutionality of S. 178-A. When their petition was summarily dismissed these points were repeated in the petition for special leave to appeal filed in this Court, and special leave appears to have been granted mainly for the reason that the appeal involved the question of the constitutionality of S. 178-A of the Sea Customs Act. The appeal has for that reason been posted for hearing after the decision of this Court in Collector of Customs, Madras v. N. Sampathu Chetty, Civil Appeals Nos. 408 to 410 of 1960, etc., dated 25-9-1961 (not yet reported): (now reported in AIR 1962 SC 316 ), in which the validity of this section was considered and upheld.4. Section 178-A being put aside, it may be added, the only question now arising for decision is whether the order of the Collector of Customs holding the appellants gold seized at the refinery to be smuggled gold so as to be liable to confiscation under S. 167 (8) of the Sea Customs Act is vitiated by any error such as to call for interference under Art. 226 of the Constitution. Section 167 (8) runs in these terms:"167. The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences, respectively:-Offences Section of this Act to which offence has reference Penalties(8) 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:18 and 19such goods shall be liable to confiscation 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 finding of the Collector is recorded in paragraph 6 of his order in these terms:"Taking all the available evidence into consideration, I am satisfied that the gold bullion in question is of foreign origin and had been imported into India in contravention of Foreign Exchange Regulations Act and S. 19 of the Sea Customs Act thereby establishing an offence attracting the provisions of S. 167 (8) of the Sea Customs Act."It was not disputed that if there was material to support this decision the appeal must fail. The conclusion of the Collector involves findings on two distinct matters: (1) that the gold which was the subject of adjudication was of foreign origin, and (2) that the gold had been imported in contravention of the Foreign Exchange Regulations Act, Mr. Vishwanatha Sastri-learned Counsel for the appellant submitted that though the several facts mentioned by the Collector in Para. 5 of his order which form the basis of the finding recorded in Para. 6 might show that the gold was of foreign origin, there was no evidence before the Collector that this foreign gold had been imported after restrictions had been imposed in March 1947 by notification under the Foreign Exchange Regulations Act, a fact the onus to prove which was also on the department, and that in the absence of any material supporting that conclusion the finding that the gold was smuggled was unsustainable and that the confiscation should therefore be set aside.5. We find ourselves unable to accept the submission of learned Counsel. Though, no doubt, there was no direct evidence that the gold which was the subject of adjudication had come into the country after March 25, 1947 when the first notification under the Foreign Exchange Regulations Act placing a ban on the importation of gold was issued, it is not as this could not be deduced or inferred otherwise. There has been little or no importation of gold from outside the country since 1947.If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants in connection with (a) the credibility of the story about the purchase of this gold from three parties, (b) the price at which the gold was stated to have been purchased which was less than the market price, and (c) the hurry exhibited in trying to get the gold melted at the refinery with a small bit of silver added so as to reduce the fineness of the gold and thus approximate the resultant product to licit gold found in the market. These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned Counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in Para. 6 we have set out earlier. The Writ Petition was therefore properly dismissed by the learned Judges of the High Court.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Though, no doubt, there was no direct evidence that the gold which was the subject of adjudication had come into the country after March 25, 1947 when the first notification under the Foreign Exchange Regulations Act placing a ban on the importation of gold was issued, it is not as this could not be deduced or inferred otherwise. There has been little or no importation of gold from outside the country since 1947.If the gold now in question had been imported earlier it would be extremely improbable that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time. It was precisely for this reason that at the stage of the enquiry before the Collector the principal point which was urged on behalf of the appellants was to deny that the seized gold was of foreign origin and it is the nature of the defence that accounts for the order of the Collector dealing almost wholly with the consideration of that question. In order to reach his finding about the gold being smuggled, the Collector has referred to the conduct of the appellants in connection with (a) the credibility of the story about the purchase of this gold from three parties, (b) the price at which the gold was stated to have been purchased which was less than the market price, and (c) the hurry exhibited in trying to get the gold melted at the refinery with a small bit of silver added so as to reduce the fineness of the gold and thus approximate the resultant product to licit gold found in the market. These were undoubtedly relevant pieces of evidence which bore on the question regarding the character of the gold, whether it was licit or illicit. Learned Counsel is, therefore, not right in his submission regarding the absence of material before the Collector to justify the finding recorded in Para. 6 we have set out earlier. The Writ Petition was therefore properly dismissed by the learned Judges of the High Court.