Case: M/s. Kanungo &amp; Co Vs. The Collector of Customs, Calcutta &amp; Others

give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities. Accordingly we hold that there is no force in the third contention of the appellant.13. There is also no force in the second point because we do not read the impugned order as having wrongly placed the burden on the appellant. What the impugned order does is that it refers to the evidence on the record which militates against the version of the appellant and then states that the appellant had not been able to meet the inferences arising therefrom. In our opinion, the High Court was right in holding that the burden of proof had shifted on to the appellant after the Customs Authorities had informed appellant of the results of the enquiries and investigations.14. This also disposes of the first point, as we have said, the burden was on the Customs Authorities which they discharged by falsifying in many particulars the story put forward by the appellant.15. Coming to the fourth point, we are of the opinion that, except for certain items there is evidence in favour of the conclusion of the High Court. It cannot be disputed that a false denial could be relied on by the Customs Authorities for the purpose of coming to the conclusion that the goods had been illegally imported. In Issardas Daulat Ram v. Union of India, (1962) Supp. 1 SCR 358 at p. 363 the credibility of the story about the purchase of gold from certain parties was treated as a relevant piece of evidence.16. In, however, seems to us that there is something to be said for the Appellant in respect of 54 pieces of watches which are stated to have been received by the Appellant for correction and repair. In Paras 8, 9 and 10 of the show cause notice it was stated as follows :"(8) Of the persons from whom the said 54 pcs. of watches are alleged to have been received for correction and repair, almost all of them made more or less stereotype statements on the following lines :(a) That the watch in question was imported into India by a relative who had arrived from East Pakistan.(b) That the watches were presented to him/her by a relative.(c) That the watch was new at the time of presentation but not keeping correct time.(d) That the watch was given to the M/s Kanungo & Co. for correction/repair as M/s Kanungo & Co. were known to them for a long time.(e) That he/she was not sure about the watch band as he/she had asked M/s Kanungo & Co. to change the band.(f) That the cost for correction had not been settled but had been left to M/s Kanungo & Co.(g) That he/she has no documentary evidence whatsoever in support of the watch in question having been legally imported or acquired.(9) Further some parties from whom watches were alleged to have been received for repairs under Repair Receipts produced and which watches were claimed by M/s Kanungo & Co. to have been seized on 17-10-59 have confirmed that they did never give any watches to M/s Kanungo & Co. and neither were they in possession of any repair receipts but that they have been falsely implicated.(10) For the reasons mentioned heretofore the bona fide of the correction slip and Repair Receipt Books cannot be accepted and only goes to show that M/s Kanungo & Co. have as afterthought made an attempt to satisfactorily account for 54 pieces of watches which are in fact not covered by any documentary evidence to establish legal acquisition or legal importation and there are reasons to believe prima facie that these 54 watches were illegally imported into India."In our opinion it would be impossible for a watch-repair to produce any further evidence in order to justify possession of watches. A watch-repairer cannot be expected to go into the history of the acquisition of a watch when it is given for repair. The onus being on the Customs Authorities, the type of the statements mentioned in Para 8 cannot be held to be sufficient to discharge the onus which lay on them. Further, no indication has been given in Para 9 as to how many parties had stated that they never gave any watches to the Appellant. The apparent bona fides of the correction slip and receipt book mentioned in Para 10 could not be ignored on the reasons given by the Customs Authorities. Para 10 proceeds on the basis that the onus is on the Appellant to prove that the watches had not been illegally imported.17. There is also one wrist watch mentioned on Para 18, which in our opinion has been wrongly confiscated. In Para 18 it is stated :"18. 1 piece Romer wrist watch (Item 51 of the inventory) was claimed by M/s Kanungo & Co. to have been imported from M/s Romer Watch Co., Switzerland under Factory Invoice No. 1007/PM/JN dated 8-2-55 and cleared under Bill of entry No. Cash 1857 dated 9-2-55. This 1 piece was not shown in the Stock Register of M/s Kanungo & Co. for 1958-59 where the balance shown was Nil and as such the watch seized could not possibly be the same watch as was imported by M/s. Kanungo & Co. and had been illegally imported into India."The fact that it was not shown in the stock register is not material to show that it has been illegally imported. It is not stated by the Authorities that the invoice and the bill of entry had nothing to do with this watch.

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

Explanation:
1[ds]12. We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the show cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it tothem. In our opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to beby them on the statements made before the Customs Authorities. Accordingly we hold that there is no force in the third contention of the appellant.13. There is also no force in the second point because we do not read the impugned order as having wrongly placed the burden on the appellant. What the impugned order does is that it refers to the evidence on the record which militates against the version of the appellant and then states that the appellant had not been able to meet the inferences arising therefrom. In our opinion, the High Court was right in holding that the burden of proof had shifted on to the appellant after the Customs Authorities had informed appellant of the results of the enquiries and investigations.14. This also disposes of the first point, as we have said, the burden was on the Customs Authorities which they discharged by falsifying in many particulars the story put forward by the appellant.15. Coming to the fourth point, we are of the opinion that, except for certain items there is evidence in favour of the conclusion of the High Court. It cannot be disputed that a false denial could be relied on by the Customs Authorities for the purpose of coming to the conclusion that the goods had been illegally imported. In Issardas Daulat Ram v. Union of India, (1962) Supp. 1 SCR 358 at p. 363 the credibility of the story about the purchase of gold from certain parties was treated as a relevant piece ofour opinion it would be impossible for ato produce any further evidence in order to justify possession of watches. Acannot be expected to go into the history of the acquisition of a watch when it is given for repair. The onus being on the Customs Authorities, the type of the statements mentioned in Para 8 cannot be held to be sufficient to discharge the onus which lay on them. Further, no indication has been given in Para 9 as to how many parties had stated that they never gave any watches to the Appellant. The apparent bona fides of the correction slip and receipt book mentioned in Para 10 could not be ignored on the reasons given by the Customs Authorities. Para 10 proceeds on the basis that the onus is on the Appellant to prove that the watches had not been illegally imported.There is also one wrist watch mentioned on Para 18, which in our opinion has been wronglyfact that it was not shown in the stock register is not material to show that it has been illegally imported. It is not stated by the Authorities that the invoice and the bill of entry had nothing to do with this watch.