Case: Kewal Krishan Vs. State Of Punjab

3. The appellant on February 11, 1958, when he was sitting in a third class compartment of the Amritsar Kalka train standing on Platform No. 5 of the Amritsar Railway Station, was searched by a Customs Official and some bars of gold were found tied round his waist. These gold bars were seized and a recovery memo was prepared. Out of these gold bars four were of base metal and the rest were of pure gold some bearing the stamp of Johnson Mathey and Co. Ltd., 995-10 tolas and 21/2 bars bore marks of N. M. Rothschild and Sons 10 tolas (990-1). No permit from the Reserve Bank to import this gold was produced by the appellant. Under the Foreign Exchange Regulation Act, 1947, the importation of gold without such permit is prohibited and such contravention is punishable under S. 23-A of the said Act read with S. 167(81) of the Sea Customs Act4. The appellant was prosecuted under S. 23A of the Foreign Exchange Regulation Act and S. 167 (81) of the Sea Customs Act and his defence was that he was not in possession of the gold bars which were taken from an attache case left by a stranger under the seat where he (the appellant) was sitting. The Additional District Magistrate held the offence to be proved and convicted the appellant of the offence and sentenced him to one years rigorous imprisonment. An appeal to the Sessions Judge resulted in the reduction of the sentence to 8 months rigorous imprisonment. On Revision to the High Court the sentence was reduced to six months rigorous imprisonment. The appellant has come in appeal by special leave.

Reasoning:
There is nothing to indicate in their cross-examination that the officers did not have a reasonable belief that the goods were smuggled goods and the question that the officers did not have reasonable belief is not suggested either from the cross-examination of these witnesses or from the findings of the Courts below. Even in his statement of case it is contended that the mere existence of stamp of foreign companies on gold does not necessarily prove that the gold is of foreign origin. It might be put on spurious gold which may be of Indian origin. In our opinion apart from the fact that this question has not been raised, it is quite clear that when S. 178A of the Sea Customs Act provides that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods is on the person from whose possession the goods are seized. The onus is on him to show that the goods are not smuggled, that is, not of foreign origin on which duty is not paid. The onus is not on the prosecution to show that the goods are not of Indian origin. That appears to be the view taken in 1962-1 SCJ 68  . (AIR 1962 SC 316  ), where at p. 93 (of SCJ): (at p. 338 of AIR), the learned Judges observed:We are, therefore, of opinion (1) that S. 178A was constitutionally valid, (2) that the rule as to the burden of proof enacted by that section applies to a contravention of notification under S. 8 (1) of the Foreign Exchange Regulation Act 1947 by virtue of its being deemed to be a contravention of a notification under S. 19 of the Sea Customs Act, (3) that the preliminary requirement of S. 178A that the officer seizing should entertain "a reasonable belief that the goods seized were smuggled" was satisfied in the present case."