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Neithanga Hmar and anr. Vs. Assistant Collector of Central Excise and Land Customs and anr. - Court Judgment

LegalCrystal Citation
Subject;Criminal
CourtGuwahati High Court
Decided On
Judge
AppellantNeithanga Hmar and anr.
RespondentAssistant Collector of Central Excise and Land Customs and anr.
Prior history
T.N.R. Tirumalpad, J.C.
1. Petitioner No. 1, Neithanga Hmar, was searched by P.W. 1 H.K. Nag, the Preventive Officer of Central Excise and Land Customs at about 9-00 a.m. on 21-8-1959 when he arrived by bus at Kwakeithel Bazar near Imphal from Churachandpur. P.W. 1 had some Information that smuggled gold was being brought by the said bus. Petitioner No. 1 who is a Subedar in the Assam Regiment was In his military uniform. When he was searched, it was found that underneath his uniform, he was w
Excerpt:
- - in paragraphs 42 and 48 of his judgment, the learned sessions judge has stated that the petitioners had failed to discharge the burden lying on them under section 178-a of the sea customs act for showing that the seized gold was not smuggled gold and again that the presumption under section 178-a of the sea customs act left no room for doubt that the recovered gold bars were smuggled. 11. when we come to the land customs act, we find it stated in section 9 that the provisions of the sea customs act, specified in the schedule, so far as they are applicable, would apply for the purpose of the levy of duties of land customs under the said act in like manner as they apply for the purpose of the levy of duties of customs on goods imported or exported by sea and that for the purpose of..... t.n.r. tirumalpad, j.c.1. petitioner no. 1, neithanga hmar, was searched by p.w. 1 h.k. nag, the preventive officer of central excise and land customs at about 9-00 a.m. on 21-8-1959 when he arrived by bus at kwakeithel bazar near imphal from churachandpur. p.w. 1 had some information that smuggled gold was being brought by the said bus. petitioner no. 1 who is a subedar in the assam regiment was in his military uniform. when he was searched, it was found that underneath his uniform, he was wearing a waist-coat in which there were 30 pockets which had been stitched and when the said pockets were unstitched, it was found that each pocket contained a gold bar weighing 16 and odd tolas making in all 480 and odd tolas of gold. the gold bars were found hammered in order to prevent their place.....
Judgment:

T.N.R. Tirumalpad, J.C.

1. Petitioner No. 1, Neithanga Hmar, was searched by P.W. 1 H.K. Nag, the Preventive Officer of Central Excise and Land Customs at about 9-00 a.m. on 21-8-1959 when he arrived by bus at Kwakeithel Bazar near Imphal from Churachandpur. P.W. 1 had some Information that smuggled gold was being brought by the said bus. Petitioner No. 1 who is a Subedar in the Assam Regiment was In his military uniform. When he was searched, it was found that underneath his uniform, he was wearing a waist-coat in which there were 30 pockets which had been stitched and when the said pockets were unstitched, it was found that each pocket contained a gold bar weighing 16 and odd tolas making in all 480 and odd tolas of gold. The gold bars were found hammered in order to prevent their place of origin being known, i.e., whether they were of Indian origin or foreign origin. He made a statement Ext. A-2 to the Superintendent of Land Customs (P.W. 7), stating that his cousin Zaphira Hmar, petitioner No. 2, gave the said gold bars to him along with the waist-coat on 20-8-1959 at Churachandpur asking him to carry the said gold to Imphal and promising to take back the gold from him at Imphal and that he, was not the owner of the gold and did not know whether the gold was brought from Burma, or whether there was any permit from the Reserve Bank of India for bringing the seized gold into India.

2. On 22-8-1959, petitioner No. 2 appeared In the Customs Office and gave the statement Ext. A-20 in which he admitted that the said gold belonged to him and that he had handed it over to petitioner No. 1 stitched inside the waist-coat to be carried to Imphal and that petitioner No. 1 himself did not know what the waist-coat contained. He said that it belonged to his father before the latter's death in 1937 and that subsequently, his brother owned the gold and that at the time of his brother's death In 1947, it was handed over to him and that he had kept the same with him until then and sent It to Imphal as he wanted to sell the gold. Petitioner No. 2, was then arrested and released on ball.

3. Thereafter, notices were issued to the petitioners under Section 167(8) of the Sea Customs Act read with Section 23(A) of the Foreign Exchange Regulation Act and the gold was confiscated and penalty of Rs. 5,000/- and Rs. 25,000/- respectively were Imposed on petitioners 1 and 2 by the order Ext. E/3 dated 2-11-1959 of the Collector of Central Excise. In the meantime, 7 samples were taken from the bars and sent for chemical analysis and assay and the report Ext. A/21 supported by the certificates - Ext. A/10 to Ext. A/16 was received, from which It was found that the fineness of the gold in case of all the seven samples was higher than in the case of gold produced in India. The maximum fineness of gold produced in India was 997.0 per mille, whereas in the seven samples two were found to be 1 mille above the said fineness, while remaining 5 varied from. 4 per mille to 1.9 per mille of higher fineness. The Bullion Registrar, gave the report - Ext. A/8 on this, stating that It can be maintained that the gold was not of Indian origin, but he added that as the fineness of two of the samples were merely. 1 per mille above the fineness limit of gold which can be produced in India, he was of opinion that the charge of importing the gold cannot be upheld on the basis of either assay or analysis.

4. On 27-8-1959, the Collector of Land Customs, Shillong, authorised the Assistant Collector of Land Customs, Silchar by Ex. A/17, to institute Criminal Case against the two petitioners under Section 167(81) of the Sea Customs Act, Section 23 of the Foreign Exchange Regulation Act and Section 7(1) of the Land Customs Act. Then, the complaint was filed before the Additional District Magistrate, Manipur, on 12-1-1960 under those sections.

5. The defence of the petitioners was the same as In the statements Ext. A/2 and Ext. A/20 already referred to by me. The A.D.M. did not accept the defence and sentenced both of them to two years' R.I. under the Sea Customs Act, 16 months R.I. under the Foreign Exchange Regulation Act and 4 months' R.I. under the Land Customs Act and directed that the sentences should run consecutively. In appeal, the Sessions ludge set aside the conviction of the petitioners under Section 167(81) of the Sea Customs Act on the ground that Section 186 of the said Act would permit punishment only under any other law, when once confiscation has been made and penalty imposed under Section 167(8) of the Sea Custums Act and that therefore the petitioners cannot be prosecuted under Section 167(81) of the said Act. He however maintained the convictions and sentences under the Foreign Exchange Regulation Act and the Land Customs Act. But he directed that the sentences shall run concurrently instead of consecutively as ordered by the A.D.M. This revision petition has now been filed by the petitioners against the confirmation of their sentences and convictions under the latter two enactments,

6. The Government have not filed any appeal against the acquittal of the petitioners of the charge under Section 167(81) of the Sea Customs Act. Hence, it is not necessary for me to deal with the question whether the said acquittal was right or. wrong, though the learned Government Advocate painted out to me a direct decision of the Madras High Court in Mohammed Kasim v. Assistant Collector of Central Excise, Madurai reported in : AIR1962Mad85 , in which it has been held that Section 186 of the Sea Customs Act was not a bar to a prosecution under Section 167(81) of the said Act, even though civil penalties under Section 167(8) have been imposed by the Customs Authorities.

7. There has been considerable argument before me as to whether the prosecution had to prove that the gold seized in this case was smuggled gold or as to whether it was for the defence to prove the contrary. Section 178-A of the Sea Customs Act provided that when any goods to which the said section applied were seized under the Sea Customs Act in the reasonable belief that they were smuggled goods, the burden of proof that they were not smuggled goods shall be on the persons from whose possession the goods were seized. The constitutionality of this section has been now set at rest by two Supreme Court decisions, Babulal Amthalal Mehta v. Collector of Customs Calcutta : 1983ECR1657D(SC) and Collector of Customs, Madras v. N. Sampathu Chetty : 1983ECR2198D(SC) and it has been held that the said section does not offend against Article 14 or Article 19(1)(f) and (g) of the Constitution. Thus, as far as any penal proceedings under the Sea Customs Act are concerned, the burden of proving that they are not smuggled goods will be on the person from whose possession the goods were seized, If the goods were seized in the reasonable belief that they were smuggled goods.

8. We are not concerned in this revision with proceedings under the Sea Customs Act, as the petitioners have been acquitted already under that Act and we have now before us only the proceedings under the Foreign Exchange Regulation Act and the Land Customs Act. It Is not quite clear from the Sessions Judge's decision whether he really relied on Section 178-A of the Sea Customs Act as throwing the burden of proof on the accused. In paragraphs 42 and 48 of his judgment, the learned Sessions Judge has stated that the petitioners had failed to discharge the burden lying on them under Section 178-A of the Sea Customs Act for showing that the seized gold was not smuggled gold and again that the presumption under Section 178-A of the Sea Customs Act left no room for doubt that the recovered gold bars were smuggled. Again, in paragraph 51, he has held that in the present case the benefit of Section 178-A was available to the prosecution.

The learned Sessions Judge did not, however, discuss the question separately whether the said burden was available to the prosecution in the proceedings under the Foreign Exchange Regulation Act and the Land Customs Act. It was necessary for him to decide that question, as he was acquitting the petitioners of the charge under the Sea Customs Act and was dealing with the cases only under the Foreign Exchange Regulation Act and the Land Customs Act and the question would arise whether the presumption under Section 178-A of the Sea Customs Act would be available for the prosecution in dealing with the cases under the other two enactments. But in our present case, the prosecution had not relied solely on that presumption, but had let in evidence in support of their case that the gold seized was of foreign origin and not of Indian origin. Both the lower Courts have also discussed the question independently of the presumption under Section 178-A of the Sea Customs Act and have come to the conclusion that the gold seized was smuggled gold of foreign origin and not of Indian origin.

9. Thus this case need not be decided on the presumption under Section 178-A of the Sea Customs Act alone. Nor, need much time be taken to go into the further question under Section 178-A whether the gold was seized by the Preventive Officer In the reasonable belief that it was smuggled. It is enough to say that the clandestine manner, in which the gold was being carried by the first petitioner underneath his military jacket in a special waist-coat made for the purpose with pockets Inside which the gold bars were stitched, was sufficient to make even an ordinary man, let alone a Customs Officer, entertain the reasonable belief that the gold has been smuggled from the nearby foreign territory. I am not Impressed with the suggestion made for the petitioners that in the road from Churachandpur to Imphal there was danger from Nagas and pickpockets and hence the gold had to be carried secretly. If that was the idea, it was not necessary to have the gold bars hammered in such a manner as to prevent their origin being unknown.

The learned Sessions Judge has also referred in paragraph 25 of his judgment to Exts. B/1 and B/2 the show cause notices issued to petitioner No. 1 by the Customs Authorities in which It was mentioned that there was reason to believe that the seized bars had been imported on or before 21-8-1959 through an unauthorised route without a valid permit as required under Section 5 of the Land Customs Act and without any general or special permission of the Reserve Bank of India as required under the notification issued by the Government under Section 8(1) of the Foreign Exchange Regulation Act. He has also referred to Ext. B/4, the show cause notice to petitioner No. 2 in which also there is reference to such reasonable belief. Thus, it cannot be said that, It Section 178-A would apply to this case, if will not shift the burden of proof to the petitioners for proving that the gold was not smuggled.

10. But the more difficult question is whether the said presumption under Section 178-A would apply to the prosecutions under the Foreign Exchange Regulation Act and the Land Customs Act, But I am not entering Into a lengthy discussion on that question for the reason that the prosecution have let in evidence In the case to prove that the gold was smuggled and had not relied solely on the presumption. If they were relying solely on the presumption, it would have been somewhat difficult for them, as Section 23(A) of the Foreign Exchange Regulation Act and Section 9 of the Land Customs Act do not have the effect of Incorporating the provisions of the Sea Customs Act into the said enactments for the purpose of the prosecutions under the said enactments.

In that connection, I shall briefly refer to the same decision : AIR1962Mad85 , in which it has been held in dealing with this very question under Section 23(A) of the Foreign Exchange Regulation Act that where certain provisions of an Act are by means of a legal fiction, deemed to have been imposed under the provision of another Act and the structure of that Act Is thereby made applicable, it is an instance of referential legislation by means of a legal fiction and not of incorporation proper of one statute in another. I express my respectful agreement with the said observation. Thus, for a prosecution under Section 23 of the Foreign Exchange Regulation Act, the presumption under Section 178-A of the Sea Customs Act will not be available for the prosecution. Instead, the Government may decide to proceed under Section 167(8) and 167(81) of the Sea Customs Act instead of under Section 23 of the Foreign Exchange Regulation Act for violation of Section 8(1) of the latter Act. In such a case, Section 178-A of the Sea Customs Act will have to be applied.

11. When we come to the Land Customs Act, we find it stated in Section 9 that the provisions of the Sea Customs Act, specified in the schedule, so far as they are applicable, would apply for the purpose of the levy of duties of land customs under the said Act in like manner as they apply for the purpose of the levy of duties of customs on goods imported or exported by sea and that for the purpose of such application the said provisions may be construed with such alterations as may be necessary or proper to adapt them for the said purpose, but not so as otherwise to affect the substance thereof. Thus, certain provisions of the Sea Customs Act including Section 178-A which is also mentioned in the schedule have been made applicable for the particular purpose, of the levy of duties of land customs under the Land Customs Act. In the schedule are also included Sections 167(8) 167(81) and Section 187(A) which deal with the imposition of civil penalties and the prosecution In a Criminal Court for offences under the Sea Customs Act. The effect of Section 9 and of the schedule thereunder cannot be said to amount to an Incorporation of Sections 167(8), 167(81), 178-A and 187(A) of the Sea Customs Act into the Land Customs Act in order to shift the burden of proof in a prosecution under Section 7(1) to (3) of the Land Customs Act.

12. In my opinion, It enables the Government to proceed against a person for violation of Section 5 and Section 7(1) of the Land Customs Act under the appropriate provisions of the Sea Customs Act including the levy of penalty under Section 167(8) and Criminal Prosecution under Section 167(81) of the Sea Customs Act. If the Government does so, the presumption under Section 178(A) of the Sea Customs Act will, of course, be available to them. But it will not have the effect of shifting the burden of proof in a prosecution under Section 7(2) and (3) of the Land Customs Act.

13. I may also refer to The Imports and Exports (Control) Act, 1947 which also contains a penal provision. in Section 5 therein. Section 3(2) of the said Act states that the goods of which Import and export are prohibited or restricted under Section 3(1) of the Act, shall be deemed to be goods of which import and export have been prohibited or restricted under Section 19 of the Sea Customs Act and that all the provisions of the latter Act shall have effect accordingly. This will not amount to an Incorporation of the provisions of the Sea Customs Act Into the Imports and Exports (Control) Act, so as to shift the burden of proof in a prosecution under Section 5 of the latter Act, but will only permit prosecution under the Sea Customs Act for contravention of any order made or deemed to have been made under the Imports and Exports (Control) Act. However, there is no prosecution in this case under the Imports and Exports (Control) Act.

14. The provisions of enactments and particularly of penal enactments have to be strictly construed and particularly so when any such provisions relate to shifting the burden of proof to the accused. Thus, it would seem that for prosecutions under the Foreign Exchange Regulation Act and the Land Customs Act, independent of the prosecution under Section 167(81) of the Sea Customs Act, presumption in Section 178-A of the Sea Customs Act will not be available to the prosecution. This would even indicate that prosecutions under all the 3 enactments together in a single trial will not be proper, as the burden of proof for the prosecution under the Sea Customs Act will be different from the burden in the prosecutions under the Foreign Exchange Regulation Act and the Land Customs Act and a joint trial will therefore be highly prejudicial to the accused.

It seems to me that it Is for the Customs Authorities to make up their minds under which enactment they would proceed, when there are violations of the penal provisions of all the enactments. If they decide to proceed under Section 167(81) of the Sea Customs Act in a Criminal Court, it will not be proper for them to Join in the same prosecution, the offences under the other enactments, as it will prejudice the trial under the other enactments. The Legislature has made the provisions of the Sea Customs Act applicable to the violations of the penal provisions in the other enactments referred to above, in such a manner that three prosecutions can be launched under Section 167(81) of the Sea Customs Act for such violations. So, if the Customs authorities want to make use of Section 178-A of the Sea Customs Act, it will be better that they confine the prosecution to one under Section 167(81) of that Act.

15. I am aware of Section 26 of the General Clauses Act, 1897, which provides that where an act or omission constitutes an offence under two or more enactments, the offender shall be liable to be prosecuted and punished under either or any of those enactments, but shall not be liable to be punished twice for the same offence. This section, no doubt, provides for prosecution and punishment under either or any of the enactments. But, where the burden of proof differs In respect of prosecutions under the various enactments, it is clear that there cannot be Joinder of charges at a common trial, as It would be highly prejudicial to the accused. Illustrations (i), (j), 00, (I) given under Section 235(2), Cr.P.C. clearly show that such joinder of charges In a common trial can be only where the burden of proof lies on the prosecution.

16. Further, Section 26 of the General Clauses Act provides that the offender shall not be liable to be punished twice for the same offence. There has been no discussion by the lower Courts In their Judgments whether the offences with which they were charged under the 3 enactments were the same or whether they were distinct offences. Without such a finding, I fail to understand how the learned Additional District Magistrate imposed separate sentences for the charges under the 3 enactments and how he ordered the sentences to run consecutively in the face of Section 26 of the General Clauses Act. I do not also find from the judgment of the Sessions Judge any discussion about the particular offences said to have been proved against the two petitioners under the Foreign Exchange Regulation Act and the Land Customs Act, before he confirmed the convictions and sentences passed on the petitioners.

17. It is necessary therefore that I should deal with the charges brought against the petitioners and deal with the evidence in support of the charges.

18. The charges brought against both the petitioners are common charges. The charge against them under Section 23(1-A) of the Foreign Exchange Regulation Act is as follows:

That you on or about the 21st day of August, 1959 in violation of the restriction imposed by Section 8 (1) of the Foreign Exchange Regulation- Act and Ministry of Finance Notifications No. 12 (ii) F-1/48 dated 25th August, 1948 and No. 12 (ii) F-1/51 dated 27th February, 1951 brought in the State of Manipur (Union Territory of Manipur) more than 480 tolas of gold in 30 bars from outside India without any general or special permit.

19. The charge against them under Section 7 (3) or the Land Customs Act is as follows:

That you on or about the 21st day of August, 1959 in violation of Section 5 of the Land Customs Act (Act XIX of 1924) conveyed from foreign territory 480 tolas of foreign gold in 30 bars without valid permit into the territory of Manipur by a route other than the prescribed route.

20. There has been no discussion of the case separately against the two petitioners by either of the lower Courts. The appellate Court in the earlier part of Its judgment held on the strength of Section 178-A of the Sea Customs Act, that the burden of proving that the gold was not smuggled gold was on the petitioners. But in paragraph 63 of its judgment, it held that the help of Section 178A of the Sea Customs Act, cannot be taken into account in determining the guilt of the petitioners under Section 23 of the Foreign Exchange Regulation Act. There has been thus some confusion in the judgment of the Sessions Judge. But the Sessions Judge has not relied on the presumption under Section 178A of the Sea Customs Act, but has discussed the evidence on the side of the, prosecution to decide the question whether the seized gold was of Indian origin or of foreign origin. The Additional District Magistrate, has also discussed this question at length. Both the Courts have come to concurrent findings that the gold was of foreign origin and hence the gold must have been smuggled into India.

21. This finding was strongly attacked before me by Mr. Imo Singh, appearing for the petitioners. (After discussing the evidence, the judgment proceeded.) Thus the conclusion of the lower Courts that the gold was of foreign origin cannot be upset by me in revision.

22. But that does not solve the difficulty in the present case. The defence of petitioner No. 2 who admitted that the seized gold belonged to him was' that he did not know whether the gold was of Indian orign or foreign origin, but that he did not Import the gold

According to him, the said gold was with his father until his death in 1937 and after his death, the elder brother 01 petitioner. No. 2 had it until his death in 1947 and at the time of the latter's death, he told petitioner No. 2 that the gold was kept in a particular place in the house and that petitioner No. 2 took it out only two days before he gave to petitioner No. 1 at Churachandpur for being transported to Imphal. Mr. Imo Singh argued that it was not enough for the prosecution to prove that the gold was of foreign origin, but that the prosecution had further to prove that after Manipur became part of India in 1949 and the customs barrier came into operation, the said gold was imported from outside and that no attempt was made by the prosecution to prove the said fact, whereas the defence has examined one witness to prove that this gold was in the possession of petitioner No. 2 ever since 1947.

23. In that connection, Mr. Imo Singh also drew my attention to the decisions, Devichand Jestimali and Co., Bangalore v. Collector of Central Excise, Madras : AIR1960Mad281 and Sitaram Agarwalla v. Additional Collector 01 Customs, Calcutta : AIR1960Cal676 . Both those cases related to writ proceedings arising out of action taken by Customs Authorities under Section 167 (8) of the Sea Customs Act. In the Madras case, gold was seized from the shop and residence of a person at Vellore. The Madras High Court held that

to be in possession of gold, or to sell the gold, of to buy the gold, once the process of importation, assuming the importation is unlawful, is completed, and independently of the series of acts connected with such importation will not fall within the terms of Section 167 of item 8 of the Sea Customs Act and that mere possession of gold which has been unlawfully imported into India cannot be dealt with thereunder and that it must be shown that the persons must have actually committee the offence of importation or have been accessories to It either before the fact or after the fact.

In the Calcutta Case a person was arrested while attempting to buy smuggled gold and it was held that unless the Customs Authorities showed that the person has taken any part in the importation of the gold, they cannot penalise such person under Section 167(8) of the Sea Customs Act. from this, it was argued that merely being found in possession of contraband gold miles away from the border between Manipur and a foreign country, it cannot be said that the person found in possession of the gold or the owner of the gold had imported gold from outside India. My attention was also drawn to the evidence of P.W. 1 who, said that Churachandpur was about 50 miles from the border of Burma and that Imphal wherefrom the petitioner No. 1 was arrested with the gold was fur her '38 miles away from Churachandpur and it was argued that the prosecution cannot be said to have proved that this gold was imported from outside,

24. In my opinion, this is taking too narrow a view of Section 8 of the Foreign Exchange Regulation Act, 1947 and the notifications issued by the Government under the said section. What Section 8 of the said Act and the, notifications restrict is that no person shall bring into the States from any place outside India gold except with the general or special permission of the Reserve Bank Section 178 of the Sea. Customs Act which has been made applicable by Section 23-A of the Foreign Fxchange Regulation Act, permits the seizure of gold in any place in India by a customs officer. Section 24 of the Foreign Exchange Regulation Act, further provides that where any person is prosecuted for Contravening any provisions 01 the said Act or any order made thereunder which prohibits him from doing an act without permission, the Burden of proving that he had the requisite permission, shall be on him. Thus, reading Section 8 and the notification thereunder and Section 24 of the Foreign Exchange Regulation Act, and Section 178 of the Sea Customs Act together, it is clear that they would apply to any gold seized anywhere inside India.

25. The two cases cited for the petitioners deal with Section 167 (8) of the Sea Customs Act and we are not concerned with that Act in the present case. Here, we are concerned with the Foreign Exchange Regulation Act. The question is whether the petitioners brought the gold into any place in India from outside. Their plea was that neither of them Imported the gold from outside. We are dealing with a case where the gold is seized Inside one of the border States. When the gold itself is seen to be of foreign origin, and it is found that attempt had been made to obliterate the foreign markings and the gold was carried in a clandestine manner, it is for the person concerned to explain how he happened to be in possession of that gold.

26. In that connection, the Sessions Judge has referred to Section 106 of the Evidence Act which states that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. Illustration (b) to that section Is particularly relevant in our present case. It states that when A is charged with travelling on a railway without a ticket, the burden of proving that he had a ticket is on him. Section 114 of the Evidence Act and illustration (a) thereunder will also apply by analogy to the present case and the Court must have regard to the common course of natural events and to human conduct to decide whether the gold was imported from outside.

Here the petitioner No. 1 was found In possession of foreign gold in suspicious circumstances, without the general or special permit required for its importation into the border State of Manipur and petitioner No. 1 was found travelling to the interior from the direction of the border. Admittedly, the petitioners did not have any special or general permit as required. Under such circumstances, the presumption under Section 114 Evidence Act will apply apart from the presumption under Section 178 (A) of the Sea Customs Act and the Court will have to conclude that the foreign gold was imported from outside India, unless the petitioners rebut the presumption, by proving under Section 106 Evidence Act the special fact within their knowledge, namely, how they came into possession of the gold.

27. Petitioner No. 1 gave the explanation that he did not Import the gold and that petitioner No. 2 handed it over to him at Churachandpur for being carried to Imphal. Petitioner No. 2 admitted the fact and on the strength of such admission petitioner No. 2 was also prosecuted. Petitioner No. 2 gave the explanation that the gold has been with him ever since 1947 in Manipur and that he did not import the gold Inside India after the Customs barrier came into operation in Manipur in 1949. Thus, the question really is whether the explanation of petitioner No, 2 can be accepted or not. If that explanation is accepted, then the gold can be accepted as not Imported gold. It is a matter within the special knowledge of the petitioner No. 2 and if he Is not able to prove that the said gold has been with him since 1947, then the conclusion is irresistible that the (told was Imported into India from outside between 1950 and 1959.

28. In the decision Amba Lal v. Union of India AIR 1961 SC 264, which was relied on for the petitioners, gold bars were recovered from a person In 1951 and the defence was that the recovered gold had been brought by him from Pakistan in the year 1947, before the Customs barrier against Pakistan came to exist in 1948 and there was no evidence that they were brought into india after 1948. There was also no evidence to show that It was foreign gold or gold produced in Pakistan after 1948. Under those circumstances, the Supreme Court held that the onus to prove that the gold was brought into India after 1948 was on the Customs Authorities and that Section 106 of the Evidence Act will not apply. But In our present case, the Customs barrier cams In existence ln 1950 and the seizure took place in 1959. The gold was also seized when being brought from the direction of the border into Imphal. So, the burden is on petitioner No. 2 to prove that the gold has been in his possession inside India even before the Customs barrier came to exist.

29. The lower Courts have dealt with the evidence of D.W. 1 in detail. I have also perused the said evidence and in my opinion the lower Courts were right in rejecting the said evidence. The witness was the brother-in-law of petitioner No. 2 and naturally he gave interested evidence. Petitioner No. 2 in his first statement Ext. A/20 given to the Customs Authorities stated that nobody was present when his brother gave the gold to him in 1947. This clearly shows that D.W. 1 cannot have known of it. Hence his evidence of being present at the time when the elder brother gave it to petitioner No. 1 was rightly rejected by the lower Court. Petitioner No. 2 had to prove that his father had the gold and that after his father's death, his elder brother had the gold, that his elder brother himself died before 1950 and that he himself came Into possession of the gold before 1950. He has not proved any of those things. So, the conclusion was Irresistible that the foreign gold was brought into the border State after the Customs barrier came into operation in 1950 and the gold has to be accepted as smuggled gold.

30. The next question that falls to be decided from this finding that the gold was smuggled gold and that It was brought into India from outside is which of the petitioners can be held liable under Section 23 (1A) of the foreign Exchange Regulation Act. This question has not been discussed by either of the lower Courts. Regarding the guilt of petitioner No. 2, there can be hardly any doubt. He admitted that the gold belonged to him and that he handed it over to petitioner No. 1 at Churachandpur for being taken to Imphal. Thus, It Is clear that it was petitioner No. 2 who imported the gold from outside and his conviction under Section 23 (1A) of the foreign Exchange Regulation Act, has to be upheld.

31. But can petitioner 1 be held guilty under that charge? I am sorry that this question has not been dis-cussed by either of the lower Courts as they ought to have done. As soon as petitioner No. 1 was arrested with the gold, he told the Customs Authorities that he did not know that the gold was Imported or not and that he was carrying it for petitioner No. 2 who handed it over to him at Churachandpur and that the gold belonged to petitioner No. 2. This was accepted by the Customs Authorities and so petitioner No. 2 was arrested and petitioner No. 2 also admitted the ownership of the gold. For that reason a penalty of Rs. 25,000/- was Imposed on petitioner No. 2 under Section 167 (8) of the Sea Customs Act. whereas petitioner No. 1 was assessed only a penalty of Rs. 5,000/- though the gold was actually seized from him.

Thus, the Customs Authorities have acted on the basis that petitioner No. 2 was really the guilty person In importing the gold and that petitioner No. 1 only carried the gold from Churachandpur to Imphal. Thus, we have to accept that petitioner No. 1 had no hand in bringing the gold into Manipur from outside India. The gravamen of the charge under Section 23 (1A) of the Foreign Exchange Regulation Act is the importation of gold into Manipur from outside India. When petitioner No. 1 had no hand in any such importation, but only carried the gold from Churachandpur to Imphal, it was wrong to have held him guilty under Section 23(1A). The two decisions : AIR1960Cal676 are quite relevant in that connection and it cannot be said either that petitioner No. 1 had any hand in the import of the gold or abetted the import of the gold or received' it immediatedly after the Import, the receipt being the final step in the process of importation. Thus, the conviction of petitioner No. 1 under Section 23 (1A) of the Foreign Exchange Regulation Act, has to be set aside.

32. Now I shall deal with the charge under Section 7 of the Land Customs Act. A preliminary objection was raised by Mr. Imo Singh, in respect of this charge. His contention was that under Section 7 (2) of the Land Customs Act, the Land Customs Officer, must be of opinion that the offence under Section 7 (1) in respect of gold has been committed and that the penalty provided thereunder was inadequate and that only in such a case he can file a complaint to the Magistrate. He pointed out that in the cross-examination of P.W. 5, the Assistant Collector of Customs, who filed the complaint, he stated that, he was not to decide if the award by the Collector was sufficient or not and that he had no discretion in the matter and that he cannot say if he had discretion under the law to refuse to file the complaint when direction from the Collector was received. It was the Collector of Land Customs who had authorised the Assistant Collector, to file the complaint and accordingly P.W. 5 had filed the complaint.

Such authorisation was necessary for filing the complaint for the more serious offences under Section 167 (81) of the Sea Customs Act and Section 23 (1A) of the Foreign Exchange Regulation Act. But, for the lesser offence under Section 7 of the Land Customs Act the Land Customs Officer is himself entitled to file the complaint without any authorisation. Such authorisation for the more serious offences is prescribed under the law to see that the prosecution should be started only If the higher authorities found that the civil penalty provided was not adequate. Since the offence under Section 7 of the Land Customs Act is less serious, it is provided that the Land Customs Officer can himself decide whether the civil penalty prescribed under Section 7 (1) was adequate or not. Thus, when the Collector of Customs, who has to authorise the prosecution for the more serious offences has himself decided that there should be prosecution for the more serious offences, the Land Customs Officer has certainly to accept his superior Officer's decision in the matter and there is nothing wrong in his filing the complaint under Section 7 (2). In the complaint itself. It is mentioned by the Land Customs Officer (P.W. 5) that the civil penalty was considered not sufficient, Under the circumstances, this objection to the prosecution under the Land Customs Act does not appear to me to be a valid one.

33. Now the question is whether the charge has been made out against the two petitioners. As far as petitioner No. 2 is concerned, it has already been established that as the owner of the gold he imported it into India from foreign territory. Gold is a dutiable article under the first schedule to the Indian Tariff- Act, 193. It was necessary therefore for petitioner No. 2 to have applied for a permit under Section 5 (1) of the Land Customs Act for the passage of the gold from the foreign territory into India to the Land Customs Officers, adjoining the foreign frontier across which the goods were to pass. No such permit was applied for in the present case. Again, as spoken to by P.W. 1, a special route has been prescribed for the passage of dutiable goods from Burma through Manipur and this route was the Tamuimphal route. The gold in question was attempted to be brought to lmphal through the Churachandpur Kwakeithal route in the Tiddim road, which Is not the prescribed route. Hence, petitioner No. 2 in bringing the gold Into India without a permit and In handing over the gold to petitioner No. 1 at Churachandpur for carrying this gold to Imphal along the Tiddim Road was clearly guilty of the offence under Section 7 (1)(a) and (b) of the Land Customs Act.

34. Petitioner No. 1 is also guilty of the offence tinder Section 7 (1)(b) as he actually carried the gold along the non-prescribed route. He cannot be held guilty of conveying or attempting to convey the gold from any toreign territory like petitioner No. 2. He is guilty of conveying the gold from Churachandpur along a non-prescribed route. It may be said that he was not aware that the gold was smuggled gold, but still he will be guilty under Section 7 (1)(b) as gold.Is a dutiable article and can be brought from a Land Customs Station only through the prescribed route.

35. The learned Sessions Judge does not appear to have understood the charge under Section 7 of the Land Customs Act and he has stated in paragraph 59 of his Judgment that the offence under Section 7 (1) of the Land Customs Act consists in keeping or concealing goods knowing that Such goods have been passed or conveyed from any foreign territory. He failed to see that there was no charge under Section 7 (1)(c), but only under Section 7 (1)(a) and (b). His confirmation of the conviction was therefore wrong. The Additional District Magistrate has correctly convicted both the petitioners under Section 7 (1)(a) and (b) under which the charge was brought. But, as I have pointed out, petitioner No. 2 is guilty under Section 7 (1)(a) and (b), while petitioner No. 1 is guilty only under Section 7 (1)(b).

36. Now I come to the question of punishment. The punishment given to petitioner No. 1 under the Foreign Exchange Regulation Act has to be set aside, as I have already acquitted him of the charge brought under Section 23 (1A)(a) of the said Act. As for petitioner No. 2, it has to be kept in mind that his conviction is under Section 23 (1A)(a) which provides for punishment with imprisonment which may extend to two years, or with fine, or both. Section 23(IB) also provides for confiscation of the gold by the convicting Court. But, In this case, the confiscation has been made under Section 167(8) of the Sea Customs Act, the provisions of which had been made applicable to the Foreign Exchange Regulation Act by Section 23-A of the latter Act, which was added by a subsequent amendment in 1952.

Thus,, when a Court decides to impose a punishment under Section 23(1-A)(a), it has to take into account in deciding the punishment, the penalties imposed on petitioner No. 2 under the Sea Customs Act. if there has been very severe penalty imposed under Section 167 of the Sea Customs Act, the punishment to be imposed by the Court under Section 23 (1A)(a) must be less than what it would have been, if there had been no such penalty. The petitioner No. 2 has been given a penalty of Bs. 25,000/- under Section 167 (8) of the Sea Customs Act and there has also been confiscation of the gold. Under the circumstances, the sentences of 16 months' R.I. Imposed by the A.D.M. appears to be a very severe one. A sentence of 6 months' R.I. will meet the ends of Justice.

37. Mr. fmo Singh however stressed before me the provision of Section 3 of the Probation of Offenders Act and pointed out that as the offence in this case was punishable with imprisonment for not more than 2 years and no previous conviction was proved against petitioner Mo. 2, the Court has power to release him after admonition. But 1 do not think that this is a case where-Section 3 of the Probation of Offenders Act can be applied. We have to take into account the circumstances of the case including the nature of the offences. The A.D.M. has himself pointed out the seriousness of the offence. Manipur is a border State, such, attempts at smuggling gold end other dutiable goods are quite common and punishment of imprisonment has, therefore, got to be given and it is not possible to release petitioner No. 2 after, admonition. He is, therefore, sentenced to six months R.I. in modification of the sentence imposed by the lower Courts for the conviction under Section 23 (1A)(a) (sic) Exchange Regulation Act.

38. With regard to the conviction under the Land. Customs Act, the punishment imposed on petitioner No. 2. is 4 months' R. I. His offence under Section 7(1)(a) and (b) is not the same as his offence under Section 23 (1A)(a) of the Foreign Exchange Regulation Act and so he can be separately punished for it, under Section 26 of the General Clauses Act. The maximum penalty which could-be levied under Section 7 (1) of the Land Customs Act-is Rs. 1,000/- and the prosecution under Section 7 (2; Is to be undertaken where the said penalty is considered' to be inadequate. But in this case, penalty has been imposed not under Section 7 (1): of the Land Customs Act,, but under Section 167(8) of the Sea Customs Act and as-the penalty is Rs. 25,000/- it seems to me that the sentence of 4 months' R.I. is too severe and has to be reduced to one month's R.I. for petitioner No. 2. The said' sentence will run concurrently, with the sentence of six months' R.I. imposed under the Foreign Exchange Regulation Act.

39. As for petitioner No. 1, we have to take into-account the fact that a penalty of Rs. 5,000/- under Section 167 (8) of the Sea Customs Act has been imposed on him and further that he was not guilty of importing the gold from a foreign territory into India, but only of transporting the gold through a- non-prescribed route, probably without knowing that the gold was smuggled gold. He was related to petitioner No. 2 and he was obliging-petitioner No. 2 by carrying the said gold for him. It has also to be taken into account that petitioner No. 1 is a military Officer on the verge of retirement. Under all these circumstances I think it is a fit case where Section 3 of the Probation of Offenders Act can be applied his case and no sentence of imprisonment or fine seems to be necessary. He is therefore directed to be release* after due admonition;

40. In the result, the conviction and sentence of petitioner No. 1 Neithanga Hmar under Section 23 (1A)(a) of the Foreign Exchange Regulation Act, 1947 are set aside and his conviction under Section 7 of the Land Customs Act is confirmed and he is released after admonition, under Section 3 of the Probation of Offenders Act. The convictions and sentences of petitioner No. 2 Zaphira Hmar are confirmed but in modification of the sentence imposed by the lower Courts, he is sentenced to six month's R.I. under Section 23(1-A)(a) of the Foreign Exchange Regulation Act and to one month's R.I. under Section 7 of the Land Customs Act, the sentences to run concurrently.


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