1. These proceedings, in pursuance to a reference having been made to me by the President under Section 129(5) of the Customs Act, 1962, are being recorded in file of Appeal No. GC(DEL)(T) 1/80-NRB in view of the fact that the orders recorded separately by the two learned Members of the North Regional Bench have been put in the said file and so arc the points of difference drawn up by them. However, the discussion herein would cover all the five appeals captioned above.
2. Facts giving rise to adjudication proceedings against these five appellants have been summarised in tabular form by the learned Judicial Member of the NRB, as then constituted, and I do not think, they require any reproduction. It would suffice for the purpose of having proper perspective of the points referred for third Member opinion, that one Bhagirath, a resident of Sri Ganga Nagar, appellant in Appeal No. 9/80 was intercepted while travelling in a bus on 4.3.1975 at about 10.30 a.m., near a place known as Daulatpur, on Ganganagar Abohar Road.
On search, of his person, 9 pieces of gold found subsequently to be of 23.5 carat purity and weighing 1220 grams, were recovered, which were seized by the Customs Preventive Officer, Abohar.
3. As a sequel to this recovery, Bhagirath was arrested and his statement recorded the same day, wherein he admitted the recovery of gold pieces from him, (9 in number) described to be in biscuit form, and also the fact that they were recovered from a cloth bag tied around his waist. He also mentioned that this gold had been handed over to him by two persons of Bikaner named Laxmi Narain and Sat Narain, and that they had sent him to Abchar for getting die cutting work done and that one Khetu Ram was also travelling in the same bus, but added that said Khetu Ram had no connection with this gold. He further revealed that biscuits recovered from him, had been prepared after melting foreign gold biscuits (999). He also gave out that he was a certified goldsmith and that he was maintaining goldsmith entry book, which could be found at his house, but the gold recovered from him was not entered therein.
4. While Bhagirath was in judicial custody, another statement was recorded by another Fnspector of Customs on 6.3.1975 in which he reiterated that the gold had been handed over to him by Sat Narain and Laxmi Narain of Napasar near Bikaner although he came cut with another name at whose shop they had avowdly me! and that said Ram Ratan had along with Sat Narain handed over the nine biscuits of gold weighing 1220 gms., instructing him to take it to Abohar for delivery to one Ram Rattan there. He implicated Khetu Ram also by attributing to him, participation in the act of entrustment of the gold to him, for carriage, by stating that it was Khetu Ram who had tied the gold biscuits around his waist, and was travelling with him as an escort.
5. As a follow-upaction, statement of the persons, named by Bhagirath, namely Sat Narain and Laxmi Narain, appellants in Appeal No. GC (DEL)(T) 1/80-NRB and Appeal No. GC (DEL)(T) 6/80-NRB, respectively, were recorded on 9.3.1975, both of whom are residents of Napasar district Bikaner and who admitted having taken 1220 gms. of gold in nine pieces, and having handed over the same to Bhagirath on the morning of 4.3.1975, with instructions to him to take the same to Abohar for die cutting work, adding that this gold had been given to them by Han Ram and Goverdban, goldsmiths of Napasar (appellants in Appeal Nos. GC (DEL)(T) 2/80-NRB and GC(DEL)(T) 7/80-NRB, respectively).
6. Whereas statements of Laxrai Narain and Sat Narain wera recorded on 9.3.1975, those of Hari Ram and Goverdhan were recorded on 10.3.75 and these last two persons admitted that they were goldsmiths and that they had sent Laxmi Narain and Sat Narain the latter being brother of Hari Ram, and the former namely; Laxmi Narain, being related to Bhagirath.
The explanation offered by Hari Ram and Goverdhan in the statements recorded on 10.3.1975 were to the effect that some different persons had entrusted old ornaments to them for conversion into new ornaments of given specifications and that they were duty entered in their registers maintained in Form G.S. 13 and that the gold recovered from Bhagirath was the gold prepared in different bars after melting the old ornaments. Hari Ram however added that apart from the customers, his own grandfather, named Ladha Ram, had also given him old ornaments weighing about 350 gms. for preparation of new ornaments on the occasion of his grandson's marriage. Statements of all the persons named as customers were also recorded the same day who corroborated the version of Hari Ram and Goverdhan.
7. The investigation was followed by Show Cause Notice dated 18.8.1975 issued by Collector of Central Excise and Customs, Chandigarh, whereby 13 persons were called upon to show cause as to why the gold recovered from Bhagirath be not confiscated under the provisions of Section 71 of the Gold (Control) Act, 1968 (hereinafter called the Act, adding that Bhagirath, Khetu Ram, Sat Narain, Laxmi Narain, Goverdhan and Hari Ram had contravened the provisions of Section 8(1) of the Act and has thus rendered the gold liable to confiscation, besides penal action against these persons, as contemplated under Section 74 of the Act.
8. After the Collector had confirmed the show cause notice and imposed penalties of varying amount, an appeal was carried to the Gold Control Administrator who came to the finding after consideration of the entire material on record that gold recovered from Bhagirath had not been connected with the persons, whose names were entered in the account books of Goverdban and Hari Ram represented to be customers, having handed over different quantities of gold in the shape of ornaments.
Consequently, notice against six persons, alleged to be customers was withdrawn. Similarly he found that Ram Rattan and Khetu Ram could not be held as connected with gold, and penalties imposed upon them were set aside, whereas the order of confiscation of gold and imposition of penalties against the five persons (appellants herein) was confirmed although the penalty amount was reduced to the extent of Rs, 30,000/- against Goverdhan and Hari Ram each, as against of Rs. 50,000/- imposed by the Collector, whereas the amount of penalty in the case of Laxmi Narain, Sat Narain and Bhagirath was reduced to Rs. 15,000/- each, against that of Rs. one lakh each, as imposed by the Collector.
9. Revision Petitions under the provisions of Section 82(1) of the Act were separately filed, by these five persons, against this order which were received by transfer, pursuant to the provisions of Section 82K of the Act, to the Tribunal, to be heaid and disposed of as appeals, and these were accordingly registered as such, and heard by the North Regional Bench, then constituted by learned Judicial Member Shri M.Gouri Shanlcar Murthy, and learned Technical Member, Shri A.J.F.D'Souza.
10. After hearing, the learned Member (J) recorded an order holding that on a cumulative consideration of all the circumstances which he summed up in para 5 of his order dated 31st May, 1983, the order appealed could not be sustained, and accordingly the appeals were entitled to be allowed, and that whereas penalties imposed were to be set aside; the gold had to be returned to the owners through Bhagirath, appellant in Appeal No. 9/80, from whose possession it was seized, and other appellants, who have made appropriate entries in their registers.
However, the learned Member (T) did not find himself in agreement with the view taken by the learned Member (J), and recorded separate order on 28.10.1983.
11. It is observed that two learned Members do not seem to have met to discuss the points of difference as appears to be requisite procedure, contemplated by Section 129C(5) of the Customs Act and consequently, no points of difference which could commonly emerge, are there for reference.
12. As a result, what has come to me by way of Third Member reference are the points drawn up separately by the two learned Members on a reading of each other's orders. The points made by the learned Judicial Member who had recorded the main order are as under: (a) The probative value of mutually conflicting and retracted confessions of Shri Bhagirath, one of the five appellants made after arrest and while in custody; (b) the effect of the entries in the G.S. 13 Registers of Goverdhan (Appellant in Appeal No. 7/80) and Hari Ram (Appellant in Appeal No. 2/80) duly countersigned by an Inspector of Central Excise on 3.3.1975 (a day prior to the arrest of Bhagirath) as well as the G.S. 13 Register of Bhagirath himself); (c) the applicability of Sections 42, 43 read with Sections 37, 71 and 79 of the Gold (Control) Act, to the facts of the five appeals, and their scope and effect.
13. The points made by learned Member (Technical) are contained in his note dated 19.11.1983 and are tabulated as below: (1) Member (J) has written his order not with reference to the person from whom the primary gold was actually seized, namely, Shri Bhagirath, but Shri Sat Narain, a mere intermediary.
(2) Sufficient weight has not been given to the averments of the Departmental Representative as set out in para 4 of my note.
(3) A judicial and not quasi judicial view of the offence has been taken not giving attention to the fact that parallel proceedings under the Customs Act and the Gold Control Act were instituted and the legal requirements and consequences in the two statutes are dissimilar specially since mere possession of primary gold beyond the specified limit as explained in para 6 of my note, is sufficient to attract confiscation and penalties under the latter Act.
(4) The presumed issues raised by Brother Gauri Shankar, may also be taken as points of difference.
(5) It may be submitted that if the case could not be discussed, it was only due to pressure of work and non-ability to meet rather then any other reason.
14. On the reference being received by me, notice of the same was sent to the counsel representing appellants in all these cases; they being, Shri Tirlok Kumar, Advocate for appellant Shri Bhagirath and Shri K.R.Mehta, Consultant for 4 others, as also to the respondent along with copies of the two orders recorded separately by the two learned Members and the points of difference made by them.
15. At the hearing, both the counsel for the appellants appeared whereas respondent was represented by Shri Rakesh Bhatia, SDR. They having been made aware of the necessity for this third member hearing, by means of the copies of the orders, and the points of difference supplied to them, Shri Tirlok Kumar, Advocate who commenced arguments, first of all, on behalf of the appellant Sh. Bhagirath, straightaway came to the points made by the learned Member (T), with reference to the order recorded by the learned Member (J) dated 29.10.1983. He submitted that the points made by the learned Member (T), to the effect that the order ought to have been written on the file of Bhagirath from whom the gold was seized and on the file of Sat Narain, was only a matter of procedure and nothing turns on that As regards second point, to the effect that the arguments, addressed by the Departmental Representative, had not been taken into account by the learned Member (J) the learned Counsel stated, that this was perhaps based on a misconception, because the order under reference; namely, one recorded on 31.5.1983, reveals that all the facts brought into focus by both the sides had been taken into account. He made a detailed comparative reading from the two orders to bring home the fact that all arguments and contentions, are reflected in the order recorded by the learned Member (J).
16. The learned Counsel, however, argued in detail with reference to point No. 3, which throws up a question of law; namely, as to what type of burden of proof was required in such like cases, and contended that it was a settled proposition by now that these adjudication proceedings are quasi-criminal in nature inasmuch as they attract penal consequences, such as confiscation as well as penalty and that the same standard of proof as in criminal trials, was expected from the Department to be discharged before the person proceeded against could be held liable to action under different provisions of the Act. Shri Tirlok Kumar placed reliance in support of his plea on AIR 1961 SC 264.
In case Amba Lal v. Union of India of Ors. N.G. Roy v. Union of India and Ors. and AIR 1971 Tripura 3 Amulya Chandra Paul v. The Collector of Central Excise and Land Customs far Assam, Manipur and Tripura and Ors.. He built up his arguments based on these authorities that the principle of criminal jurisprudence can apply in these proceedings, with the result that standard of proof would be that of beyond all reasonable doubt, and as against that the respondents were not expected to establish their defence with positive proof or evidence.
17. Shri Tirlok Kumar further added that even though the views proposed by the learned Member (T) were to be accepted ; namely that of preponderance of probabilities, in the present case even that could not be said to have been satisfied inasmuch as the entire case is built around two statements of Bhagirath, which are self-contradictory, and apart from the fact, they are not voluntary having been recorded while Bhagirath was in custody, and he being an illiterate person could not be assumed to be the author of whatever is recorded therein, and that these statements have no evidentiary value, as has been found by the Central Board of Excise A Customs in an appeal relating to proceedings under the Customs Act, based on the same seizure, and even in the present proceedings, reliance has not been wholly placed on these statements inasmuch as Khetu Ram and Ram Rattan implicated by Bhagirath in the second statement have been exonerated fully, and so were the customers.
18. He further stressed that the learned Member (J) has been right in taking into account the entries made in G.S. 13 registers of Goverdhan and Hari Ram, who were certified goldsmiths, because the entries therein bear signatures of an Inspector of Central Excise, as late as on 3.3.1975, in token of having conducted a check of the shops, and the records maintained therein, and so an inference that they were fabricated subsequently could not be drawn in this case, and that even in Bhagirath's case, observation that the entries are manipulated are not justified, inasmuch as there was same factual error in the orders of the lower authorities, in observing that the register was produced after a year, even when the show cause notice, issued within six months of the seizure, specifically mentions that G.S. 13 Register of Bhagirath had also been resumed.
19. He added that once it could be held to have been proved satisfactorily that these entries in the register were genuine, then the gold obviously belongs to different persons, in different quantities, who could not be held to be guilty of being party to any contravention of the provisions of the Act, so as to attribute to them abetment or connivance; for the offence of contravention of the provisions of the Gold (Control) Act by the goldsmiths, to whom they had entrusted the gold for preparing new ornaments, and as such proviso to Section 71 of the Act was attracted and gold could not be held liable to confiscation. He also pleaded that the order of penalty against the appellants was also not justified inasmuch as three of them uamely Bhagirath, Goverdhan and Hari Ram were certified goldsmiths and no notice was given to them to show cause with reference to the provisions of Section 42 which has not been invoked against them and that the provisions cited in the show cause notice, namely Section 8, was not applicable to them and as such they had no opportunity of explaining the charge against them, and that the other two persons, namely, Laxmi Narain and Sat Narain were mere emmissaries and protected under the provisions of Section 37 of the Act.
20. Shri K.R. Mehta adopted arguments of Shri Tirlok Kumar, Advocate, adding that goldsmiths were not obliged to take gold personally, and could use other persons, and as such none of the appellants can be held guilty of contravention of any of the provisions of the Act.
21. Shri Rakesh Bhatia, SDR, supported the order of the lower authorities by pointing out that the version of the appellants has been rightly disbelieved inasmuch as gold recovered from fihagirath has been rightly held to be not connected with the gold ornaments entered in the G.S. 13 Registers of Hari Ram and Goverdhan, even if these registers were held to be regularly maintained and the entries were considered to be genuine. He furnished a typed copy of the weightment memo as well as copies of the replies given to the show cause notice, requisitioned from him, and also gave details of the Inspectors who had recorded statements of Bhagirath but could not say from the records made available to him as to whether these officers had recorded any memo of proceedings of various steps in investigation or not. He also stated that the record with him did not indicate as to whether criminal proceedings were also initiated against these persons or not, on the basis of this recovery.
22. After the arguments were concluded and after going through these points, need for some further clarification was felt and another hearing was held in which Shri K.R. Mehta, Consultant appeared on behalf of all the appellants as Shri Tirlok Kumar, Advocate, could not appear as he was reportedly out of station. Shri Mehta had not much comments to make when he was asked whether Section 8 of the Act would also be attracted or not to goldsmiths. Shri Rakesh Bhatia, SDR, had nothing to add to his previous submissions.
23. I have given my very earnest thought to the contentions canvassed before me, with reference to the points of reference drawn by the two learned Members. After careful consideration, I feel that point (a) of note dated 29.10.1983, recorded by learned Member (J), and point No.(3) of the note dated 19.11.1983, recorded by the learned Member (T) are required to be taken up first, and could be dealt with together as they basically raise the same issue.
24. As a proposition of law, the answer has been supplied by the Supreme Court in a number of cases arising out of adjudication proceedings under the Sea Customs Act, 1878, as well as proceedings under the Foreign Exchange Regulations Act, Import Export Order, etc., which are legislation of the same genre.
25. The view as called from judicial authorities is that these proceedings which entail penal consequences have to be considered as of quasi-criminal nature, and normally speaking, same standard of proof as in criminal trials, obliging the prosecution to prove guilt of an accused beyond all reasonable doubt would be expected but. a rider, has been placed; namely that if a particular statute contains any provision altering normal course of onus of proof, then an exception to the generally accepted principles of criminal jurisprudence is carved out, but here again they have given guidelines holding that whereas the standard required of the prosecution or the Department would be that of strict proof, the defence could be established by showing preponderance of probabilities as in civil proceedings, and need not be by strict proof, except for the fact that where there are some special facts within the knowledge of the respondents to the proceedings then principles of Section 106 of the Evidence Act would apply and those facts may have to be established by the persons setting up the defence.
26. These principles have been very lucidly streamlined in a judgment of the Supreme Court reported as Collector of Customs, Madras and Ors.
v. D. Bhoormul proceedings under Clause 8 of Section 167 of the Sea Custom? Act It was held that in proceedings to which Section 178 A of the said Act does not apply, the burden of proving that the goods are smuggled goods is on the Department. This was considered to be a fundamental rule relating to proof in all criminal as well as quasi-criminal proceedings where there is no statutory provision to the contrary. Their Lordships, however, clarified that the scope of this burden of proof has to be appropriately appreciated by paying due regard to kindred principles, which were also no less fundamental, and of universal application; one of them being that prosecution or the Department, is not required to prove its case with mathematical precision to a demonstrable degree, for "in all human affairs absolute certainty is a myth", and that (quoting Brett): "all exactness is a fake", and that "Eldorado of absolute proof being unattainable, the law accepts for it probability as a working substitute in this work-a-day world". Thus, "law does not require the prosecution to prove the impossible and that all that it requires is the establishment of such a degree of probability that a prudent man may on its basis believe them in the existence of the fact in issue. Their Lordships added that, "legal proof was not necessarily perfect proof." 27. Another guiding principle brought into focus in this case which has an important bearing on the incidence of burden of proof, was regarding sufficiency and weight of the evidence in situations where, "it was in the power of one side to prove, and in the power of other to have contradicted".
28. The principles set out in this authority were on the basis of another Supreme Court authority reported as in case M/s Kanungo and Co. v. Collector of Customs. In the latter case, it was held that the burden of proof placed by Section 167(8) of the Sea Customs Act on the Customs authority was discharged among other things by falsifying many particulars of the story put forward by the persons concerned and it was held that a false denial could be relied on for concluding that the goods had been illegally imported.
29. It can thus safely be said on the basis of the aforesaid Supreme Court authorities that in the absence of any statutory provision to the contrary, burden of proving a charge is on department but in case there is any such legislative provision shifting the burden of proof on given facts being established, to the person concerned, then the general rules of criminal jurisprudence to which the learned Counsel in these appeals repeatedly referred get diluted.
30. It is to be seen that the Gold (Control) Act, with which we are dealing in these appeals, contains such provisions as contemplated in the above quoted authorities, relieving the department of discharging the burden up to the end, once the preliminary and basic situation is established. For, in terms of Section 99 of the Act, which reads as follows: 99. Presumptions as to ownership of gold-Any person who has in his possession, custody or control any primary gold, article or ornament shall be presumed, unless the contrary is proved, to be the owner thereof.
a person once found in possession, custody, or control of any primary gold is to be presumed owner thereof.
31. Even as regards criminal trials under this Act, there is a provision contained in Section 98B raising presumption of culpable mental state, which almost revolutionises the concept of criminal jurisprudence, raising a presumption of innocence in favour of the accused It is to be noted that such type of provisions exist in almost all legislations, dealing with socio- economic offences. We have a similar provision in the form of Sections 123 and 138A of Customs Act, 1962. It was incorporated in 1955 in the Sea Customs Act, in the shape of Section 178A. Even the Prevention of Corruption, Act, which envisages criminal trials by special courts, postulates a statutory presumption against the accused by means of Section 4 of the said Act.
32. The Authorities cited for the appellants, namely in Ambalal's case (supra) have to be appreciated in this context and it is to be noted that it was specifically held in that case that Section 178A was not applicable and it was only in that situation that their Lordships of the Supreme Court held that the burden lay on the department to establish the guilt of the respondent therein. That authority, therefore, cannot be pressed into aid by the present appellants.
Similarly in other cases relied upon, namely AIR 1951 Calcutta 524 M.C.Mitra v. The State AIR 1971 Tripura 3 (Supra) also, Section 178A of the Sea Customs Act, did not come up for discussion, and wag not apparently applicable to facts of those cases.
33. Similar emphasis it discernible in another Supreme Court Authority : Gian Chand and Ors. v. State of Punjab 1984 ECR 105 ratio of which is also to the effect, that in the absence of any statutory provision, shifting the onus of establishing some ingredients of an offence, to the accused, implying thereby, that in case there was any such provision, then the burden of proof after establishing the initial facts stands discharged so far as the department is concerned and then that of establishing innocence passes on to the respondent in the proceedings.
34. In another case reported as , Collector of Customs v. Puran Singh and Ors. Section 178A of the Sea Customs Act was held to be valid and constitutional and the principle that once the goods are seized, the burden of establishing that they were not smuggled goods passes on to the accused, was enunciated and the same view was reiterated in another case reported as Pukhraj v.35. Keeping in mind, the principles laid down in these authorities, it is thus clear that once possession, custody or control of primary gold of any quantity or even ornaments by a person is established, then that person is to be assumed to be the owner thereof unless contrary is proved, by virtue of provision of Section 99 of the Act.
36. Now, in the present case. Bhagirath is the person who has been found in possession of primary gold weighing 1220 grams of 23.5 carats purity. It is noteworthy that in spite of so called retractions of statements made by Bhagirath on 4.3.1975 and 6.3.1975 and in spite of their helf-con-tradictory nature, one thing stands out: which is that the recovery of the gold from Bhagirath is not being denied nor the factum of its being ia nine pieces nor the weight. Bhagirath was to be presumed to be the owner of that gold in terms of Section 99, in case no explanation came forward, but in his very first statement soon after his apprehension, he has come out with the version that this gold was handed over to him by two persons whom he named and who belong to Bikaner, and that the gold was given to him for being taken to Abohar for die cutting and that he was not the owner thereof. These basic facts were reiterated in the second statement recorded on 6.3.1975.
which is being discarded as being involuntary, and having been recorded while in custody, and contents thereof presumably not being known to him-statement being in English and he being an illiterate person making only thumb marks bat here also the explanation remains the same; namely, that this gold was handed over to him by the same very two persons, whom he named in the very first statement; namely, Laxmi Narain and Sat Narain, residents of Napasar, a place near Bikaner.
37. Other additional facts which this statement contains have no doubt been disbelieved; namely, implication of Ram Rattan of Abohar, and Khetu Ram of Ganganagar and nobody has grievance on that ground, but nevertheless the basic issue, that of explanation of the possession, remains in both the statements consistently and primarily the same.
38. It has further to be noted that this link is owned by the other appellants inasmuch as Laxmi Narain and Sat Narain when examined only three days after, have admitted having carried this gold from Napasar to Ganganagar and having handed over the same to Bhagirath at Ganganagar for being taken to Abohar for die cutting, and the goldsmiths; namely, Goverdhan and Hari Ram, whom they named as the ones who had entrusted the gold to them for being taken to Ganganagar, have also not disowned this part of the version.
39. It is under this situation where the recovery, possession, custody or control of the recovered gold at the hands of these five persons from stage to stage is not being denied, that the issues posed by the two learned Members, have to be viewed on a cumulative consideration of the facts as highlighted above, it can be unhesitatingly said that the Department has discharged the initial burden, contemplated by Section 99 of the Act and the onus shifts to these persons-(appellants herein)-to show as to in what manner they have not contravened provisions of the Gold (Control) Act.
40. This brings us to the question as to what extent nature of burden of proof shifts to the appellants Here again, recourse to general principles of law may furnish a useful guide though those principles may not in terms strictly apply. One of such principles is that facts within the knowledge of a particular person are required to be proved by that person which principle is enshrined in Section 106 of the Evidence Act. This is a rule of evidence, and is different from the initial burden of proof inasmuch as whereas the basic onus always remains on one party, the burden of establishing certain facts of evidence keeps on moving, during the proceedings or trial, and is never static. This concept has been very lucidly summed up, in a matter decided by the Appellate Tribunal for Forfeited Properties reported as 1983 ETR 56 Syed Arif Bawamiyo, Bombay v. Competent Authority, Bombay, where the meaning of the expression 'burden of proof' has beer elucidated laying down that this expression has, "two distinct senses in the Law of Evidence; namely, burden of establishing a case, and burden of introducing evidence. The burden of proof, and weight of evidence, are thus two very different things The former remains on the party affirming the facts in support of the case and not change; the latter, however, shifts from side to side, in the progress of trial according to the nature and strength of proof offered in support, or denial of the main facts to be established. Thus the burden of proof in the first sense is always stable while in the second sense it may shift constantly according as one scale of evidence or the other preponderates." 41. The best guidance in this matter; namely as to the extent of proof required to be discharged by an accused or respondent is furnished by authorities under Prevention of Corruption Act because Section 4 there of places a statutory burden on the accused to prove that the amount recovered from him was not by way of illegal gratification. While discussing the scope of that burden, the judicial authorities are unanimous in the view that the burden placed on the accused is always less stringent than that laid on the prosecution in proving guilt, and corresponds to that, which rests on a plaintiff or defendant, in civil proceedings, who is required to prove on issue by preponderance of probabilities. This proposition has been laid down in cases reported as: Public Prosecutor v. A. Thomas M.C. Mitra v. The State laying down that the burden of proof will be satisfied if the accused establishes his case by preponderance of probabilities, as is done by parties in civil proceedings, and it is not necessary that he should establish his case by the test of proof beyond reasonable doubt. Similar proposition was enunciated in AIR 1968 Tripura 57 Phani Bhushan Gupta v. The State.
42. On a cumulative study of the principles discussed above, the answer to the two points, made by the two learned Members, which have an important bearing on each other, would be that whereas the proceedings have to be deemed to be of quasi-criminal nature, an initial burden lies on the department to establish the basic facts, which can be held to be tantamount to contravention of the provisions of the Act, but once that is proved or admitted, the burden of showing that irrespective of the existence of these facts the possession, custody or control did not involve any contravention of the provisions of the Act would be cast on the respondent to the proceedings, and the facts within his knowledge or which could be proved only by him have to be established by such a person.
43. That disposes of the points academically but coming to the facts of the case as already discussed, the recovery from Bhagirath being not disputed, and the weight and shape as disclosed by him, and indicated by weighment memo, not being disowned, the initial presumption under Section 99 of the Act can certainly be invoked by the Department.
44. The question that would remain would be only as to how far the explanation offered by these persons can absolve or exonerate them.
45. This takes us to the second point (b) framed by the learned Member (J) in his note dated 29.10.1983, as to the effect of the entries in G.S 13 Register of Goverdhan and Had Ram, as well as that of Bhagirath himself. Proceedings on the guidelines, offered by the case law discussed above, it can safely be said that the burden expected to be discharged by these persons cannot be as strict, as placed on a prosecution in criminal trial, of establishing a fact beyond all reasonable doubt, and in case these persons succeed in producing a plausible explanation to the possession of gold which was with Bhagirath on their behalf, they can be deemed to have discharged the burden.
46. The learned Member (J) is right in observing that the entries in the two registers having been duly countersigned by an Inspector of Central Excise on 3.3.1975, that is only a day prior to the arrest of Bbagirath and these two persons having been named by Laxmi Narain and Sat Narain in their very first statement, which fact was counterchecked by the Department on very next day, because whereas the statements of Laxmi Narain were recorded on 9.3.1975, that of Goverdhan and Han Ram on 10.3.1975 and on the same day six persons, whose names find mention in the register, were examined, and they duly corroborated the facts.
47. The authorities below have not cast any aspersion on the Inspector who is supposed to have checked the entries nor have doubted the recording of entries on the dates, when they are purported to have been made. This fact of inspection by the concerned Inspector also raises the presumption that some ornaments as detailed therein were in process which could, as well be process of melting as pleaded by these two appellants. In view of the finding at the level of the Central Board of Excise & Customs that the gold cannot be considered to be smuggled and there being no suggestion that these persons could have come by such a large quantity of gold overnight in some other manner, I am of the view they have to be held to have plausibly explained the possession.
48. A logical corollary of the above finding would be that the gold which is entered in the Registers of these certified goldsmiths; namely, Goverdhan and Han Ram as corresponding to weight of ornaments handed over to them respectively by customers, named therein, for making of new ornaments, can be said to have been held on their behalf, and since gold recovered in primary shape attributable to these persons individually does not exceed the prohibited limit, these 6 persons named Ram Lal, Mohan Lal, Bhura Ram, Megha Ram, Hanuman and Jetha Ram cannot be said to be privy to any act of contravention of the provisions of Gold (Control) Act by the goldsmiths. Consequently, the gold belonging to them will be saved from confiscation in term of proviso to Section 71 of the Act.
49. The liability of the appellants however depends upon reply to point (c) raised by the learned Member (J); namely, to be applicability of Sections 42 and 43 read with Sections 37, 71 and 79 of the Act to these persons, in the light of the facts of these appeals.
50. The contention of the appellants in this regard is that notice to show cause having been given with reference to the provisions of Section 8 of the Act, which they urge, applies in terms to persons other than certified goldsmiths, they would be governed by the provisions of Chapter VIII, starting from Section 39 onwards, and that any action against them by invoking Section 42 of the Act, would not be permissible.
51. I have gone through the relevant provisions of the Act, and I find the contention to be not sustainable, as it is to be noted that Chapter III commencing from Section 8, contains a general prohibition relating to acquisition, possession and disposal of gold in any manner; the subject matter of this Chapter being: Restrictions, relating to the manufacture, acquisition, possession, sale, transfer or delivery of gold 52. If this provision stands by itself, then any person, which expression would also include goldsmiths and those employed by them, could not have possession, custody or control of any quantity of primary gold. The only effect, to my mind of the saving clause as contained in the opening provisions of Sub-section (1) of Section 8, would be that certain exceptions have been carved out for certain categories, for whom provisions have been made in later portions of the Act. Certified goldsmiths, and the persons employed by them, would be one such category. In the result, the absolute prohibition created by Section 8 gets diluted or relaxed in terms of the provisions contained in other portions of the Act; they being Chapter VIII in the case of goldsmiths. The only effect of Section 42 would thus be to entitle them to keep in possession primary gold up to the limit of 300 grams, which is an exception to the absolute and general restriction, contained in Section 8(1) of the Act.
53. This, in the nature of things, has to be by way of defence by a person, charged with the contravention of provisions of the Act as enshrined in sections, eluting a goldsmith to plead the provisions of Section 42. This, in no case, implies that notice to show cause has to be given to a certified goldsmith under the provisions of Section 42 of the Act. therefore, do not think that failure to cite Section 42 of the Act would have the effect of totally vitiating the proceedings against these persons who set themselves up as certified goldsmiths. Their case has only to be viewed in the light of related provisions of Section 8 read with Section 42 end this is what has been done in this case. Same principles would apply to the case of the carriers, namely, Sat Narain who claim protection of Section 37 read with Section 43 of the Act because they would also generally fall under the provisions of Section 8, but for these special provisions, but they could be protected only to the extent of the quantity of the gold which the persons, on whose behalf they carry, namely, certified goldsmiths, could legitimately possess; with the result that the prohibition of "possession, custody, or control of any quantity of primary gold in excess of 300 grams as contained in Section 42" shall apply, to the appellants as well as to the principals; namely, the goldsmiths.
54. In the result, whereas the gold, so far as it belongs to the six customers, may not be liable to confiscation, these appellants would be certainly liable to personal penalties having contravened the provisions of Section 8 read with Section 42 of the Act, so far as the three persons, who claim to be goldsmiths, are concerned; as for the carriers: Laxmi Naraiin, and Sat Narain, and also Bbagirath, Section 37 or Section 43 cannot come to their rescue, once gold in excess of the quantity permitted by Section 42 for goldsmiths is found to have been in their custody or control, which they admit to have been the case.
55. My conclusion, therefore, would be that on the facts of this case the possession of primary gold at various stages, by all these five appellants, would attract prohibition of Section 8, and Section 42 cannot be of any assistance, to even certified goldsmiths, because they have admittedly exceeded the permissible quantity. They are thus liable to personal penalty, having contravened the provisions of the Act But the gold, so far as it belongs to the six customers, per entries in the GS-13 Registers, would not be liable to confiscation, except for 200 grams which Goverdhan in the statement dated 10.3.1975 admitted, to have belonged to him. He, as a goldsmith, was expected to know of the prohibition against possession by him of primary gold in excess of 300 grams, at any one given time. Consequently 200 grams of gold which he added of his own, to the quantity, which already exceeded than that statutorily permitted, would be liable to confiscation.
56. It is observed from the record that all these persons are residents of a remote village in Bikaner Distt. and are petty goldsmiths or carriers. They have faced the proceedings from that distant place for a period of about 9 years. In the circumstances, personal penalty of Rs. 5,000/- each, against the appellants would adequately meet the requirements of law.
The other points made by learned Member (T) at S. No. (1) and (2) are matter of procedure and do not call for any discussion.