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State of Maharashtra Vs. Umar Badshah Hassan Damudi - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtMumbai High Court
Decided On
Case NumberCriminal Revision Appln. No. 382 of 1973
Judge
Reported in(1974)76BOMLR788
ActsCustoms Act, 1962 - Sections 11-I, 11J, 11K, 11L, 111, 113, 113(L), 134 and 135
AppellantState of Maharashtra
RespondentUmar Badshah Hassan Damudi
Appellant AdvocateKhandalwala, Adv.
Respondent AdvocatePorus Mehta, Adv.
Excerpt:
customs act (lii of 1962), chap. ivb, sections 11j, 11k, 11-l, 135(a), (b), 113(1), 111, 2(39) - sea customs act (viii of 1878), section 167(81)--government of india, ministry of finance notifications nos. 37 and 38 dated january 3, 1969--provisions of sections 11j, 11k and 11-l, whether prohibitions or mere regulations--contravention of such provisions when can amount to offence punishable under section 135(a)--words 'any other law for the time being in force' in section 135(a), meaning of.;the provisions contained in sections 11j, 11k and 11-l of the customs act, 1962, considered in the light of the object for which chapter ivb was inserted in the act and consequential amendment made in section 113 of the act by introduction of clause (1) in that section, leave no doubt that they.....1. the petitioner-complainant is aggrieved by the order of discharge passed by the learned additional chief presidency magistrate, 5th court, dadar, bombay, in favour of the seven accused, who are the respondents before me. the petitioner, the assistant collector of customs, had filed a complaint charging the accused with the commission of an offence under of the customs act, 1962. 2. the complaint disclosed the following facts :- in pursuance of certain information the customs and central excise officers of the marine and preventive division, bombay, raided the premises at room no. 10, sher mansion. ground floor, kopergaon estate, mazgaon, bombay-10 on 25/26th september 1969 under the cover of a search warrant. the officers found accused nos. 1 and 2 in the premises. while they were.....
Judgment:

1. The petitioner-complainant is aggrieved by the order of discharge passed by the learned Additional Chief Presidency Magistrate, 5th Court, Dadar, Bombay, in favour of the seven accused, who are the respondents before me. The petitioner, the Assistant Collector of Customs, had filed a complaint charging the accused with the commission of an offence under of the Customs Act, 1962.

2. The complaint disclosed the following facts :-

In pursuance of certain information the Customs and Central Excise Officers of the Marine and Preventive Division, Bombay, raided the premises at room No. 10, Sher Mansion. Ground Floor, Kopergaon Estate, Mazgaon, Bombay-10 on 25/26th September 1969 under the cover of a search warrant. The Officers found accused Nos. 1 and 2 in the premises. While they were about to start the search, an Ambassador car bearing No. MRD-6488 came near the premises and stopped in front of the room. Accused No. 3 was at the wheel of the car and accused No. 4 was sitting by his side. On searching the car, the officers found three gunny bags containing in all 51 pieces of silver bars weighing about 92-556 Kg. These bags were lying on the footboard of the rear seat of the car. The Officers took charge of these bags. In the presence of the panchas, who had witnessed the search of the car, the premises were searched. The premises consisted of two rooms. In the first room the Officers saw 67 gunny bags stacked together. Each gunny bag bore the marking 'EMS Dubai'. The gunny bags contained red coloured saw dust. On detailed examination, the Officers noticed that the 67 bags contained 406 silver bars collectively weighing 627-166 Kgs. These were concealed in the midst of the saw dust. In the second room similar 58 bags were stored. But they had no markings. The bags contained similar red coloured saw dust. But no silver was secreted inside the bags. The Officers came across gunny cloth hand-bags lying near the gunny bags. These cloth hand-bags were similar to the bags in the Ambassador car. These gunny cloth hand-bags contained 156 silver bars collectively weighing 257.117 Kgs. All these silver bars were attached under a panchanama as the Officers entertained a reasonable belief that they were being illegally exported out of India and that there was contravention of the provisions of the Customs Act, 1962 in respect of storage and transport of the silver bars. During the search accused Nos. 5 and 6 came to the premises and they were also detained by the Officers for further enquiries. On further investigation the authorities learnt that accused No. 7 had taken the premises on rental basis with effect from 20-9-1969. The premises were meant for storing the goods of M/s Abubaker & Ismail, of which accused No. 7 was the Managing partner. The said firm mainly dealt in handloom textiles and also exported textile goods, onions, curry powder, etc. to Middle East countries. Accused No. 7 had taken the said premises without consulting his other partners. Accused Nos. 1 and 2 were the employees of accused No. 7. Accused No. 7 had taken accused No. 1 to the premises in a taxi and at that time he had handed over to accused No. 1 two keys of the said premises. From 20-9-1969 till the date of the search, accused Nos. 1 and 2 received and stored in the premises under the orders and instructions of accused No. 7 the said gunny bags containing silver bars. Every time the bags were brought and delivered by accused No. 3 in the said Ambassador car MRD-6488. The car was owned by accused No. 7. Accused No. 3 at all material times was the driver of the car. Accused No. 3 is an employee of accused No. 5. Accused No. 4 is also an employee of accused No. 5. He was working as a salesman in the shop of accused No. 5. Accused No. 5 was a goldsmith having a gold ornaments shop at Zaveri Bazar. On 25-9-1969 accused No. 3 carried three gunny bags which contained silver bars in the car owned by accused No. 5. He was instructed to carry the silver by accused No. 6. All these facts were known to accused No. 4. Accused No. 3 had agreed to share the reward for service with accused No. 4. Accused No. 6 was at all material times a bullion merchant having his shop at Zaveri Bazar. Accused Nos. 5 and 6 knew each other and were visiting the godown. On 25th September 1969 in the evening accused Nos. 5 and 6 had come to the said premises in the car of accused No. 6. On sighting the officers accused No. 6 attempted to run away. He was chased and caught by the officers. From 18-9-1969 until the date of the search of the said premises some goods were exported to the Middle East countries, from the said premises. Accused Nos. 1 and 2 had attended to the despatch work of those consignments.

3. The complainant says that all the accused i.e. accused Nos. 1 to 7 were concerned in the illegal transport and storage of the said silver in the said godown in contravention of the provisions of Sections, and L of the Customs Act, 1962. This was done with a view to facilitate the export of silver outside India. The silver bars weighing 976,839 Kgs. were valued at Rs. 4,88,500/- at the local market rate. It was also mentioned in the complaint that by Ministry of Finance Notification No. G.S.R. 37 dated 3-1-1969 the Central Government had declared silver bullion to be specified goods under Section 11I of the Customs Act of 1962. By Ministry of Finance Notification G.S.R. 38 dated 3-1-1969 the Central Government had declared, inter alia, that the inland area would be fifty kilometres in width from the coast of India falling within the territory of the State of Maharashtra as a specified area for the purposes of Chapter IV-B of the Customs Act, 1962 (as amended). It is said that the accused jointly and severally had failed to intimate to the Customs Authorities the place of storage of the said silver as required by of the said Act. They were jointly and/or severally transporting from, into or within the specified area or had conveyed in such area the said silver without the necessary transport vouchers as required under of the said Act. They had also jointly and/or severally failed to maintain proper accounts in respect of the said silver as required under of the said Act. The said silver is liable to confiscation under of the said Act, and has been so confiscated by the order dated 21st June 1971, passed by the Additional Collector of Customs & Central Excise (Preventive) Bombay. In the circumstances the accused had contravened the provisions of Section, and L of the said Act, They are knowingly concerned jointly and/or severally in relation to the said silver in a fraudulent evasion of the prohibition for the time being imposed under Sections J, -K and 1-L of the Customs Act, 1962 and had thereby committed an offence under of the Customs Act, 1962.

4. Before the learned Additional Chief Presidency Magistrate, who entertained the complaint, evidence was recorded of as many as 13 witnesses. At that stage the question of framing the charge was considered by him. Certain points of law were raised both on behalf of the prosecution and the defence. The learned Additional Chief Presidency Magistrate considered the various provisions of the Act and recorded certain findings. After referring to of the Customs Act he observes that the prohibition mentioned in the Section is the prohibition of import and export of goods, currency, etc. under the Customs Act or any other Act. According to his view, not each and every prohibition under the Customs Act will attract the provisions of of the Customs Act. He says that the provisions contained in Sections J, -K, an1-L are in fact no prohibitions. They are in the nature of regulations. Possession of specified goods is not prohibited. Possession and acquisition are to be intimated. Movement of specified goods is regulated and accounting is prescribed. Non-compliance with these provisions could not lead to an inference that the goods were exported or attempted to be exported. It would only mean that there is a likelihood of these goods being exported in violation of the Customs Act. To prevent the likelihood the provisions of Chapter IV-B are inserted in the Act by amendment. This is done to enable the Customs Officers to have control over the goods. He says that the wording of the Act will also indicate that special measures for the purpose of checking the illegal export or facilitating the detection of goods which are likely to be illegally exported are to be taken when the Central Government by notification in the Official Gazette specifies the goods of such class or description. In his view the provision of cannot be considered as a prohibition, as that would lead to an unreasonable prosecution and punishment of persons only because there is a likelihood of exporting the goods. This is as good as punishing a person for a certain intention and that would be unreasonable. This will not even amount to a preparation to commit an offence. He proceeded to examine in detail the various provisions contained in Chapter IV-B of the Act. Then he concluded that for non-compliance of the regulations, the only consequence is confiscation of the goods under of the Act. Then he compared the provisions contained in with the provisions contained in of the Act. Under a person is punishable if he is knowingly concerned in carrying, removing, depositing, etc. the goods which are liable to confiscation under The learned Magistrate finds that the omission of from is significant. provides for confiscation of goods. For all these reasons he was of the opinion that the non-compliance of the provisions of Sections and is not an evasion or attempt at evasion of the prohibition contemplated in of the Act. The only, consequence of such non-compliance will be confiscation of the property under of the Act. He, therefore, discharged accused Nos. 1 to 7.

5. The learned counsel for the complainant Mr. Khandalwala, submits that the order passed by the learned trial Magistrate is ex-facie erroneous and contrary to all the relevant provisions of the Customs Act in general and in particular the provisions of of the Customs Act. According to Mr. Khandalwala this was a clear case where there was prima facie evidence about the fraudulent evasion of the various prohibitions and the learned Magistrate should have proceeded to frame a charge against all the accused. Moreover, the learned Magistrate in the course of his judgment has observed that if charge was to be framed against all or any of the accused, then the trial of the different sets of accused will have to be separated. Mr. Khandalwala has not objected to this course. But he submits that the order of discharge should be set aside and the learned Magistrate should be directed to proceed with the trial in accordance with law.

6. Mr. Porus Mehta and the learned counsel who appear for the other accused have, on the other hand, vehemently argued that the learned Magistrate has considered both the legal and factual aspects of the case. The order of discharge is not based only on the interpretation of the relevant precisions. Even if the complainant was justified in filing the complaint, the evidence adduced by the prosecution will not make out a prima facie case within the meaning of the Act.

7. It is said that the prohibitions in Chapter IV-B of the Act which may have a bearing on illegal exportation were never intended by the Legislature to be the subject-matter of prosecution. This legislature intent is evident from the omission of from By contrast expressly refers to of the Act. Mr. Porus Mehta and the other counsel support this view of the learned Magistrate.

8. If an attempt is to be made to understand the mind of the Legislature, then the omission appears to be for different reasons. The lawmakers at all times have considered illegal importation a more serious evil than illegal exportation. There are practical considerations which may explain the different legislative approach. Illegally imported goods are readily absorbed in the trade and commerce throughout the country and will have lasting adverse effect on the economy. Besides it is easier to detect and control illegal exportation at places like Customs port, specified routes, vicinity of land frontier, coast, bay, gulf, break or tidal river mentioned in of the Act. For curbing illegal exportation even preliminary activities which may be otherwise innocent from the point of view of exportation are now controlled by the insertion of Chapter IV-B of the Act. Even when was suitably amended by the addition of clause (L) no change in was thought desirable. Contravention of prohibition was sufficiently punished by confiscation after adjudication.

9. Another argument is based on the peculiar wording of of the Act, which had taken place of the panel provision contained in Section 167(81) of the Sea Customs Act. Deliberate omission of the words 'exportation or importation' have some bearing on the interpretation of the new penal provision. In my opinion the change in wording does not indicate any change in the essential connotation. When refers to duty chargeable goods, there is no reason to mention exportation and importation, extends to goods liable to confiscation under (illegal importation).

10. The controversy can only be resolved after considering the ingredients of the offence, which is made punishable under of the Customs Act.

11. with the marginal note runs thus :

'Evasion of duty or prohibitions'.

: 'Without prejudice to any action that may be taken under this Act, if any person -

(a) is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods.

(b) * * * he shall be punishable ................'.

12. The section makes three actions of a person punishable.

(1) If any person is, in relation to any goods, in any way knowingly concerned in any fraudulent evasion or attempt at evasion of duty chargeable thereon.

(2) If any person, in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under this Act, and

(3) If any person is, in relation to any goods in any way knowingly concerned in any fraudulent evasion of any prohibition imposed under any other law for the time being in force with respect to such goods.

13. The first question, which was debated before me was whether the provisions of Chapter IV-B of the Customs Act 1962 contain prohibitions or they are mere regulations or other controlling measures which cannot come within the definition of prohibition mentioned in of the Act. The expression 'prohibition' is not defined in the Act. The ordinary meaning of the expression 'prohibition' will certainly include any restriction which may be partial or total. Mr. Khandalwala says that there is no justification for restricting the connotation of the word 'prohibition' in any manner. He tried to derive some support from certain remarks of the word 'prohibition' in any manner. He tried to derive some support from certain remarks of the Supreme Court in Sheikh Mohamed Omer v. Collector of Customs, Calcutta : 1983(13)ELT1439(SC) My attention was drawn to the following observations of Hegde, J. at P. 295

'According to him restrictions cannot be considered as prohibition more particularly under the Imports and Exports (Control) Act, 1947, as that statue deals with 'restrictions or otherwise controlling' separately from prohibitions. We are not impressed with this argument. What clause (d) of says is that any goods which are imported or attempted to be imported contrary to 'any prohibition imposed by any law for the time being in force in this country' is liable to be confiscated. 'Any prohibition' referred to in that section applies to every type of 'prohibition'. That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression 'any prohibition' in of the Customs Act, 1962 includes restrictions. Merely because section 3 of the Imports and Exports (Control) Act, 1947 uses three different expressions 'prohibition', 'restricting' or 'otherwise controlling' we cannot cut down the amplitude of the word 'any prohibition'. 'Any prohibition' means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition.

14. It must be mentioned that the decision was in respect of a case under of the Customs Act, 1962. Mr. Khandalwala rightly says that whenever the expression 'prohibition' is used, then it must be understood in its widest sense.

15. The Customs Act, 1962 was amended by introducing Chapter IV-B in 1969. The Chapter was inserted in the Act by Act No. 12 of 1969 with effect from 3-1-1969. We are concerned with Section, and L in the present case. Under every person who owns, possesses or controls on the specified date, any specified goods, the market price of which exceeds fifteen thousand rupees shall, within seven days from that date, deliver to the proper officer an intimation containing the particulars of the place where such goods are kept or stored within the specified area. In the present case there is no dispute that silver is a specified goods and the market price exceeds Rs. 15000/-. Under the transport of specified goods from, into or within any specified area will not be made unless the goods are accompanied by transport voucher prepared by the person, owning, possessing, controlling or selling such goods. Under persons possessing specified goods are to maintain accounts in such form and in such manner as may be specified by rules made in this behalf. When these provisions are considered in the light of the object for which Chapter IV-B was inserted in the Act, there is no doubt that they contain certain prohibitions. Chapter IV-B was enacted for the prevention or detection of illegal export of goods. These are the various methods adopted by the Legislature for facilitating prevention or detection of illegal export of goods. They cannot be considered to be mere regulations, which will entail confiscation of the goods under of the Act. When Chapter IV-B was inserted was suitably amended by adding the following item 'L' 'any specified goods in relation to which any provisions of Chapter IV-B or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened.'

16. The word 'contravened' suggests that the provisions of Chapter IV-B in fact contain prohibitions. Apart from the wording of the various sections in the Chapter, the consequential amendment of will also support the view that the Chapter contains prohibitions. The learned Magistrate was not right when he held that all these provisions contained in the Chapter including sections, and L are not prohibitions but are mere regulations.

17. If these are prohibitions, then the next question to be considered is whether the mere contravention of these provisions will amount to the commission of an offence punishable under of the Customs Act. As set out above, refers to three distinct offences, which may be committed by any person in respect of any goods. The opening words of the section make it clear that the prosecution of the offender is in addition to any other action that may be taken under the Act. The contravention of certain prohibition may result in the confiscation of the goods. But this will not save the person from prosecution if he is also guilty of the offence mentioned in of the Act. The first act presents no difficulty. He will be guilty of the offence if in relation to any goods he is in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon, But the question arises whether he commits any such offence when he is knowingly concerned in any fraudulent evasion or attempt at evasion of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to 'such goods'. On behalf of the accused no doubt an argument is made that the expression such goods will be referable to goods which are dutiable or in respect of which duty is payable. Reliance is placed on behalf of the accused on a decision of Single Judge of this Court for this proposition. In Criminal Appeal Nos. 68 of 1972, 298 of 1972, 510 of 1972 and 705 of 1972 decided on 23rd August 1973, my learned brother Hajarnavis J. had occasion to consider whether a person can be held to be guilty of the offence under When the concerned goods are silver. The learned Judge interpreted the words 'such goods' to mean that the goods are such on which duty is chargeable. In his view, if there is no duty chargeable on the goods then there is no fraudulent evasion or attempt at evasion of any prohibition for which the accused can be punished under of the Customs Act.

18. Mr. Khandalwala, who appears for the complainant, submits that when the matter was argued before Hajarnavis, J. certain facts were not brought to the notice of the court. He has now made enquiries and according to his information duty is chargeable on the import of silver. If that is a fact, then silver will be goods in respect of which duty is chargeable and the assumption made by Hajarnavis, J. is erroneous.

19. Mr. Porus Mehta submits that as there is a decision of a single Judge unless the matter is referred to a Division Bench, the decisions will be binding on me. For certain other reasons which follow, I do not propose to express any opinion on this point. But I must mention one or two submissions made by counsel on either side regarding the decision of Hajarnavis, J.

20. Mr. Khandalwala submitted that the learned judge was not right when he held that the words 'such goods' must in all cases include goods, which are chargeable to duty or which are dutiable. Mr. Mehta pointed out that the learned Judge was driven to this conclusion as any other interpretation would lead to certain absurd results pointed out by the learned Judge. Prohibitions under any other law for the time being in force, if so interpreted will include prohibitions which are not germane to the provisions of the Customs Act, 1962. Even possession of arms without a licence under the Indian Arms Act or possession of liquor without a permit under the Bombay Prohibition Act would be prohibitions in respect of goods within the meaning of the Customs Act.

21. In the present case the short question to be considered is whether the learned Chief Presidency Magistrate was justified in discharging the accused particularly on the ground that they are responsible only for contravention of certain regulations or prohibitions which will not be offences under of the Act.

22. Under mere contravention of any prohibition either under the Customs Act or any other law will not be an offence. The necessary ingredients of the offence provide for a certain mens rea. It is only when, in relation to any goods, any person knowingly is concerned in any fraudulent evasion or attempt at evasion of the prohibition that the offence is committed. The prosecution in all such cases will have to establish the necessary knowledge and the fraudulent evasion. If it is a case of a mere contravention of the prohibition then that cannot be a criminal offence. In the present case the contravention of section, and will attract the confiscation of goods under of the Act. provides that the following export goods shall be liable to confiscation, viz. (a) to (B). As stated above, clause (L) was added when Chapter IV-B was inserted in the Act.

23. If the prosecution wants to prosecute the person responsible for such contravention, then the prosecution will have to prove that in a given case there was fraudulent evasion or attempt at evasion of the prohibition and the offender was knowingly concerned in it. But the learned trial Magistrate has not considered the facts of this case while deciding the question of framing of a charge. It is not disputed before me that in fact no arguments were advanced before the learned Magistrate on facts or merits of the case. The order of discharge is mainly based on the particular interpretation of and the other relevant provisions of the Act. As I have found the interpretation erroneous in several ways, it is necessary in the present case to send back the case to the learned Metropolitan Magistrate with appropriate directions for considering the case on merits and then decide whether or not a charge should be framed against all or any of the accused or whether the trial of the accused in different sets should be separated.

24. Various other interesting questions are raised in the present case as to when the accused can be said to be knowingly concerned in fraudulent evasion or attempt at evasion of the prohibition. As the prohibition mentioned in may be one imposed under the Act or under any other law for the time being in force, there is a further controversy which needs to be resolved.

25. According to Mr. Khandalwala, the words 'any other law for the time being in force' will have to be considered as law which is analogous to the Customs Act. Any literal interpretation of these words will lead to absurd results. He referred to the recognised cannas (sic) of construction of statutes. He relied on the following head-note of the case Bengal Immunity Co. Ltd. v. State of Bihar : [1955]2SCR603 .

'(g) Interpretation of statutes - Things to be considered. (Per S. R. Das, Ag. C.J., Bose, Bhagwati & Iman, JJ.) : 'For the sure and true interpretation of all Statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered.

First, what was the common law before the making of the Act : Second, what was the mischief and defect for which the common law did not provide; third, what remedy the Parliament has resolved and appointed to cure the disease and fourth, the true reason of the remedy; and then the office of all the Judges is always to make such construction as shall suppress subtle inventions and evasions for continuance of the mischief, and pro private commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bona - publico.'

26. Mr. Mehta, who appears for some of the accused, reminds me of another caution which should be borne-in-mind while considering the previous history. What he says is to be found at page 85 of Maxwell on The Interpretation of Statutes, 12th Edn. under the caption 'Meaning at the time the statute was passed'

'The words of an Act will generally be understood in the sense which they bore when it was passed. They are to be construed, it has been said, 'as if we had to read it the day after it was passed, though this does not prevent old words from being applied to things not known or invented at the time of the enactment'.

27. In the present case the Customs Act was passed in 1962. remains in the original form. Chapter 1V-B was inserted in the Act by the amendment in 1969. But then the prohibition mentioned in will be referable to various other prohibitions before the amendment of 1969.

28. Even in R. M. D. Chambarbaugwala v. The Union of India : [1957]1SCR930 while dealing with the rule of construction what was decided may be found in the following headnote :

'(C) Interpretation of statutes : Literal Construction - Intention of Legislature how to be gathered.'

'When a question arises as to the Interpretation to be put on an enactment, what the court has to do is to ascertain the intent of them that make it' and that intent must be gathered from the words actually used in the statute. That does not mean that the decision should rest on a literal interpretation of the words used in disregard of all other materials. The literal construction has but prima facie preference. To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole Act; to consider (1) what was the law before the Act was passed, (2) what was the mischief or defect for which the law had not provided, (3) What remedy Parliament has appointed, and (4) the reason of the remedy.'

29. Now, while considering question of literal interpretation, the following rule stated at page 228 of Marwell (sic) on Interpretation of Statutes, 12th Edn. will have to be followed :

'Where the language of a statute, in its ordinary meaning and grammatical construction leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity which can hardly have been intended, a construction may be put upon it which modifies the meaning of the words and even the structure of the sentence.'

30. If the last words in are literally construed, then any other law for to time being in force with respect to such goods may include various other prohibitions under various other laws which may have no connection with the aims and objects of the Customs Act. It cannot be suggested that the Legislature ever intended that the contravention of all the prohibitions under all the laws in the country should be made punishable under of the Customs Act. In view of the recognised cannons of construction, a departure will have to be made in the present case from the literal meaning of the words 'any other law for the time being in force.' Only those laws which are germane to the main objects and purposes of the Customs Act or the laws which were in the mind of the Legislature when these words were enacted will have to be considered. If instances are to be given then reference may be made to the Import & Export Control Act, 1947 and the Foreign Exchange Regulation Act, 1947.

31. But the offence is committed when the person is concerned in any fraudulent evasion or attempt at evasion of prohibition. What is fraudulent evasion is nowhere defined in the Customs Act. The Customs Act will only give an indication in a given case of a particular prohibition and whether it is contravened or violated. Mere contravention or violation of a certain prohibition may not be an offence unless the act is committed with the knowledge which constitutes the mens rea.

32. According to Mr. Mehta the fraudulent evasion or attempt at evasion in some manner must have relation to either exportation or importation. The prohibition may be under the Customs Act or under the Foreign Exchange law. Unless the prosecution makes an accusation of this nature, there cannot be any occasion for conviction of the accused persons under of the Act.

33. Mr. Khandalwala, on the other hand, submitted that it is not necessary to enumerate here specific instances when a person can be said to be concerned in any fraudulent evasion or attempt at evasion of prohibition. Such fraudulent evasion in a given case may be either in respect of importation or exportation or it may be in respect of other acts and omission which are dealt with under the provisions of the Customs Act.

34. He relies on the definition of the word 'smuggling' which is to be found in Section 2(3) of the Act. It is as follows :

'smuggling' in relation to any goods, means any act or omission which will render such goods liable to confiscation under or provides for confiscation of improperly imported goods, etc. Similarly provides for confiscation of goods attempted to be improperly exported. If these provisions are generally considered with the definition of the word 'smuggling', then there is no doubt that till 1969 smuggled goods, etc. will be those which are either improperly imported or improperly exported or attempted to be exported. But the Customs law has undergone a material change in the year 1969 by the insertion of Chapter IV-B. The heading of Chapter IV-B is significant and it is as follows :- 'Prevention or Detection of illegal export of goods.'

35. For the first time an attempt is made to prohibit certain acts or activities which may be described as preliminary or preparatory acts. This may not be preparatory to export of goods. But if the definition of smuggled goods is considered with the title of of the Act, then the goods, which are the subject matter of contravention of the prohibition within the meaning of the Act will be smuggled goods. Preparation by itself is not a criminal offence unless there is specific statutory provision to the effect. Till 1969 or even thereafter preparatory acts per-se were not made punishable under any of the provisions of the Act. The various prohibitions contained in Chapter IV-B of the Act cannot be considered as prohibitions in respect of acts which are preparatory to export. Even the contravention of such prohibitions will only be subject matter of adjudication for confiscation under the provisions of the Act. Although the definition of 'smuggled goods' is now artificially extended to goods, which are not properly the subject-matter of exportation, the prosecution will have to prove that the person charged with the commission of an offence under of the Act is knowingly concerned himself in any fraudulent evasion or attempt at evasion of any prohibition. Mr. Khandalwala argued that in the present case it is not necessary to indicate or enumerate the various acts or omissions concerning exportation, importation or smuggling of goods which may properly fall within the purview of fraudulent evasion or attempt at evasion of prohibitions. Whether or not there is in fact any such fraudulent evasion or attempt at evasion of prohibition will have to be determined in a given case in the light of the facts and circumstances and the nature of the accusation contained in the complaint.

36. As against this Mr. Porus Mehta, who appear for some of the accused, submitted that mere evasion of prohibition unless it amounts to a fraudulent evasion of either exportation of importation will never amount to a criminal offence. It is implicit in the wording of the Act that the offence is committed by the person against the provisions which deal with either exportation or importation of goods. To strengthen his submission he referred to certain unreported judgments of this court (Criminal Revision Application No. 395 of 1971 decided on 13-10-1973 by Tulzapurkar, J., Criminal Appeal No. 1033/71 with Cr. Review No. 735/71 decided on 20-9-1973 by Bhole and Spare, JJ. and Cr. Appeal No. 519 of 1970 and others decided on 21/22-11-1973 by Deshpande & Agarwal, JJ.) while considering the provision of of the Act reference is made in these cases to the prohibition against importation. According to Mr. Porus Mehta, the consistent view of this court is that the offence under Section 135(a) in respect of fraudulent evasion of prohibition can be committed only against importation or exportation.

37. I have gone through these judgments. But I must say that the legal aspect was not consciously considered by the court while using the expression 'importation' with reference to the offence under of the Act.

38. I have mentioned the various contentions raised on behalf of the complainant and the accused only with a view to indicate that mere contravention or prohibition per-se will not be a criminal offence under of the Act. The prosecution will have to further establish that the person was knowingly concerned with the fraudulent evasion of the prohibition in respect of the goods. As to what activities, acts or omissions or violations of provisions of law will attract the penal consequences mentioned in the Section will have to be decided by the court in a particular case.

39. In the result I set aside the order or discharge passed by the learned Chief Presidency Magistrate and direct the Additional Chief Metropolitan Magistrate to proceed with the trial of the case in accordance with law. As he has not considered the facts of the case, he will go through the entire evidence adduced by the prosecution so far and after hearing the learned advocates for the complainant and for the accused, he will decide whether a charge should be framed against all or any of the accused before the court. If he is so inclined, he may direct the separation of the trial of one accused or a set of the accused as the case may be.

40. Rule is made absolute.


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