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Assistant Collector of Customs and Central Excise, Hyderabad Vs. Palakurthi Mallikarjun and anr. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtAndhra Pradesh High Court
Decided On
Case NumberCriminal Appeal No. 732 of 1981
Judge
Reported in1984(2)ECC53; 1983(12)ELT288(AP)
ActsCustoms Act, 1962 - Sections 135; Code of Civil Procedure (CPC), 1908 - Sections 313
AppellantAssistant Collector of Customs and Central Excise, Hyderabad
RespondentPalakurthi Mallikarjun and anr.
Excerpt:
customs - offences--burden of proof--accused found in possession of goods of foreign origin--accused not proving goods are not smuggled goods--confiscation and levy of penalty--criminal prosecution --acquittal by trial court laying burden on prosecution--legality--customs act (52 of 1962), sections 2(39), 11-d, 123, 135--sea customs act (8 of 1878), section 178-a. - - mallikarjun failed to produce any documents to show the seized watches were not smuggled. the evidence shows, it is unsafe to reply on such a document and convict a citizen for the superintendent of the customs and central excise, arrested the watch dealer at 13.15 hours on november 24, 1977 and it does not appear at what point of time ex. ' therefore, i deem it unsafe to reply on ex......in the criminal appeal pertains to the customs act 52 of 1962 (the act). palakurti mallikarjun, a watch dealer of warangal town, was prosecuted for the offence under section 135 of the act. the special judge for economic offences, hyderabad on february 4, 1981 acquitted him. the customs authorities aggrieved thereby, have lodged the appeal. the goods in the case relate to watches of foreign origin. in brief, the prosecution case is as under : the assistant collector of customs and central excise and the superintendent of his department at hyderabad received information that mallikarjun on november 23, 1977 was to arrive at hyderabad from bombay with smuggled watches. the latter of the two on november 23, with the squad of officers was awaiting at paradise talkies the arrival of.....
Judgment:
ORDER

1. The offence in the criminal appeal pertains to the Customs Act 52 of 1962 (the Act). Palakurti Mallikarjun, a watch dealer of Warangal town, was prosecuted for the offence under Section 135 of the Act. The Special Judge for Economic Offences, Hyderabad on February 4, 1981 acquitted him. The customs authorities aggrieved thereby, have lodged the appeal. The goods in the case relate to watches of foreign origin. In brief, the prosecution case is as under :

The Assistant Collector of Customs and Central Excise and the Superintendent of his department at hyderabad received information that Mallikarjun on November 23, 1977 was to arrive at Hyderabad from Bombay with smuggled watches. The latter of the two on November 23, with the squad of officers was awaiting at Paradise Talkies the arrival of Mallikarjun who when alighted from the Ballal Transport Company Bus from Bombay at 10.30 A.M. The Superintendent of Customs, seized a bag from him M.O. 23 which contained twenty-two wrist watches (four out of them were 'Indian Made'), twenty-nine watches movements. A panchanama was held between 3 p.m. to 5.15 p.m. on that day. Mallikarjun failed to produce any documents to show the seized watches were not smuggled. At 13.15 hours, the next day, he was arrested. He was produced before a Magistrate. In Ex. P-9, on November 24, 1977, before the Superintendent of Customs and Central Excise, Headquarters (Preventive) Mallikarjun accepted M.Os. 1 to 22, the watches seized, were smuggled. He said, he purchased them at Bombay in Alladul Rahman Bazaar from an unknown 'broker' for Rs. 6,723.50 ps. and that he obtained no receipt from the vender. The Assistant Collector, Customs and Central Excise at Hyderabad, by order, in later proceedings under Act 52 of 1962, confiscated the watches and levied a penalty of Rs. 1,500/-. On December 20, 1978, under Ex. P. 1 sanction was obtained from the appropriate authority to prosecute him. At that trial, K. Parthasarathy, Assistant Collector of Customs and Central Excise, P. Swamy, Superintendent of that department, G. Padma Rao, Proprietor of Ganesh Art Printing Press at Mangalhat, Hyderabad were examined who deposed to the facts contained in the panchanama in Ex. P. 8 and the statement made in Ex. P-9 and also of circumstances in which the watch dealer was decided, on December 20, 1978, to be prosecuted. The learned Special Judge for the Economic Offences in the judgment on February 4, 1981, however, acquitted him of the offence for the held, 'the possibility that Indian made wrist watches fitted with foreign dials or wrist watches assembled with foreign parts can be passed of easily as foreign made wrist watches cannot altogether be ruled out.'

2. In this appeal, at the outset, it may be mentioned that the statement, Ex. P-9, given by Mallikarjun, I am not prepared to rely for more than one reasons. The evidence shows, it is unsafe to reply on such a document and convict a citizen for the Superintendent of the Customs and Central Excise, arrested the watch dealer at 13.15 hours on November 24, 1977 and it does not appear at what point of time Ex. P-9, was recorded and obtained by him, whether it was before the arrest or after arrest. In answering (Question No. 2) at the trial under Section 313, Cril. P.C. as respects, Ex. P-9, Mallikarjun stated, 'I have not admitted any offence but given the statement as dictated by them. The statement was signed by me and I gave it to them. They (Customs officials) represented that no harm will be done to me and on that representation, I gave the statement.' Therefore, I deem it unsafe to reply on Ex. P-9 statement, in judging culpability or otherwise of the watch dealer.

3. The admissible facts, therefore, from the evidence are : On November 23, Mallikarjun alighted from a bus at Paradise Talkies at 10-30 a.m. He was found in M.O. 23 twenty-two wrist watches, twenty-nine watch movements. The watches in M.O. 23 were seized from him in Ex. P-8. On December 20, 1978 under the Act on the basis of Ex. P-8, Panchanama, Mallikarjun was decided to be prosecuted. The evidence of the prosecution is that of K. Parthasarathy, P. Swamy and G. Padma Rao that two out of the seized watches are of 'Japan made' and sixteen of the balance are 'Swiss made'. The question is whether the Special Judge for Economic Offences was correct to have acquitted the watch dealer of Warangal.

4. In considering the culpability of Mallikarjun, it is necessary to note the evidence of Swami and K. Parthasarathy which reveals that customs authorities received information and were reasonably certain of M.Os. 1 to 22 were of foreign origin. The watches were seized as smuggled goods under Section 123 of the Act. The language in Section 123 is anologous to Section 178-A of the Customs Act, 1878 which was interpreted by Supreme Court in Babulal Amthalal Mehta v. Collector of Customs, Calcutta and Others (1) : 1983ECR1657D(SC) to hold 'No......doubt, a very heavy and onerous duty is cast on an innocent possessor who for aught one knows, may have bona fide paid adequate consideration for the purchase of the articles without knowing that the same has been smuggled.' The only pre-requisite for the application of the Section is the subjectivity of the Customs Officer in having a reasonable belief that the goods are smuggled. This interpretation was approved and reiterated in times out of number, therefore it is not necessary to cite all the cases. Thus, in the instant case, it is seen from out of the twenty-two (even at the cost of repetition) eleven are Nino wrist watches in two sizes. They were of 'Swiss made', five Omax wrist watches were of 'Swiss made', two Citizen wrist watches were of 'Japan made'. Thus, out of twenty-two recovered, eighteen wrist watches were of foreign origin. The question for determination is whether on whom, does the burden fall to show they are smuggled goods whether the burden is on the prosecution or on Mallikarjun. the watches seized are goods specified as per clause (2) of Section 123. These eighteen watches are recovered from the person of Mallikarjun (Ex. P-8) is the prosecution case and in proceedings under the Act. The watches were confiscated and the watch dealer was ordered to pay penalty of Rs. 1,500. In the instant criminal case, under Section 123, the 'burden of proving that they are not smuggled goods' (clause 1), therefore, is on Mallikarjun is the argument of the customs authorities. They contend eighteen out of M.Os. 1 to 22 are smuggled goods within the meaning of clause 39 of Section 2. They were acquired in violation of Section 11-D of the Act for the watches recovered are not shown by any evidence to have been cleared through the customs. Section 135 of the Act say, in such circumstances, holds acquisition of smuggled goods is punishable 'with imprisonment for a term which may extend to three years or with fine, or with both'. Therefore, the watches are ex facie, shown to be made of Japan or Switzerland Mallikarjun purchased them from an unknown broker in Alladul Rahman Bazaar at Bombay for Rs. 6,723.50 ps. He does not prove at trial the watches suffered any duty and was unable to explain that they are not smuggled goods. The watches were confiscated in procedings under the Act 52 of 1962 and at the trial, he does not explain that the seized watches are not smuggled goods, that his possession of them is 'innocent' or is not liable to be punished under Section 135 of the Act.

5. The learned counsel appearing for Mallikarjun, in the circumstances, driven on the facts of the case to a corner, urged that Section 123 does not apply to proceedings before a criminal Court. The Counsel argued in a criminal Court, the burden is as in any other criminal case, on the prosecution and the trial court is not in error in having acquitted the watch dealer for the prosecution has not proved the eighteen watches, were smuggled from Switzerland or from Japan. The case of BABULAL (1) belies the assertion of the defence. That case and host of other cases show, Section 123 was applied in proceedings before the criminal court. The learned counsel is unable to cite any authority that Section 123 of the Act is inapplicable in Criminal cases. The contention on behalf of the watch dealer does not hold water. Thus, on facts of the case, eighteen wrist watches of foreign origin, were recovered and Mallikarjun is unable to prove that they are not smuggled goods, therefore, he should and is accordingly held guilty of the offence he was charged in the criminal case.

6. The next question for consideration is that punishment should be imposed. It is seen the value of eighteen watches is Rs. 5, 800/-. Therefore, Mallikarjun is convicted under Section 135 of the Act 52 of 1962 and is ordered to pay a fine of Rs. 5,800/-. In default of payment of fine, he shall undergo rigorous imprisonment for two years. The appeal is allowed.


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