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Daga Commercial Corporation Pvt. Ltd., New Delhi Vs. Union of India and Others - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtDelhi High Court
Decided On
Case NumberCivil Writ Petition No. 170 of 1971
Judge
Reported in1983(14)ELT2142(Del)
ActsSea Customs Act, 1878 - Sections 19, 167 and 178(A)
AppellantDaga Commercial Corporation Pvt. Ltd., New Delhi
RespondentUnion of India and Others
Cases ReferredBapalal Khushaldas Gosalia v. R. Prasad
Excerpt:
the case discussed the necessity of the belief for seizure of the goods under section 110 of the customs act, 1962 - it was held that the officer was required to necessarily have the belief for seizure of the goods and the belief was required to be based on the reasonable ground, which could be open to the examination by the adjudicating officer - further, the belief of the officer was required to exist at the time of the seizure and the same should not have been arrived at on the basis of the subsequent enquiry carried out by the officer - - it proceeded to say in paragraph 2, after referring to the fact that the parcel on examination was found to contain gold bearing markings of local refiners, that searches and investigations had been carried out by the respondents and that according.....1. the petitioner, m/s daga commercial corporation pvt. ltd., has its head office at bombay and a branch in delhi. it has been carrying on business as merchants and commission agents in bullion and silver for quite a long time. according to the petitioner it has had a clean record and it has not been involved at any time previously in any case of smuggling or transportation of contraband gold. 2. on 30-8-1956 the assessed booked from delhi one parcel of gold with zinc as ballast. the gold was in 32 pieces and the total weight was 457 tolas 1 masha and 3 rattis. the parcel of the gold was delivered to the railways at delhi for being carried to the petitioner's head office at bombay. to forwarding note submitted to the railway authorities made it clear that the contents of the parcel were.....
Judgment:

1. The petitioner, M/s Daga Commercial Corporation Pvt. Ltd., has its head office at Bombay and a Branch in Delhi. It has been carrying on business as merchants and commission agents in bullion and silver for quite a long time. According to the petitioner it has had a clean record and it has not been involved at any time previously in any case of smuggling or transportation of contraband gold.

2. On 30-8-1956 the assessed booked from Delhi one parcel of gold with zinc as ballast. The gold was in 32 pieces and the total weight was 457 tolas 1 masha and 3 rattis. The parcel of the gold was delivered to the Railways at Delhi for being carried to the petitioner's head office at Bombay. To forwarding note submitted to the Railway Authorities made it clear that the contents of the parcel were gold bars.

However, before the gold was actually transported officers of the Central Excise Department detained the parcel and took charge thereof at the Delhi Railway Station. This was on the evening of 30-8-1958. It appears to be common ground that on the same day officers of the Department visited the business premises of the petitioner in Delhi and all the relevant books of account and other papers of the petitioner were scrutinised and the relevant entries checked up and duly initialled. A statement of the agent of the Delhi branch of the petitioner was also recorded who stated that the goods were being sent to Bombay in order to avail of a difference of 8 annas per tola between the prices of gold at Delhi and at Bombay. The books of account of the petitioner and certain other relevant papers were, however, actually seized by the officers of the Department only on the 1st September, 1958.

3. Some time afterwards i.e. on 24-12-1958 the Assistant Collector of Central Excise issued a notice to the petitioner in the form of a memorandum. This notice stated that information had been received that the petitioner were engaged in sending to Bombay large quantities of gold believed to be smuggled and that further market enquiry had revealed that they were engaged in the purchase of smuggled gold and after changing its shape sending it to Bombay for disposal through the medium of railway parcels. It was stated that, acting on this information, one parcel booked by the petitioner to Bombay had been detained on 30-8-1958 which was found on examination to contain 32 pieces of gold weighing about 457 tolas. This gold, it was stated, was seized in the reasonable belief that it was smuggled from a foreign territory in disregard of the restrictions placed on its import and the zinc slab was also seized. The notice proceeded to state that further investigations were carried out which led the Department to believe that an offence had been committed under the Sea Customs Act and called upon the petitioner to furnish its Explanationn. The petitioner filed a detailed reply on 27-12-1958 challenging the respondents' contention that the gold had been seized in the reasonable belief that it represented smuggled gold. It explained that the gold represented purchases effected by the petitioner from as many as 12 parties on 30-8-1958 and that, in respect of each of the items of the purchase, there was full documentary evidence to support the petitioner's case.

4. On 7-3-1960, the Collector of Central Excise passed an order directing the absolute confiscation of 8 pieces of gold weighing 235-6-4 tolas under Section 19 read with Section 167 of the Sea Customs Act, 1878 and also imposed a personal penalty of Rs. 2000/-. The zinc ballast was also confiscated. The balance of the gold weighing 221 tolas was, however, ordered to be released. The order of the Collector starts with a reference to the information received from the Collector of Central Excise, Bombay that melted gold of contraband nature was being sent to Bombay by dealers of Delhi in pursuance of which necessary enquiries were made and it was learnt that M/s Daga Commercial Corporation was engaged in sending large quantities of gold to Bombay which was believed to be smuggled. It proceeded to say in paragraph 2, after referring to the fact that the parcel on examination was found to contain gold bearing markings of local refiners, that searches and investigations had been carried out by the respondents and that according to them the gold had not been properly accounted for and that the entries were made to cover the gold received through sources, other than normal trade channels and then proceeded to say : 'The above facts and the failure of the party to account for the gold properly led to a reasonable belief that the gold was smuggled into India from a Foreign Territory......... and as such the same was seized by the Customs for taking action under the Customs Law'. The order then proceeded to discuss the further proceedings in the case and then to a discussion of the evidence regarding the 8 pieces of gold which were confiscated. In respect of 101-6-4 tolas, the petitioner had pleaded that the goods had been purchased from one Ram Gopal who had sold the goods on behalf of one Bindraban. Ram Gopal was not produced but Bindraban's accounts were said to contain the necessary entries in respect of the sale to the petitioner. Bindraban was said to have melted old ornaments and got 132-4-2 tolas after refining but said to have sold 101-6-4 tolas to the petitioner. In regard to the another piece weighing 20-2-1/2 tolas the petitioner's case was that it has been purchased from Mahavir Prashad, a bullion merchant of Delhi. The transaction was confirmed by Mahavir Prashad but the broker through whom the sale was said to have been effected denied the transaction and Mahavir Prashad also admitted that there was no mention of dalali in his account books. Next came two items 20-6-3 and 24-4-5 tolas. The petitioner's case was that this had been purchased from M/s Jagadhar Mal Bhim Sen, Delhi through a broker Matadin. It was observed by the Collector that according to the books of the seller the goods had been sold through Banarsi Dass and not Matadin. That apart, it was also not clear why Banarsi Dass should have sold two lots on the same day and to the same purchaser. Lastly, the Collector considered 59-10-7 1/2 tolas. The petitioner stated that this had been purchased from L. Karam Chand Aggarwal of Ganga Nagar. This was also confirmed by the said party but the Collector found that, according to the Vendor, the item had been sold to the petitioner as commission agent and that commission had been paid to the petitioner for making the sale. The Collector, thereforee, inferred that the sale by L. Karam Chand Aggarwal must have been a different piece which was sought to be taken advantage of by the petitioner as a cover for transportation of another item of smuggled gold. In the above circumstances, the Collector came to the conclusion that the onus imposed by Section 178A of the Sea Customs Act had not been discharged by the petitioner in so far as it related to the four quantities (eight pieces) above specified. He, thereforee, passed the order of confiscation as mentioned earlier.

5. The petitioner preferred an appeal to the Central Board of Revenue. The memorandum of appeal was very detailed. In paragraphs 2 to 5 of the memorandum the petitioner dealt in detail with every one of the findings arrived at by the Collector and tried to show that the inferences drawn by the Collector were not only wrong but also contrary to the material on record. This appeal was preferred on 14-4-60. It was pending before the Central Board for some time. It appears that on 19-12-61 the Central Board forwarded two of the pieces which had been confiscated, to the India Government Mint at Alipore and called for an assay report. Two assay reports were submitted by the Mint both dated 19-3-62. The first report stated that the gold in one cut piece was 998.5 per mile, the silver and copper making up the rest was 1.0 and 0.5. The second report assayed the fineness of gold at 999.1, the silver and copper as 1.4 and 0.4 leading to the somewhat incongruous position that the total contents were 1000.9. The petitioner wrote both to the Government Mint and to the Central Board of Revenue pointing out the discrepancy in regard to the second of the above reports. It also offered to send to the Mint another piece of gold for analysis and asked for the charges thereforee. It also requested the Central Board to send the pieces of gold to the Government Mint at Bombay for analysis and assay result. But the Mint at Calcutta did not reply to the petitioner and the Central Board replied to the petitioner say that 'the analysis reports copies of which have been supplied to you by the Collector are quite clear and self-explanatory' and that there was no occasion for further analysis.

6. The appeal was disposed of by the Central Board of Revenue on 31-12-1963. The order of the Central Board toughed upon only two points. In the first place it was stated that the plea of the petitioner that the appellant's books having been taken over by the Customs immediately after the seizure, the petitioners did not have opportunity to manipulate the entries in the books or to persuade other people to make corresponding entries in their books to tally with the appellants' records was untenable. The Board rejected this plea observing that while this plea would have carried great weight if the books had been taken into custody immediately on seizure it was without force in the present case since the books had been seized only on 10-9-58. The second aspect touched upon by the order of the Central Board was that the gold on analysis had been found to have a purity ranging from 998.1 to 998.5 per mile. The Board observed : 'This high fineness cannot normally be expected in gold allegedly obtained from old ornaments, which is the story put up by the defense'. The Board also referred to one of the instances of purchase from Bindraban and stated that it was too much of a co-incidence that all the purchases effected by the petitioner were said to have been on 30-8-58 and further that Bindraban should have accounted for his personal transactions in his business accounts. The Board thereforee, rejected the appeal of the petitioner.

7. The petitioner preferred a revision petition to the Government of India which was rejected on 5-2-65. Thereupon the petitioner approached this Court by filings CW 299/65. This Court by its order dated 21-7-70 quashed the order of the Government of India dated 5-2-65 on the ground that the order was not a speaking one and directed the Government to dispose of the revision petition afresh after giving the petitioner a reasonable opportunity of being heard. Thereafter the petitioner was given a personal hearing and the revision was again disposed of by the order dated 19-10-1970. By this order the Government of India upheld the confiscation of eight pieces of gold but cancelled the penalty on the ground that there was no evidence to show that the petitioners had actually imported the contraband gold or had been involved in actual import thereof. In its revisional order the Central Government considered the observations in the opening sentences of the adjudication order passed by the Collector and came to the conclusion that there was reasonable belief for the seizure in the minds of the offices even before the gold was seized. The Government strongly relied upon the assay report of the Mint because in its opinion the local refineries were not capable of refining fold to the purity certified by the said Mint and gold of such purity could only be got from imported gold and not by remitting old jewellery. The petitioner's contentions in respect of each of the pieces confiscated was considered by the Central Government but it came to the conclusion that the petitioners had not been able to prove clearly the proper acquisition of the impugned gold and had not discharged the burden cast on it under Section 178(A) to show that the gold was legally imported. The confiscation of gold was upheld as a consequence. In the result the revision application was dismissed except for the relief in respect of penalty already referred to.

8. The petitioner has thereupon come to this Court again with prayers for the issue of a writ of certiorari to quash the order of the Government of India dated 20-10-1970, in so far as it confirms the order of the Central Board dated 31-12-63 and the issue of a writ directing the respondents to release the gold pieces weighing 235-6-4 tolas in question and the zinc slab weighing 8 seers.

9. On behalf of the respondents no counter affidavit has been filed and the writ petition has thereforee to be disposed of in the light of the averments made in the writ petition and the findings in the various orders passed by the authorities.

10. On behalf of the petitioner it was contended that the confiscation of 8 gold pieces was totally unjustified for a number of reasons. In the first place it was submitted that in the present case there were no circumstances before the officers who seized the gold, at the time of seizure, on the basis of which they could have entertained a reasonable belief that the gold bars in question were smuggled gold. It is pointed out that the petitioner was a bullion merchant and that frequently in the course of business the petitioner was consigning goods from Delhi to Bombay. It is submitted that the consignment was openly made and it is also common ground that the gold bars did not have any foreign markings thereon. There were thus no attendant circumstances from which the Department could have reasonably drawn an inference that all was not well. On the other hand a consignment by a gold merchant with a good reputation without there being anything to suggest that gold was smuggled gold did not attract the provisions of Section 178A. Secondly it is submitted that the orders of confiscation and the orders confirming the same were inconsistent and were also passed on no material. It is pointed out that according to the petitioner he had purchased 32 pieces of gold on 30-8-58 through 12 transactions and that the purchase of 24 of these pieces had been accepted. The circumstances thereforee that the transaction were entered into on the same date could not lead to a contrary inference so far as 8 pieces were concerned. Secondly the Central Board of Revenue had unreasonably rejected the request of the petitioner in regard to the assay report received from Alipore and also his request for clarification and a second test. The Central Board also did not inform the petitioner that it proposed to draw an inference from the fineness of the gold as per assay report of the Mint. Moreover, there was no material placed on record which entitled the Department to draw the inference that gold of purity or fineness of 998 or 999 per mile could not be obtained by melting old ornaments but could only be got from imported gold. The authorities have completely over-looked the fact that all the books of the petitioner had been initialled on the same day as the seizure and that the petitioner had absolutely no opportunity of manipulating its books. Finally, even on merits, there was no tenable reason on the basis of which the respondents could have disbelieved the entries in the petitioner's books of account, the entries in the books of account of various sellers and the affidavits that were filed by them and proceeded to reject the detailed Explanationn given by the petitioner at every stage.

11. On the other hand learned counsel for the respondents sought to support the orders of the respondents in various ways. He submitted that the orders clearly show that there was information before the authorities on the basis of which the goods were detained. He points out that there is no obligation on the part of the respondents to disclose their source of information and that the fact that there was such information is fully borne out by the memorandum issued by the Assistant Collector as well as by the appellate and revisional orders. He submitted thereforee that this was a case in which the conditions of Section 178A were fulfillled. He also contended alternatively that even assuming as contended for by the petitioner that the reasonable belief that the goods represented smuggled goods came only much later there was nothing wrong in the present case. He submitted that the seizure of the goods at the Railway Station was only in the nature of a detention pending enquiries and that a notional seizure within the meaning of law can be said to have taken place at the point of time when after making enquiries and looking into the accounts the Department prima facie came to the conclusion that there was no reasonable Explanationn for the goods in question. He, thereforee, submits that the contentions of the petitioner that the primary requirement of Section 178A were not fulfillled could not be accepted. Once it is found that the goods had been seized on the reasonable belief that they constituted smuggled goods, learned counsel submits, the burden completely shifted to the petitioner to show that the goods did not constitute smuggled gold. The onus was on the petitioner to establish this fact conclusively and not by merely denying or refuting the findings given by the authorities. Counsel submits that the petitioner's Explanationn in respect of each one of the alleged purchases has been carefully examined both by the Collector and the Central Government and that since it was only a case of a decision of probabilities, the conclusion of the respondents that the goods had not been shown to have a local origin was only a finding of fact which should not be interfered with by this Court. Regarding the assay report of the Alipore Mint, Mr. Chandrasekharan submits that it was fully open to the petitioner to have led evidence to contradict the assay report or to show that such fineness could be obtained even by melting gold ornaments. He points out that the Central Board had furnished the petitioner with a copy of the assay report and submits that the petitioner had not discharged the onus of repudiating the contents of this analysis. Finally, learned counsel contends that when all is said and done this is merely a case of a conclusion to be arrived at by the appropriate authorities. The adjudicating authority, the appellate authority and a further revisional authority having examined the merits on the Explanationns given by the petitioner, he contends that it is not open to this Court in writ jurisdiction to review or reweigh the evidence as if the matter were in appeal and to come to a contrary conclusion. He submits that the orders must be looked at as a whole and that in the absence of any legal infirmity in the proceedings, the orders of the authorities should not be interfered with and the writ petition should be dismissed.

12. It will be seen that the controversy between the parties centres around two principal contentions. The first is whether before the seizure was effected there was reasonable belief in the mind of the seizing officers that the goods in question represented smuggled goods. The second is as to whether the conclusion arrived at by the authorities can be said to be based on no material or based on irrelevant material or to have been arrived at by ignoring relevant and admissible material already on record or to be perverse or unreasonable in the light of the facts brought on the record. So far as the first question is concerned, the petitioner's contention is mainly based on findings of the Collector of Central Excise. Learned counsel for the petitioner drew my attention to the decision of the Bombay High Court in M. G. Abrol and another v. Amichand Vallamji and others, : AIR1961Bom227 and also the decision of the Gujarat High Court in Bapalal Khushaldas Gosalia v. R. Prasad, Collector of Central Excise Basora and another, AIR 1965 Gujar 135. In both these decisions it has been pointed out referring to the language of Section 178A and the context in which the provision was introduced that there should be a reasonable belief at the time of the seizure of the goods and that it is not sufficient if subsequent circumstances are discovered or are found which may lead to a conclusion that the gold in question is smuggled gold. It has also been pointed out that the reasonableness of the belief of the officer effecting the seizure would be the subject matter of an investigation by an adjudicating officer and that before the adjudicating officer adjudicates under Section 178A he has to satisfy himself that the seizure was made in the reasonable belief that the goods were smuggled goods. In order to satisfy himself that there was such reasonable belief, the adjudicating officer must examine the grounds upon which the said belief was said to have been entertained at the time of the seizure by the seizing authority and then come to a conclusion. Relying on these observations, learned counsel placed considerable reliance on the fact that in the present case the adjudicating authority namely the Collector of Central Excise had examined the circumstances and that, according to him, the circumstances which led to the reasonable belief that the goods was smuggled as set out in paragraph 2 of his order consisted of the results of the search and seizure in the petitioner's premises, the examination of the account books and the enquiries that were made in that occasion. Learned counsel points out that all these events were subsequent to the seizure and that thereforee the very finding of the adjudicating authority that reasonable belief had been entertained only at this stage was fully in support of the petitioner and that an inference should be drawn there from that there was no such reasonable belief entertained at the earlier stage when the goods were seized at the railway station. I have already pointed out that the learned counsel for the respondents has attempted to get over these objections by contending that the seizure must be taken to have occurred not at the railway station when the goods were merely detained but, nationally, at a point of time, after all the enquiries had been completed. I am not very much impressed by this contention. The 'detaining' authority certainly seized the goods and the memorandum issued by the Assistant Collector on 24-12-1958 clearly says so. It is thereforee not possible to accept the contention that no seizure took place at the railway station and that it took place only subsequently. But this is an alternative contention put forward by the learned counsel. He also vehemently argued that in the present case there was on record information justifying the seizure at the railway station itself and I am inclined to agree with this contention. There is no doubt a certain amount of difficulty in this case because the respondents have not filed the counter affidavit nor have the records been produced before this Court. There is thereforee no first-hand information before me to indicate the precise circumstances in which the seizure took place. But I am of opinion that there is enough on record to justify the conclusion that the seizure was made only in the reasonable belief that the goods constituted smuggled goods. The seizing officer in his notice dated 24-12-1958 clearly states at the outset that information had been received regarding the transportation of what was believed to be smuggled gold from Delhi to Bombay and that the petitioners were also engaged in such transactions. The memorandum also makes it clear that a reasonable belief was entertained regarding the nature of the goods even at the point of time when the goods were seized at the Railway Station. It is true that the mere statement of this seizing authority is not sufficient and that it is open to the adjudicating and appellate authority to come to a contrary conclusion if necessitated by the facts. But at the same time, prima facie, there is no reason to disbelieve the mention made in the memorandum dated 24-12-1958 that certain information had been received. When the matter went before the adjudicating authority the Collector also does not negative this position. The Collector's orders also clearly mentions that some information had been received on the basis of which the seizure had been effected. I also find that the statement made in the Collector's order is not a mere repetition of what was contained in the original memorandum. The memorandum merely asserts that some information had been received but the Collector clearly observes that in pursuance of information received from the Collector, Central Excise, Bombay that melted gold of contraband nature was being sent to Bombay by the dealers of Delhi and that necessary enquiries had been made from which it has been learnt that the petitioner had been engaged in sending large quantities of gold to Bombay which was believed to be smuggled. This clearly shows that the Collector had looked into the record and that he had found that information had been received to the effect above-mentioned and he also states that it was acting on this information that the goods had been seized. No doubt, while proceeding further, in his order he makes an observation that the further enquiries also led to the reasonable belief that the gold was smuggled gold. In my opinion this does not detract from the findings of fact contained in the order of the Collector of Central Excise that information had been received which led to the seizure in question. Even assuming that the Collector came to the conclusion that the reasonable belief have been entertained subsequently that was a matter on which he could be corrected by the appellate, or revisional authority. This has been done in the present case not by the Central Revenue but by the Central Government. Though the Central Board of Revenue has not touched upon this point in its order, the Central Government has given a clear finding in this regard in paragraph 4 of its order. In these circumstances I am of opinion that though it is true that there should be some information and not mere suspicion on the basis of which goods are seized, such information existed in the present case. It is pity that the respondents have not substantiated this by filing the counter affidavit but in my opinion the orders of the Assistant Collector as well as the Central Government clearly bring out the point at issue. I am thereforee unable to accept the contention that the goods have been seized without the requirements of Section 178A being fulfillled.

13. So far as the second point in controversy is concerned, I have come to the conclusion, after examining the matter carefully, that this is a case in which the conclusion of the respondent authorities cannot be supported as it is based on no evidence and is also a conclusion which no reasonable person could draw having perused the record. I have earlier referred to the fact that when the petitioner filed an appeal to the Central Board from the order of the Collector it had explained every one of the points on which the Collector had given a finding against the petitioner. As rightly pointed out by the petitioner there were 12 transactions put through by the petitioner on 30-8-1958. Out of these which related to 32 pieces, transactions in respect of 24 pieces have been accepted to be genuine. It is, thereforee, not possible to draw any inference adverse to the petitioner from the mere circumstance that the transactions with which we are concerned had all been effected or shown in the books on 30-8-1958. The second important circumstance in the present case is that immediately the seizure was effected the account books of the petitioner were all initialled and completely checked. The petitioner had made clear averments to this effect (See pages 127, 137 and 165 of the paper book). This also has been repeated without any adverse comments by the Central Government in its order. The position is thereforee clear that the books of the petitioner were initialled on 30-8-1958 itself. It was, thereforee, not possible for the petitioner to have made any manipulated entries in the books after the seizure took place. I think learned Counsel for the petitioner is right in his criticism of the order of the Central Board of Revenue in this regard. The Board observed that the petitioner's plea that the books could not have been manipulated might have carried weight if the books had been taken into custody immediately. The Central Board was apparently of opinion that if the books had been taken into custody immediately the case of the petitioner should be accepted. But, in the present case, the circumstances were equally efficacious for this purpose, for though the custody of the books was taken by the Department only on September 1, 1958, all the relevant entries had been checked and initialled on 30-8-1958 itself. It was thereforee not possible for the appellant to have made any entries in the books after the seizure had taken place. That apart, one further important circumstance in the present case is that everyone of the items of purchase have been explained and fully proved by documentary evidence on the part of the petitioner. I have earlier briefly referred to the circumstances attending each of these transactions and also drawn attention to the Collector's criticism of the material produced by the petitioner. To take for example the sale or purchase by the petitioner from Bindraban the criticisms made against the petitioners are - (a) that Ram Gopal who is said to have sold the gold was not produced; (b) that there was no reason why Bindraban should make entries regarding the sales in his books of account; and (c) that there was a discrepancy in regard to the quantity sold by Bindraban. The petitioner had explained that through Ram Gopal had effected the sale to the petitioner it was on behalf of Bindraban and that Ram Gopal was not being produced because he had left the service of Bindraban. There is nothing in the circumstances of the case which would justify a disbelief of the entire sale because merely the Ram Gopal was not produced particularly because Bindraban admits the sale and there are entries in his account books regarding the sale of the gold. Similarly, I am unable to find any relevance in the criticism that Bindraban need not have made entries in his business accounts regarding the sale of the gold, when he was not a dealer in gold himself. It overlooks that even though Bindraban may not have been a dealer in gold, he was the owner of a flour mill and that he will have to account to the Income-tax Authorities for the sale proceeds which had been utilised for the business. Again the petitioner explained that though Bindraban had got 130 tolas by refining jewellery he sold only 102 tolas to the petitioner because he was only in need of Rs. 10,000/- on that particular date and that more than that was unnecessary. There is no reason to disbelieve this Explanationn but that quite apart in respect of this sale as well as all the other sales the salient fact which stands out is that each one of the sales is fully supported by entries in the books of account of the persons from whom the purchases are said to have been made. There has been no examination of these persons. These persons are further said to have got the ornaments melted in a refinery and evidence regarding this aspect of the matter had also been placed on record. There is no evidence or material brought on record by the respondents which would throw any suspicion or doubts on these aspects of this matter. What they have relied on is some small discrepancies here and there which are not really material, substantial or clinching regarding the non-genuineness of the transaction. For example, in the case of Jagadhar Mal Bhim Sen the Collector's criticism was that according to the petitioner the dalal was Matadin while the name of the dalal which appeared in the books of seller was Banarsi Dass. This point was met by the petitioner in his memorandum of appeal to the Central Board where it pointed out that the two persons Matadin and Banarasi Dass were brothers who were carrying on a firm and an affidavit was also filed in this connection. This has not been referred to by the authorities. It is unnecessary to deal with the matter at length because it is not a question of appreciating the weight of the evidence produced by the petitioner. On the other hand this is a case in which clear and conclusive evidence placed by the petitioner supported by entries in its own books which could not have been manipulated subsequent to the seizure and also supported by the entries in the books of the various other dealers and the refinery had been totally ignored and unjustifiable rejected. It is perhaps possible, theoretically, that all these entries could have been made in concert by all these persons even before the seizure was effected, in anticipation of a possible seizure but that would be purely in the realm of surmise and conjecture. The petitioner's clear case is that he has purchased all these goods from the various persons who had in turn got it by having certain ornaments melted in refineries. All the alleged sellers accept the position. Their account books support the transactions. The evidence of the refineries has also been placed on the record. In the teeth of such cogent and conclusive evidence I am unable to see anything on the basis of which any reasonable person could draw an inference that the purchases had not been satisfactorily explained by the petitioner.

14. It remains to refer one more aspect of the matter and that is regarding the fineness of the gold. The Collector has not referred to this at all. It is, for the first time, the Central Board which obtained the assay report. All that it pointed out to the petitioner was that the assay report had indicated a fineness of 998.5 in one case and 999.1 in the other case. There was no suggestion at any point of time that the Central Board was going to draw from this circumstance an inference that gold of such fineness could not have been obtained legally and must thereforee represent smuggled gold. The petitioner immediately pointed out certain discrepancies in the assay reports and indeed one of them clearly contains an absurdly on the face of it. The petitioner also asked for a second test by some other Mint but this request was rejected. But even assuming that all these circumstances are not enough, it is not quite clear from what material the respondents have drawn the inference that the gold of the fineness indicated must only have been smuggled gold. The Central Government has observed in its order that gold obtained by melting ornaments could not have such fineness or such a decree of purity. But no material for drawing this inference appears to have been placed on record except perhaps the experience of the officers concerned. It has been pointed out in certain judicial decisions that such a conclusion must be based on material. My attention has been drawn to two decisions : Rd. Shamlal Sen Private Ltd., and others v. Additional Collector of Customs and others, : AIR1967Cal239 and the unreported judgment of the Bombay High Court in Appeal No. 153 of 1975 dated 9-2-1979 : where such an inference has been rejected as being nothing more than a mere ipsi dixit of the adjudicating authority. In the present case also there seems to be no material on the basis of which an inference could have been drawn by the respondents that merely because the gold concerned was of a high degree of purity it could not have been gold obtained by melting ornaments but could only have been smuggled gold.

15. In the circumstances I am of opinion that this is a case in which the conclusion of the adjudicating authority as well as the appellate and revisional authority that the gold was smuggled gold had been arrived at by disregarding material evidence and thus contrary to the entire material on record. I am, thereforee, of opinion that the writ petition should be allowed. I direct accordingly. A writ of certiorari will issue quashing the orders dated 19-10-1970, 31-12-1963 and 7-3-1960 in so far as the eight pieces of gold and the zinc block are concerned. The rule is made absolute. But, in the circumstances of the case, I make no order as to costs.


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