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Prem Raj Madan Lal Aboti and anr. Vs. the Collector of Central Excise and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 1202 of 1969
Judge
Reported inILR1977Delhi779
Actsdefense of India (Amendment) Rules, 1962 - Rule 126H(2); Gold Control Rules, 1963 - Rule 126L
AppellantPrem Raj Madan Lal Aboti and anr.
RespondentThe Collector of Central Excise and ors.
Advocates: B.D. Sharma and; C.K. Mahajan, Advs
Cases ReferredGian Chand v. The State of Punjab
Excerpt:
defense of india (amendment) rules, 1963--rules 126h(2) (d), 1261(3) & 126l(16)--gold control rules, 1963--rules 126l, 126l(16) & 126l(b)--seizure of gold under--suspecting mind essential for imposing penalty--existence of suspicion a jurisdictional fact.; a father and son were arrested on alighting from a train, and gold chips were found on the son's person. the custom department confiscated the gold and levied a penalty on the father under the customs act. the excise department then mulcted both with a penalty under the defense of india (amendment) rules, 1963 incorporating the gold control rules, 1963. against the order they resorted to this court with the above writ petition, after vainly trying statutory remedies :; (1) if there is no suspicion in the mind of the authorised..........the defense of india act 1962. the said rules were amended in 1963. part xii a dealing with the gold control rules 1963 was inserted.(3) by an order dated 6th january, 1965 the collector of central excise poona passed an order imposing a penalty of rs. 4000.00 on the father, petitioner no. 1, and rs. 1000.00 on the son, petitioner no- 2. as regards the seizure of gold he said that no order of confiscation was necessary as the gold in question had already been confiscated under the assistant collector, central excise nasik's order dated august 26, 1964.(4) the petitioners went in appeal to the gold control administrator. he dismissed the appeal on september 16, 1965. the petitioners preferred a revision to the central government. that also failed on august 6, 1969. on november 5, 1969,.....
Judgment:

Avadh Behari Rohatgi, J.

(1) Oral on March 27, 1964,the two petitioners, father and son, when they were alighting from a train at J

(2) On October 12, 1964, the Collector of Central Excise issued a notice to the petitioners saying that since they had acquired and possessed the aforementioned non-ornamental gold in contravention of Ru.le 126H(2)(d), and/or 1261(3) of the defense of India (Amendment) Rules, 1963 at Bombay on 27th March, 1964 they should show cause as to why a penalty should not be imposed on them under Rule 126L(16) of the said Rules.

THEdefense of India Rules 1962 were framed under the defense of India Act 1962. The said Rules were amended in 1963. Part Xii A dealing with the Gold Control Rules 1963 was inserted.

(3) By an order dated 6th January, 1965 the Collector of Central Excise Poona passed an order imposing a penalty of Rs. 4000.00 on the father, petitioner No. 1, and Rs. 1000.00 on the son, petitioner No- 2. As regards the seizure of gold he said that no order of confiscation was necessary as the gold in question had already been confiscated under the Assistant Collector, Central Excise Nasik's order dated August 26, 1964.

(4) The petitioners went in appeal to the Gold Control Administrator. He dismissed the appeal on September 16, 1965. The petitioners preferred a revision to the Central Government. That also failed on August 6, 1969. On November 5, 1969, the present writ petition was filed.

(5) The point of law in this case is this. Gold had been seized and confiscated once by the Assistant Collector of Customs under Section 111 of the Customs Act. He had also imposed a penalty of Rs. 1000.00 under Section 112. The seized gold, thereforee, stood forfeited to the government. It had become the absolute property of the Government. When the Customs authorities seized the gold the petitioners lost possession. This was the end of those proceedings.

AFTER45 days or so the Collector of Central Excise started proceedings under Section 126L(16) of the Gold Control Rules, 1963. Could he do so? This is the question.

(6) Now Rule 126L and 126L(16) read :

'126L.Power of entry, search and seizure, to obtain information and to take samples--Any person authorised by the Administrator by writing in this behalf may-

(A)enter and search any refinery of which the refiner or the establishment of a dealer who is licensed under this Part;

(B)seize any gold in respect of which he suspects that any provision of this part has been or is being, or is about to be, contravened, along with the package, covering or receptacle, if any, in which such gold is found and thereafter take all measures necessary for their safe custody...................

(16)Any person who in relation to any gold does or omits to do any act which act or omission would render such gold. liable to confiscation under Rule 126M, or abets. the doing or omission of such an act shall be liable, in addition to any liability for any punishment under this, Part to a penalty not exceeding five times, the value of the gold or one thousand rupees, whichever is more.'

THESEare the relevant provisions. Rule 126L(b) empowers a. person authorised by the Administrator in writing to 'seize any gold in respect of which he suspects that any provision of this Part has been, or is being, or is about to be, contravened'. thereforee, at the time of seizure the authorised person must suspect that the gold which he is going to take into his possession and custody contrary to the wishes of the owner of the property-and this is what seizure means- contravenes the relevant Gold Control Rules, 1963. If he has no such suspicion at that time he has no power to seize gold under Rule 126L. Rule 126L(16) comes into operation after the gold has been so seized. That Rule gives power to the authorities to impose penalty not exceeding five times of the gold or Rs. 1000.00 whichever is more.

(7) thereforee, it comes to this. If there is no suspicion in the mind of the authorised person he cannot seize gold under Rule 126L(b). If he does not seize gold with a suspecting mind, he cannot impose a penalty. Rule 126M puts the matter beyond doubt. It opens with the words ;

'126M.Confiscation of gold seized and adjudication-(1) Any gold seized under Rule 126L, together with the package, covering or receptacle, if any, in which such gold is found shall be liable to confiscation.'

(8) In this case the Assistant Collector of Customs in his order dated August 26, 1964 had clearly said this :

'THEfour gold chips and the cloth belt were seized in the presence of panchas on 27-3-1964 for contravention of the provisions of Foreign Exchange Regulation Act, 1947 read with the Customs Act, 1962 in the reasonable belief that the gold was of smuggled origin.'

(9) So it would appear that the gold was seized under the Foreign Exchange Regulation Act and the Customs Act. It was never seized under the Gold Control Rules of 1963. The authorised officer did not harbour any suspicion. thereforee, the condition precedent was absent for its seizure and confiscation under the Gold Control Rules. No penalty could be imposed on the petitioners under Rule 126L(16) as no gold was seized from them under Rule 126L(b) and 126M. This is my conclusion.

(10) Mr. Mahajan, on behalf of the respondents says that the petitioners were guilty under the Gold Control Rules as they did not declare the gold on their person. That question in my opinion does not arise. The power to impose a penalty springs from the seizure of the gold. But gold has to be seized when the officer entertains a suspicion. It is essential that he must entertain suspicion on the occasion on which the power of seizure is sought to be exercised. If there is nothing to give rise to suspicion in his mind he cannot seize gold. Suspicion he must harbour. Suspicion is a condition of the mind. It is,a mental operation. This is a condition precedent for exercise of power under Section 126L(b). This is a jurisdictional fact.

(11) Suspicion is a state of mind. As Bowen L. J. once said in acelebrated passage, 'the state of a man's mind is as much a fact as the state of his digestion. It is true that it is very difficult to prove what the state of a man's mind at a particular time is, but if it can be ascertained it is as much a fact as anything else'. (Edgington v. Fitz Maunce (1885) 29 Ch. D. 459. The state of mind cannot be seen or heard but can be inferred or presumed.

(12) Counsel next argued that gold was not seized under the particular provisions of any Act or Rules as is evident from the panch- nama. That I think would make the case atill worse for the authorities. As I read rule 126L, at the time of the seizure of the gold, namely, on that particular occasion, the authorised officer must harbour a suspicion that the provisions of the Gold Control Rules were being contravened. It must be a seizure under the Rules. A seizure under a different Act is not a seizure under the Rules. (See: Gian Chand v. The State of Punjab, (1962) Supp. (1) Scr 364. The very essence of seizure under the Rules is a suspecting mind. This condition precedent, this jurisdictional fact, being absent no action could be taken against the petitioners by the authorities under the Gold Control Rules, as I have already said.

(13) For these reasons I would allow the writ petition and quash the orders of the respondents passed under Rule 126L(16) of the Gold Control Rules, 1963 Part Xii A of the defense of India Rules. The parties are, however, left to bear their own costs.


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