Gunwant Lal Godawat Vs. Collector of Customs - Court Judgment

Excerpt:
1. in the captioned appeal, the appellants have challenged the confiscation of 85 silver bars recovered, among other items, after digging operations in the premises of the appellants.2. the facts of the case in brief are that digging operations were conducted in the premises of the appellants and 85 silver bars in dispute were recovered, among other items. proceedings were drawn up in respect of other items. the appellants have already agitated the issue before the tribunal and orders have since been passed. in the instant case, the appeal concerns with the confiscation of 65 bars of silver recovered on 8-8-1965 and further 20 bars of silver recovered from the residential premises on 3-8-1965.3. shri harbans singh, the ld. advocate appearing for the appellants, submits that, in all, this.....

Judgment:
1. In the captioned appeal, the appellants have challenged the confiscation of 85 silver bars recovered, among other items, after digging operations in the premises of the appellants.

2. The facts of the case in brief are that digging operations were conducted in the premises of the appellants and 85 silver bars in dispute were recovered, among other items. Proceedings were drawn up in respect of other items. The appellants have already agitated the issue before the Tribunal and orders have since been passed. In the instant case, the appeal concerns with the confiscation of 65 bars of Silver recovered on 8-8-1965 and further 20 bars of silver recovered from the residential premises on 3-8-1965.

3. Shri Harbans Singh, the ld. Advocate appearing for the appellants, submits that, in all, this case concerns with confiscation of 85 slabs of silver weighing 2910.150 kgs. He submitted that the case has a chequered history in as much as digging operations in the premises of the appellant continued for about 2 months and gold, gold coins, silver bars/slabs, including the present 85 slabs of silver were recovered.

These 85 silver slabs were deposited with the District Collector of Chittore. The District Collector in his order held that these silver bars are not covered by the Treasure Trove Act. The appellants filed an appeal before the Rajasthan State Revenue Board and that the Revenue Board held that since the silver bars were 30 to 50 years old, they did not come under the category of the items of Treasure Trove. The appellants also filed a writ in the Hon'ble Rajasthan High Court which also held that the silver bars/slabs were 30 to 50 years old and that they were not goods coming within the purview of the Treasure Trove Act. The ld. Counsel submitted that in the meantime, the Wealth Tax Officer had also observed that the silver bars which were declared by the appellants in their wealth tax returns were 30 to 50 years old. For arriving at this conclusion, the Id. Counsel submits, the Wealth Tax Officers relied on the evidence in the form of receipts etc. submitted by the Appellant. He submits that these documents showed that the appellants had transferred silver bars/slabs from Bombay to their Chori Sadri premises during the years 1934 to 1939. The ld. Counsel submitted that during the material period, silver was not a notified item and, therefore, the onus was on the Department to prove that the goods were imported into India during the currency of the Customs Act, 1962. The ld. Counsel submitted that no evidence has been brought on record to show that the Department had discharged its onus. He submitted that some of the silver slabs, no doubt, bore foreign markings; but foreign markings alone did not prove that the goods were smuggled. In support of his contention, the ld. Counsel submitted that the Hon'ble Calcutta High Court in the case reported in AIR 1952 (Cal.) p. 789, held that foreign markings alone is not sufficient proof for proving that the goods were smuggled. The ld. Counsel submitted that similar view was expressed by the Hon''ble A.P. High Court in the case of Innovation Secunderabad and Anr. v. Central Board of Customs and Excise, observing that merely because the petitioner is unable to prove his case with respect to the notified goods or merely because the notified goods are found liable to confiscation on account of violation of one or the other provisions of Chapter 4A of the Customs Act, 1962, it does not follow that the same category of goods are also smuggled and are also liable to confiscation. The ld. Counsel submitted that in their case, silver was not notified goods during the material period and, therefore, the rigours applicable in respect of notified goods cannot be followed in respect of the goods which are not notified.

4. The ld. Counsel submitted that this Tribunal in the case of Harvinder Singh Katra (sic) v. Collector Customs, Bombay, reported in 1986 (26) E.L.T. 792,, observed that "even if it is assumed that the goods were of foreign origin, that itself would not be sufficient to order confiscation in the absence of clear evidence that the goods were smuggled goods." The ld. Counsel submitted that the Department was simply carried away by the foreign markings on the silver slabs and has not adduced any evidence to prove that the goods were smuggled into the country. The ld. Counsel also referred to the decision of this Tribunal in the case of Collector of Customs v. Jagdish Chandra Laxidas Sharma, reported in 1988 (37) E.L.T. 358 wherein the Tribunal observed that "in the whole of the Act or in the Rules made thereunder, the expression 'smuggled goods' is not defined. The goods were considered as smuggled goods if their import or export or their attempted import or export was without payment of duty or in violation of restrictions or prohibition relating to the entry into or out of India." The ld. Counsel submitted that carrying foreign markings alone does not prove that the silver in question was smuggled unless the Department has adduced any evidence to prove that duty was not paid on the silver slabs or the silver slabs were imported against any restrictions.

5. The ld. Counsel also cited and relied upon the decision of this Tribunal in the case of Hindustan Bearing Corporation v. Collector Customs, reported in 1990 (50) E.L.T. 91. In this case, the Tribunal held that "the mere fact that the goods were of foreign in origin is not sufficient to hold that they are smuggled goods. The circumstances that the consignee firm was fictitious and that the appellants could not name the broker, may at best create suspicion against the appellants. Suspicion, however strong, cannot take the place of proof.

The Department has not discharged the initial burden cast on the department on the facts and circumstances of the case, it is held that the burden is not shifted on the appellant to prove that these are not smuggled goods. In such circumstances, the impugned order is set aside and the appellants are entitled for consequential relief." The ld.Counsel submitted that this judgment of this Tribunal very clearly brings out that the onus is on the Department to prove the goods are smuggled and that foreign markings on the goods is not conclusive proof that the goods were smuggled into the country nor is the burden shifted to the appellants to prove that duty was paid on the goods and no violation or infringement of any Act or rule was done.

6. The ld. Counsel also submitted that the only circumstantial evidence on which the Department has placed its reliance was that the goods bore foreign markings. He submitted that as against this, the appellants have produced evidence that the silver was acquired during the period 1934 to 1939 and that this fact has been so recognised by the ld.District Collector, Chittore; the State Board of Revenue, Rajasthan and the Hon'ble Rajasthan High Court in addition to the findings of the Wealth Tax Officer. The ld. Counsel contended that the circumstantial evidence must be compatible to the guilt of the accused and totally in-compatible with the innocence of the person. In support of his contention, the ld. Counsel cited and relied upon the decision in the case of Bachcha Prasad v. Collector of Customs, reported in 1988 (37) E.L.T. 269. The ld. Counsel also cited and relied upon the decision of the Tribunal in the case of C.C.E., Allahabad v. Anoop Kumar Agarwal, reported in 1997 (91) E.L.T. 63, wherein the Tribunal held that "the burden of proof about the smuggled nature of the goods where the goods are not notified under Section 123 of the Customs Act, is on the Department to prove the smuggled nature of the goods." 7. Summing up his arguments, the ld. Counsel submits that the Department has not brought any evidence on record to prove the smuggled nature of the 85 bars/slabs of silver and, therefore, prayed that the appeal may be allowed and the silver released to its owners.

8. Countering the arguments of the ld. Counsel, Shri P.K. Jain, the ld.SDR, submits that a lot of reliance is placed on the order passed by the Wealth Tax Officer. He submits that the appellants had submitted wealth tax returns for the year 1958; that in these returns, the appellants had not disclosed that they had these 85 silver bars. He submits that this clearly leads to the conclusion that the appellants did not have these 85 silver bars when they filed wealth tax returns for the year 1958-59. The ld. SDR submitted that the appellants have relied that these silver bars were obtained by them during the years 1934-1939. He submits that the documents produced by the appellant before the Wealth Tax Officer are not relatable to the goods and, therefore, the contention cannot be accepted. The ld. SDR submitted that admittedly, 85 silver slabs/bars had foreign markings. In the absence of any conclusive proof, their acquisition before 1962 is not established and since the allegation is that the said 85 bars of silver have been imported into India in contravention of restrictions imposed under the Government of India Notification No. 12(II) F 1/48, dated 25-8-1948 as amended, issued under Section 8(1) of FERA, 1947 read with Section 11 of the Customs Act, 1962 and since the Appellants have not proved conclusively that these silver bars were actually procured by them before the enactment of Customs Act, 1962 and, therefore, the lower authorities have rightly confiscated the goods absolutely. He reiterated the findings of the ld. Collector in the impugned order.

9. Heard the submissions of both sides. We find that the admitted position is that 85 silver bars/slabs bore foreign markings. The question, therefore, arose whether foreign markings alone is sufficient proof to show that the goods were smuggled into the country. We have perused the case law cited and relied upon by the appellants. We find that there are two contentions viz. the first was that these 85 silver bars/slabs were obtained at least 30 to 50 years before the date of seizure. This contention is supported by the decision of the District Collector, Chittore, the Revenue Board of Rajasthan State Government and the Hon'ble Rajasthan High Court. But the Hon'ble Rajasthan High Court has relied for this purpose on the findings of the Wealth Tax Officer. The second contention is that the Department has not brought on record any evidence to prove that the goods had been brought into the country in violation of the restrictions or prohibition of Rules/Acts and/or that they have not paid duty. We find that there is force in the argument of the appellants, both on circumstantial evidence of procuring the goods 30 to 50 years before the date of seizure and also that the foreign markings alone is not a conclusive proof to prove that the goods were smuggled into the country. We note further that during the material period, silver was not a notified item and, therefore, the onus to prove that the confiscated silver slabs were smuggled into the country was on the Department. The Department has not brought on record any evidence to prove that the silver was brought into the country violating the restrictions or prohibitions of law and/or without payment of duty.

10. In view of the above findings and the case law cited and relied upon by the Appellants, we hold that the respondents have not been able to make out a case. In the result, the impugned order is set aside in respect of these 85 Silver slabs/bars and the appeal is accordingly allowed with consequential relief, if any, in accordance with law.