# COLLECTOR OF CUSTOMS, MADRAS AND ORS v. D BHOORMUL

- **Citation:** [1974] 3 S.C.R. 833
- **Court:** Supreme Court of India
- **Decided:** 1974-04-03
- **Bench:** M. H. Beg, R. S. Sarkaria
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/collector-of-customs-madras-and-ors-v-d-bhoormul-6091
- **Pages:** 14

## Headnote

833
Sea C11sto1ns Act, 1878, Sec. 167(8_)--Irnports 11nd
&pons Control Act,
1947-Sec. 3(2)-Confiscation
of
gi:>ods--Goods
acquired
jrom
illegally
i1nported stocks-Burden of ptoo/, how discharged by tlie DepartmtlJl-lndian
Evidence Act, Sec. 106---Conflicting and incredible-account by alleged owner
of facts (regarding iniportation and owner.ship) within Iii& per.tonal knowledgeHow far co11duc1 of 1lie alleged owner determinatii·e of legal inferenct regard·
ing smuggled nature of goods.
The preventive officers of the Customs Deptt. recovered from the shop of
one Baboothmull ten packa8es containing imported goods, such as fountain peos.
hair clippers, razor sets, etc. worth about Rs. 12,00Q/.. They were lying packed
as if they had been. fr~shly delivered or were ready for despatch to a further
destination. The respondent disclaimed not only the ownership but all knowledse
about the contents of the packages. He could not give a satisfactory aocount
as to how those packages came into h\.s shop. His first explanation was that
some next door unknown broker had left the packages outside his shop.
He
then :;lated I.hat they were owned bv one Bhoormul. The said Bhoormul despite
repeated requests by the Deptt, did not furnish any inforn1atton regarding the
source of the alleged ~uisition of the goods.
He never appeared penonally
nor gave address or sufficient particulars of the brokers who bad aold the goods
to him. Despite two show-cause notices, Bhoormul refused to disclose any
further information. He did not furnish any evidence of his ownership or even
juridical posses5ion of the goods. · The Collector of Customs on consideration
of the fact that the goods were. admittedly foreign goods incredible explanations
by the resPondent concluded that the goods were acquired from the illegally
acquired stocks and ordered the confiscation of the goc)ds u/s 167(8) of the
Sea Customs Act. On a writ petition filed by the respondent. the single Judge
of the Madras High Court rejected the writ petition but the Letters Patent
Appeal was allowed by the Division Bench of the High Court. The Division.
Bench held that the Customs Dcptt. had not discharged its burden or proof
that the goods were smuggled goods.
Allowing the appeal,
HELD : (I) The propriety and legality of the Collector's· order
is to
be
Judged in the light of the principles regarding the burden of proof, Legal proof
is not necessarily pcrlect proof; often it is nothing more than a prudent man'1
estimL.te as to the nrobabilities of the case. Since it is cxteedingly difficult for
the prosecution to prove the facts Which are especially within the knowledge of
the accused, it is not obliged to prove them as a part of its priaiary burd~o.
On the principle underlyings. 106 of the Evidence Act, the burden to establ1sh.
the facts within special knowledge of a person lies on him and if· be fails to
establish the facts within special knowledge of a penon lies on him anJ if .he
fails to establish or explain those facts, an adveFe inference of facts may anse
against him. which coupl~ with the presumoti~e. ~vidence
a~duced . by
the
prosecution or the Department. would rebut the inittal prcs~m,ption of innocence
in favour of that person. and in the result wouJd prove him guilty. The first
oart-of the e11trv in the third column of clause 8 of s. 167 of the Sea Custoo
Act regardin" the penalty of confiscation of the goods casts less ri'°rou-; burden
on the prosecution a-; the order operates in rem and is enforced against the goods
only [842 D; 841 D; E·F]
(II) Although no direct evidence of the illicit importation of
g<?<JdS
~~s
adduced by the Department the fact that the goods were of foreign ong1n
couoled with the inference arlsin~ from the dubiou; conduct of Babhoothmull
and Bhoormal could reasonably lead to the conclusion drawn by the Collector
that the goods were smuggled a:oods.
•
834
SUPREME COURT REPORTS
[1974] 3 S.C.R,
Jssardas Daulat Ram and ors. v. The Union of India and ors., [1962] Supp.
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## Text

_Characters 0–39,941 of 44,268. This is a partial read: ask again with offset=39941 for what follows._

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COLLECTOR OF CUSTOMS, MADRAS AND ORS
v.
D .. BHOORMUL
April 3, 1974
[M. H. BEG AND R. S. SARKARIA, JJ;J
833
Sea C11sto1ns Act, 1878, Sec. 167(8_)--Irnports 11nd
&pons Control Act,
1947-Sec. 3(2)-Confiscation
of
gi:>ods--Goods
acquired
jrom
illegally
i1nported stocks-Burden of ptoo/, how discharged by tlie DepartmtlJl-lndian
Evidence Act, Sec. 106---Conflicting and incredible-account by alleged owner
of facts (regarding iniportation and owner.ship) within Iii& per.tonal knowledgeHow far co11duc1 of 1lie alleged owner determinatii·e of legal inferenct regard·
ing smuggled nature of goods.
The preventive officers of the Customs Deptt. recovered from the shop of
one Baboothmull ten packa8es containing imported goods, such as fountain peos.
hair clippers, razor sets, etc. worth about Rs. 12,00Q/.. They were lying packed
as if they had been. fr~shly delivered or were ready for despatch to a further
destination. The respondent disclaimed not only the ownership but all knowledse
about the contents of the packages. He could not give a satisfactory aocount
as to how those packages came into h\.s shop. His first explanation was that
some next door unknown broker had left the packages outside his shop.
He
then :;lated I.hat they were owned bv one Bhoormul. The said Bhoormul despite
repeated requests by the Deptt, did not furnish any inforn1atton regarding the
source of the alleged ~uisition of the goods.
He never appeared penonally
nor gave address or sufficient particulars of the brokers who bad aold the goods
to him. Despite two show-cause notices, Bhoormul refused to disclose any
further information. He did not furnish any evidence of his ownership or even
juridical posses5ion of the goods. · The Collector of Customs on consideration
of the fact that the goods were. admittedly foreign goods incredible explanations
by the resPondent concluded that the goods were acquired from the illegally
acquired stocks and ordered the confiscation of the goc)ds u/s 167(8) of the
Sea Customs Act. On a writ petition filed by the respondent. the single Judge
of the Madras High Court rejected the writ petition but the Letters Patent
Appeal was allowed by the Division Bench of the High Court. The Division.
Bench held that the Customs Dcptt. had not discharged its burden or proof
that the goods were smuggled goods.
Allowing the appeal,
HELD : (I) The propriety and legality of the Collector's· order
is to
be
Judged in the light of the principles regarding the burden of proof, Legal proof
is not necessarily pcrlect proof; often it is nothing more than a prudent man'1
estimL.te as to the nrobabilities of the case. Since it is cxteedingly difficult for
the prosecution to prove the facts Which are especially within the knowledge of
the accused, it is not obliged to prove them as a part of its priaiary burd~o.
On the principle underlyings. 106 of the Evidence Act, the burden to establ1sh.
the facts within special knowledge of a person lies on him and if· be fails to
establish the facts within special knowledge of a penon lies on him anJ if .he
fails to establish or explain those facts, an adveFe inference of facts may anse
against him. which coupl~ with the presumoti~e. ~vidence
a~duced . by
the
prosecution or the Department. would rebut the inittal prcs~m,ption of innocence
in favour of that person. and in the result wouJd prove him guilty. The first
oart-of the e11trv in the third column of clause 8 of s. 167 of the Sea Custoo
Act regardin" the penalty of confiscation of the goods casts less ri'°rou-; burden
on the prosecution a-; the order operates in rem and is enforced against the goods
only [842 D; 841 D; E·F]
(II) Although no direct evidence of the illicit importation of
g<?<JdS
~~s
adduced by the Department the fact that the goods were of foreign ong1n
couoled with the inference arlsin~ from the dubiou; conduct of Babhoothmull
and Bhoormal could reasonably lead to the conclusion drawn by the Collector
that the goods were smuggled a:oods.
•
834
SUPREME COURT REPORTS
[1974] 3 S.C.R,
Jssardas Daulat Ram and ors. v. The Union of India and ors., [1962] Supp.
A
1. S.C.R. 355 and M/S. Kanungo and Co. v. Collector of Custo1111 (Ca/cuua)
~ A.LR. 1972 S.C. 2136, relied upon.
Amba Lal v. Union of India, [1961] 1, S.C.R. 933, and S/uzmbhu Nath Mehra
v. State of Ajmer, [l!IS6] S.C.R. 1'9, distinguished .
Bletch v. Archer 11774] Cowp. 63 at p.65 and R. Madhub Chander, 11874]
21, W.R. Cr. 13 at 19.
.
CIVIL APPEi.LATE JURISDICTION: Civil Appeal No. 1142 of 1973.
Appeal by special leave from the judgment and order dated the 12th
March, 1973 of the Madras High Court at Madras in Writ Appeal No.
357 of 1969.
G. L. Sanghi and .s. P. Nayar, for the appellants.
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K. S. Ramamurthy and B. R. Agarwala, for the respondent.
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The Judgment of the Court was delivered by :
SARKARIA, J.
This appeal by special leave arises out of the following facts :
On receiving information that some packages containing smuggled
goods had been left by a person .in the premises of M/s. Sha Rupaji
D
Rikhabdas at 98, Narayana Mudali Lane, Madras-I and that these
packages were about to be despatched to Bangalore for disposal, a
posse of Preventive Officers of the Customs House went to the said
shop on June 4, 1962. They found ten packai:es in that shop.
Baboothmull of M/s. Sha Rupaji Rikhabdas was present there.
The
officers questioned Baboothmull about those packages. Baboothmull
replied that he was not the owner of those packages and that somebody
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next to his shop had left them outside the premises and since that person had not returned for a considerable time, he got them removed into
the shop.
Baboothmull was unable to throw any light with regard to
the owner or the contents of the packages.
After getting a consent letter from Baboothmull, the officers opened
the packages which contained these articles of the total value of
F
Rs. 12,255/-.
J. ParkerF9untain Pens (19 made in Canada)
~. Master hair clippers made in Germany
3. OMer Hair Clippers made in Germany
4. Venus pencils made in England
S. K. SS Out thread razors made in Germany
6. Nylon buttons made in Japan
7. Gillette Razor Blades n1ade in England
8. 7 O'clock Razor sets made in Englarid
28 Doz.
5 Doz.
3!· Doz.
760 Doz.
68 Doz.
47 Gross.
1,000 Pcs.
12 Doz.
Rs. 3,360 ·00
Rs.
600 ·00
Rs.
400·00
Rs. 2,250 ·00
G
Rs. 4,080 ·00
Rs.
705 ·00
Rs.
120 ·00
Rs.
730 ·00
H
Rs. l 2,255 ·00
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CUSTOMS COLLECTOR v. D. BHOORMUL (Sarkaria, I.)
835
The Officers seized these goods under a mahazarnama.
On June 9, 1962, a letter was addressed by the said Baboothmull
to the Collector, Customs, informing that on that date, the owner of the
packages, one Mr. D. Bhoormull turned up to claim the goods; that
his other partner was absent at the time iif the seizure of the aoods who
knew about this affair and that he had spbsequently learnt from this
partner that those goods belonged to D .. Bhoormull who left instructions
for their storage in the shop.
Subsequently the name of this partner
was given as Indermul.
The Custom Officers attempted to find out
and contact this Indermu1 but without success.
Eight days after the seizure, a letter dated June 12, 1962, was
received by the Collector of Customs from one D. Bhoormull (Poona·
wala, temporarily at 98, Narayana Mudali Lane, Madras-1), claiming
ownersl1ip of the goods.
In this letter it was stated that he had pur·
chased these goods on June 3, 1962 in the local market at Madras
through brokers; that he was packing the same till late in the evening,
and since he was forced to leave for Bangalore on the call of a friend
immediately, he instructed one of the staff of Sha Rupaji Rikhabdas to
keep the goods in their shop until his return. This letter of Bhoormull
did not contain the names or the particulars of the brokers from whom
the goods were allegedly purchased; nor did it refer to any bill, voucher
or other document to support the allegati0n of their having been purchased locally in the normal course .of business.
On receipt of this
letter, the Collector made an attempt to contact Bhoormull for furtber
investigation.
Bhoormull, however, could not be contacted as he had
gone away to Poona which was said to be his normal place of activity.
Another le;ter, dated June 25, 1962, was received by the Collector
from Bhoormull urging for release of his goods at an early date ..
On July 3, 1962, a letter was received by the Collector from M/s.
Gagrat & Co., Solicitors, Bombay on behalf of Bhoormull, requesting
for disclosure of the grounds for the seizure of the goods, and for supply
of the copies of the M ahazarnama and other relevant documents relating to the seizure. It was reiterated that the goods had been bona fide
purchased by Bhoormull in the· course of business, and as ·such, were
not liable to seizure or confiscation.
This was followed., by, another
letter dated September 14, 1962 from M/s. Gagrat & Co./addressed to
the Assistant Collector of Customs wherein the request for supply of
the necessary information, was reiterated.
The importation of goods shown as items 1, 4 and 7 had been J?rDhibited since December 1957 and of those at items 2, 3, 5, 6.and 8 smc~
March .1.960, save under a licence issued by the Import Trade Control
Authonl!es under s. 19 of the Sea Customs Act read withs. 3(1)·of the
Imports and F!xports Control Act, 194 7.
The A<sistant Collector of Customs on October 26, 1962 issued a
notic.e_ to B~oormull through. his solicitors, M/s. Gagrat & Co., ·Bombay
~equmn~ him .to prod1;1ce eVIdence of bona fide acquisition of the p:oods
m que<llon fa1lm2 ,which to show cause within a week as to why those
goods valued at Rs. 12;255/- be not confiscated under s. 167(8) of tbe
Sea Customs Act read with s. 3 ( 2) Imports and Exports Control· Act,
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836
SUPREME COURT REPORTS
(1974] 3 S.C.R.
1947. It was added tl)at in case no reply was received within the
specified period the case. would be decided ex-parte on the basis of the
facts already on record without further reference to him.
In reply, a letter, dated December 13, 1962, was written by the
Solicitors in which, it was inter alia stated that on Jun~ 4, 1962, at
Madras, the goods, being items 2 and 4 to 8, were purchased by their
client from Broker Ram Lal for a total price of Rs. 10,675 /-, and those
shown as items 1 and 3, from Broker Shanthi Lal for a sum of
Rs. 4872/-, and that these brokers had not issued any bills or receipts
regarding those goods.
Any further particulars or addresses of the
brokers were not disclosed.
On March 27, 1963, a revised show-cause notice was sent under
registered cover by the Collector of Customs to Bhoormull through bis
solicitors requiring him to produce within a week the purchase receipts,
bills, vouchers, Customs
auction-receipts,
Central
excise auction
receipts, licences or any other documents in his po<session and to furnish the names of the brokers in the market, their addresses etc. from
whom the goods were purchased by him, failing which to show cause
against confiscation of the goods.
The information called for was not supplied, nor did Bhoormull
appear personally before the Collector at any stage. However, on his
behalf the Solicitors wrote to the Collector, a letter, dated April 30,
1963, contending that the burden of proving that the seized goods had
been illegally. imported into India lay on the Customs Department and
the non-production of the documents or non-furnishing of the information asked for by the Collector·could not justify an inference of illicit importation of the goods.
It was added that such goods bad been
imported as late as 1959/1960 as personal baggages and had in fact
been sold by the Customs Department at Madras and elsewhere and as
such were being freely bought and sold in the market.
A date. was fixed by the Collector for personal hearing of Bhoormull.
But he did not personally appear.
However, on August l,
1963, Shri J. R. Gagrat, of Mis Gagrat & Co. appeared before the
Collector with a representative of Bhoormtill, and contended-that unless
the Department had any other indication, it would not be necessary for
Bhoormull to establish ownership of the goods; that there were no purchase vouchers; nor was he in a position to produce the broker who
was supposed to have left the goods near the shop of Baboothmull.
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While conceding that the burden of proving the goods to be
smuggled goods, was on the Department, the Collector held that such
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burden prima facie stood discharged as the circumstances of this case
irresistibly led to the conclusion that the goods had been illicitly imported.
The main circumstances, taken into account by the Collcetor,
in raising such an inference, may be arranged as under-:
(i) The import of such goods has been totally prohibited
since 1957 except in the case of hair clippers and Venus
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Pencils, which were allowed on a highly restricted quotabasis till October 1959 /March 1960, Policy period,
when
their import too was banned;"
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CUSTOMS COLLECTOR v. I>. BHOORMl'I. (Sarkaria, /.)
837
(Ii) The highly suspicious circumstances of the seizure
and the dubious conduct Cif the parties in relation thereto :
{a) This large number of goods, all of foreign origin, worth
over Rs .12,000/-, were found fully packed and ready for
despatch. (b) Baboothmull from whose possession they were
seized gave confticting and evasive explanations in regard
thereto.
At the time of seizure on June 4, 1962, he disda!Dled all la)OIVledge about the ownership and content~ of
those packages_, and said they were left outside the shop by a
broker whom he· could not identify.
Some days later, he
'appeared in the arena (garb?) of an anonymous
(ficticous ?) person, one Bhoormull".
(c) It was eight days after
the seizure that one Bhoormull by a letter claimed ownership
of the goods, and Baboothmull, also confirmed this:
"This
llhoormull the alleged· owner of the goods has never been
seen.
Even at the personal hearing a representative from
!tim came ... All the correspondence was exchanged with the
firm of Solicitors, namely M/s. Gagrat & Co. of Bombay".
( d) Despite repeated requisitions made and
two showcause notices given by the Collector, no bill, voucher or
other documentary evidence, whatever, regarding purchase
of the goods in the recognised markets of the country was
produced. At first, even the names of the seller were not
disclosed. Later on M/s. Gagrat & Co. cited two brokers
whose addresses were not furnished.
In view of the above circumstances the Collector held that there
"was no room for doubt that the goods were acquired from illegally
imported stocks". He, therefore, ordered their confiscation
under
s. 167 ( 8) of the Sea Customs Act.
Against this order dated October 24, 1963, Bhoormull carried an
appeal under s. 131 of the Customs Act 1962 to the Central Board of
Revenue which dismissed the same on September 7, 1964. Aggrievoo,
Bhoormull preferred a Revision Petition to the Central Government.
It was dismissed by the Secretary to the Government by an order, dated
September 7, 1965.
·Bhoormull then moved the High Court at Madras by a writ petition
under Art. 226 of the Constitution impugning the aforesaid orders of
the Collector, the Board and the Central Government, contending that
the confiscation was illegal because the Customs Department on which
the onus of proving the unlawful importation of the goods lay, had
failed to adduce any evidence whatever, to discharge that onus. The
learned single. Judge who tried the petition repelled this contention,
holding that the circumstances on .record established "every probability
of the goods having been illicitly imported into India," and dismissed
the petition.
Against the ord~r of the learned Single Judge Bhoormull filed an
appeal under Clause (15) of the Letters Patent to the Division Bench
of the High Court which held that the onus on the Department to prove
that the goods had been smuggled, could not-in this case did notsbift to Bhoormull and that the later's failure to appear personally or
838
SUPREME COURT REPORTS
(1974] 3 S.C.ll.
prove before the Collector how he had come by those goods, did not
A
justify an inference of their illicit importation, because a mere suspicion
cannot be a substitute for proof. On the above reasoning, the Bench
allowed the appeal and quashed the .Collector's order for confiscation
of the goods. Hence this appeal with special leave, by the Department.
Before dealing with the contentions canvassed, we would refer
briefly to the relevant statutory provisions.
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Section 167(8) of the Sea Customs Act ·provides for
offences
punishable to the extent mentioned in the 3rd column of the Schedule
appended to that section.
Clause (8) of that Schedule provides that
if any goods the importation or exportation of whiCh is for the time
being prohibited or restricted by order under Ch. IV of this Act be
imported into or exported from India conllacy to such prohibition or
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restriction, then (i) such goods '.'shall be liable to confiscation, and
(ii) any person concerned in any such offence shall be liable to
a
penalty not exceeding three times of the value of the goods, or not
exceeding 1000 /- rupees."
Section 171-A specifically empowers the Customs Officers employ'
ed in the prevention of smuggling to summon any person whose attendance be considers necessary either to give evidence or to produce a
D
document or thing in an enquiry in connection with the smuggling of any
goods and such person shall be bound to state the truth and produce
that document or thing and would be liable to prosecution if he made
a false statement.
A reading of s. 167 ( 8) and the related provisions indicates that
proceedings for confiscation of contraband goods are proceedings in rem
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and the penalty of confiscation under the first part of the entiy in
column ( 3) of clause ( 8) of the Schedule, is enforced against the
goods irrespective of whether the offender is known or 'unknown. But,
imposition ohhe other kind of penalty, under the second part of the
entry in column 3, is one in personam; such a penalty can be·ievied
only on the "person concerned" in any offence described in column I
oftheC~.
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Goods found to be smuggled can, therefore, be confiscated without
proceeding against any person and without assertaining who is their
real owner or who was actually concerned in their illicit import.
Section 168 empowers an officer of the Customs or anti-smuggling
staff to seize any thing liable to confiscation.
Section 178 (A) provides for burden of proof. It says :
" ( 1) Where any goods to which the section applies are
seized under this Act in the reasonable belief that they arc
smuggled goods, the burden of proving that they are not
smuggl!'<I goods shall be on the person from whose possession
the goods were seized;
( 2) This section shall apply to gold, gold manufactures,
diamonds and other precious stones, cigarettes and cosmetics
and any other goods which the Central Government may,
by notification in the Official Gazette, specify in this behalf;
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CUSTOMS COLLECTOR v. D. BHOORMUL (Sarkaria, I.)
839
(3) Every notification issued under sub-section (2)
shall be laid before both Houses of Parliament as soon as
may be after it is issued."
Large scale smuggling of gold or other goods into India may pose
a threat to the economic and fiscal interests and policies of the State.
Such illicit trade is often carried on by organized international
smugglers in the secrecy of the under-world. The more it is organized,
the less are the chances of its detection, and greater the difficulty of
proving the offences relating thereto. Laws have therefore been enacted
in most countries, which mark a partial or wholesale departure in
matters relating to smuggling, from the general principle of penal law,
viz., that it is for the State or its Department to prove the offence
against the accused or the defendant. Thus in England, s. 290(2) of
the Customs and Excise Act, 1952 provides that where in any proceeding relating to ~ustoms or Excise any question arises as to the place
from which any goods have been brought or as to whether or not any
duty has been paid er any goods have been lawfully imported etc., then
the burden of proof shall lie upon the other party to the proceeding.
In India, Parliament inserted s. 178-A by the· Amending Act 10 of
1957, but it did not, in its wisdom, go as far ass. 290(2) of the English
Act. Section 178-A in terms applies to "gold, gold manufacture,
diamands and other precious stones, cigarettes and cosmetics". With
regard to thes.- specified goods if seized under this Act in the reasonable belief tha< they are smuggled goods, the burden of proof that they
are not such goods shall be on the person from whose possession, they
are seized. But with regard to any other goods, the rule in sub-section
(I) of Section 178-A would not 11pply unless the Central Government
had specifically applied the same by notification in the Official Gazette.
It is common ground that at the material time, no such notification
applying the section to the categories of the goods in question had been
issued. In respect of such goods the provisions of the Evidence Act
and the Code of Criminal Procedure, do not, in terms, govern the onus
of proof in proceeding under s. 167(8) of the Act. In conducting
these penal proceedings, therefore, the Collector of Customs is to be
~ui~ed by the basic canons of criminal jurisprudence and natural
1usttce.
:-Yith the above prefactory remarks, we now advert to the conten!Ions. canvassed before us.
Mr. Sanghi, learned Counsel for the appellants, has advanced these
arguments:
_(a) B.ho?rmu!l had no locus standi to invoke the extraordmary 1unsd1ct1on of the High Court under Article 226
of. the Constitution because there was not even prima facie
ev!denc~ to. show that at the time of seizure, he was in ownership or 1und1cal possession of the goods;
(bl, !he on_~s of proving the goods to be smuggled cods
that mitially l~~ o~ the ~epartment, stood sufficient]: discharged .by the mev1t~ble inference arising out of the totality
of the Clfcumstances m this case, which were appraised by
840
SUPREME COURT REPORTS
(1974) 3 S.C.R.
the Collector m the Ifght of the conduct of Baboothmull and
Bhoormull, who gave conflicting and incredible explanations
as to how they had come by these goods; (c)
The source
from which and the circumstances in which Bhoormull or
Baboothmull acquired these goods, were facts
especially
within their knowledge and on the principle underlying
s. 106, Evidence· Act, these facts had to be proved by them.
They deliberately failed to disclose those facts or to give the
necessary particulars of the persons from whom the goods
were allegedly purchased, although such. information was
repeatedly requisitioned from Bhoormull by the Collector,
and they were duty bound under s. 171-A disclose it. This
contumacious conduct of Baboothmull and Bhoormull
strongly pointed towards the conclusion that the goods were
smuggled stocks, and in that sense, the inference arising from
the circumstances had shifted the onus on the Bhooormull to
prove to the contrary. (In this connection, reliance has been
placed upon lssardas Dau/at Ram and ors. v. The Union of
India and ors.(I) and M/s. Kanungo and Co. v. Collector
of Customs (Calcutta)('); (d) The Order of the Collector
did not sufF•r from any apparent error or defect of jurisdiction. ft,. order was. based on an appraisement of the
circumstantial evid.ence before him and was consistent with
the rules of natural justice. He had given the fullest
opportunity to the Respondent to put forth bis case and had
issued two show-cause notices .to him through his Solicitors.
The Division Bench of the High Court exercising jurisdiction
under Art. 226 was not competent to go .into the question of
the adequacy of that evidence, and act as if it was a court of
appeal.
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Mr. Ramamurthi, learned Counsel for the Respondent, contends in
reply, that all proceedings were conducted· by -the Collector on the
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assumption that Bhoormull was the claiment or the supposed owner
of the goods; that at no st ,ge, before the High Court an objection was
taken that he had no locus standi to maintain the writ petition, because
F
he had no interest in the confiscated goods and consequently, this objection should not be entertained for the first time in this Court. Learned
Corinsel further submits that proceedings of confiscation being penal
in nature, the burden was on the Department to show by cogent and
convincing evidence that the goods had been illicitly imported into
India and that no part of this burden could be sliifted to the person
claiming the goods. It is emphasised that in the present case, no eviG
dence whatever was produced by the Department· to show that the
goods in question were smuggled goods. The Collector's order-proceeds
the argument-calling upon Bhoormull to prove that he bad purchased
/
these goods in the normal course of business was contrary .to the law
laid down by this Court in Amba Lal v. Union of lndia( 8 ). Reference
has also been made to several decisions of the High Courts, but most of
H
(I) [1962] Supp, 1, SCR 355.
(2) AIR 1972 SC 2136.
(3) [1961) J, S.C.R. 933.
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. CUSTOMS COLLECTOR v .. D. BHOORMUL (Sarkaria, J.)
841
them turn on their own facts and do )lot elucidate the principle beyond
what was laid down in Amba Lal's case (supra)
It cannot be disputed that in proceeding for imposing penalties
under Clause (8) of S.167 to which s. 178-A does not apply, the
burden of proving that the goods are smuggled goods, is on the Depart·
ment. This is a fundamental rule relating to proof in all criminal or
quasi-criminal proceedings, where there is no statutory provision to
the contrary. But in appreciating its scope and the nature of the onus.
cast by it, we must pay due regard to other kindred principles, no less
fundamental, of universal application. Orie of them is that the prosecution or the Department is nQ! required to prove its case with mathematical precision to a demonStrable degree; for, in all human affairs.
absolute certainty is a myth, and-as Prof. Brett
felicitously
puts
it-"all exactness is a fake". El Dorado of absolute proof being un·
attainable, the law accepts for it, probability as a working substi·
tute in this work·a-day world. The law does not require the prosecution to prpve the impossible. All that it requires is the establishment of
such a degree of probability that a prudent man may, on its basis,.
believe in the existence of the fact in issue. Thus, legal proof is not
necessarily perfect proof; often it is nothing more than a prudent man's.
estimate as to the probabilities of the case.
The other cardinal principle having an important bearing on the
incidence of burden of proof is that sufficiency and weight of the
evidence is to be considered-to use the words of Lord Mansfield in
Bmch v. Archer(') "according to the proof which it was in the power
of one side to prove, and in the power of the other to have contra·
dieted". Since it is exceedingly difficult, if not absolutely impossible
for the prosecution to prove facts which . are especially within
the
knowledge of the opponent or the accused, it is not obliged to prove
them as parts of its primary burden.
Smuggling is clandestine conveying of goods to avoid legal duties.
Secrecy and stealth being its covering guards, it is impossible for the
Preventive Department to unravel every link of the process.
Many
facts relating to this illicit business remain in the special or peculiar
knowledge of the person concerned in it. On the principle underlyings~ 106, Evidence Act, the burden to establish those facts is cast on
the person concerned; and if he 'fails to establish or explain
those·
facts, an adverse inference of facts may arise against him, which
coupled with the presumptive evidence adduced by the prosecution or
the Department would· rebut the initial presumption of innocence in
favour of that person, and in the result prove him guilty. As pointed
out by Best in 'Law of Evidence', (12th Edn. Article 320, page 291),
the "presumption of innocence is, no doubt,. presumptio juris; but every
day's practice shows that it may be successfully encountered by . the
presumption of guilt arising from the recent (unexplained) possession
of stolen property", though the latter is only a presumption of fact.
Thus the burden on the proseeution or the Department may be con·
siderably lightened even by such presumption of fact arising in their
(I) (1774) I, Cowp. 63 at p. 65.
842
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[1974] 3 S.C.R.
favour.
However, this does not mean that the special or peculiar
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knowledge of the person proceeded against will relieve the prosecu'
tion or tho Department altogether of the burden of producing" some
evidence in respect of that fact in issue.
It wii! only alleviate that
burden to ischarge which very slight evidence may suffice.
Another point to be noted is that the incidence, extent and nature
<Jf the burden of proof for proceedings for confiscation under the first
part of the entry in the 3rd column of Clause (8) of s. 167, may not
be the same as in proceedings when the imposition of the other kind
of penalty under the second part of the entry is contemplated. We have
already alluded to this aspect of the m.atter.
It will be sufficient to
reiterate that the penalty of confiscation is a penalty in rem which is
~nforced against the goods and the second kind of penalty is .one in
personam which is enforced against the person concerned in the smuggling of the goods. In the case of the former, therefore, it is not
necessary for the Customs authorities to prove that any particular
person is concerned with their illicit importation or exportation. It is
enough if the Department furnishes prima facie proof of the _goods being smuggled stocks. In the case of the latter penalty, the Department
has to prove further that the person proceeded against was concerned
in the smuggling.
The propriety and legality of the Collector's impugned order had
lo be judged in the light of the above principles.
It is not correct to say that this is a case of no evidence. While it
is true that no direct evidence of the illicit importation of the goods
was· adduced ·by the Department, it had made available to the Collector several circumstances of a determinative character which coupled
with the inference arising from the dubious conduct of Baboothmull.
and Bhoormull, could reasonably lead to the conclusion drawn by the
Collector, that they were smuggled goods. These circumstances have
been set out by us earlier in this judgment. We may rccapitulat; only
the most salient among them.
The importation of such goods into India had been banned several
years, earlier, i.e. of some of them in 1957 and of others in 1960. These
goods, without exception, were aJI of foreign origin. They were of
large value of over Rs. 12,000/-. They were all lying packed: as if
they had been freshly delivered, or were ready for despatch to a
further destination. They were not lying exhibited for sale in the show·
cases of the shop. Baboothmull from whose apparent custody or
physical possession, they were seized disclaimed not only their ownership but also all knowledge about the contents of the packages. He
could not give a satisfactory account as to how those packages came
into his shop. At first. he said that some next·door unknown broker
had left them outside his shop.
Some days later, he came out with
another version viz., that one Bhoormull had left them
there.
Eight
days after, one mysterious person who gave out his name as Bhoormull,
laid claim to these goods. Despite repeated . requisitions,
Bhoormull
did not furnish any information regarding the source of the
alleged
acquisition of the goods. He never appeared personally before
tho
<Collector. He remained behind the scenes. He did not give addresses
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CUSTOMS COLLECTOR v. D. BHOORMUL (Sarkaria, I.)
843
or sufficient particulars of the brokers who had allegedly sold
the \ ·
gocids to him on the 3rd June. Whatever cryptic information was given
by him, was also conflicting. Despite two show-cause notices, Bhoormull
intransigently refused to disclose .any further information. Apart from
making a bare claim, he did not furnish evidence of his ownership or
even juridical possession of the goods. The totality of these circumstances reinforced' by the inferences arising from the co.nduct of Baboothmull and Bhoormull could reasonabiy and judicially lead one
t<>
conclud·o that these goods had been illicitly imported into Madras, a sea
port.
Even if the Division Bench of the High Court felt that this circumD
' stantial evidence was not adequate enough to establish the smuggled
character of the gooos, beyond doubt, then also, in our opinion, that
was not a good ground to justify interference, with the CoJlector's
order in the exercise of the writ jurisdiction under Art. 226 of the
Constitution. The function of weighing the evidence or considering its
sufficiency was the business of the Collector or the appellate autho-
·rity which was the final tribunal of fact. "For weighing evidence and
drawing inferences from it'', said Birch J. in R. Madhub Chander(')
"there can be no canon. Each case presents its own peculiarities and
in each common sense and shrewdness must be brought to bear upon
.~e facts elicited." It follows from this observation that so Jong as the
Collector's appreciation of the circumstantial evidence before him was
not illegal, perverse or devoid of common sense, or contrary to rules
of natural justice there would be no warrant for disturbing his finding
under Art. 226. The collector's order was not of this kind.
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In the view that the initial onus of proof on the Department can
be sufficiently discharged by circumstantial evidence, we are supported
by the decision of this Court in lssardas Dau/at Ram'.s case (supra).
There, on September 14, 1954, that is, long before tlic insertion of s.
178-A in the Act, a quantity of gold to a refinery in Bombay was sent
for the purpose of melting. The Cu.stoms authorities seized this gold
when it was being melted. The gold was found to be of foreign origin
and had been imported into In,dia in contravention of the
Foreign
Exchange Regulations Act, 1947. The Collector of Customs confiscated
it under s. 167(8) of the Act. The legality of confiscation was challenged by a petition under art. 2.26 of the Constitution before the
High Court, on the ground that there was no evidence before the Collector to show that the gold had been imported into India after restrictions had been imposed in March 1947 on its importation. The
High Court rejected this contention and dismissed the petition. The
same argument was advanced before this Court in appeal by special
leave. This Court also negatived this contention. While conceding that
there was no direct evidence that the gold had been smuggled after
March 1947, it was held that a finding to that effect could be reached
by referring to "the conduct of the appellant ·fo connection with
(a) the credibility of the story about the purchase of this gold from
three parties, (b) the price at which the gold was stated to have been
(!) (!874) 21, W.R. Cr. 13, at 19.
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(1974) 3 S.C.R.
pur~h.ased. whic~ was less than the market price and ( c) the hurry
exh1b1ted m trymg to get the gold melted at the refinery with a small
!J!t of silver added' so as reduce the fineness of the gold and thus ~ppro
x1mate the resultant product to licit gold found in the market."
The rule in /ssardas Daulat Ram's case was reiterated \\ith amplification in M/o. Kanungo ..,< Co.'r case (supra). 111erein, the appellant
was a firm carrying on business as dealer, importer and repairer of
watches. On a search of the firm's premises on October 17, 1959 the
Customs authorities seized 390 watches out of which 250 were confiscated on the ground that they had been illicitly imported into India.
The firm's petition under Article 226 of the Constitution was allowed
by a learned single Judge of the High Court and the order of confiscation was quashed on the ground that the customs authorities had failed
to prove illicit importatfon of the watches. On appeal by the Department, the Division Bench of the High Court reversed the decision of
the single Judge with these observations:
"The watches were seized from the possession of the
respondent No. 1 (appellant) who had not obtained a licence
or a cnstoms clearance permit for importation of the same.
They were of foreign make andi must have been imported
across the customs frontier. The explanations offered by the
Respondent No. 1 regarding its coming into possession of the
same between 1956 and 1957 were found, upon enquiries by
the customs authorities, to be false, t)te result of these enquiries were communicated to the Respondent No. 1 who was
thereafter heard by the adjudicating officer. Yet no attempt
was made by the respondent No. I to substantiate its claim
regarding lawful importation of the watches. . . . . . . . The
cnstoms authorities came to the conclnsion that the said
280 watches were illegally imported and thereupon made an
order for confiscation of the same. It is not for this Court, in
exercise of its jurisdiction under Art. 226 of the Constitution
to revise, set aside or quash this order, in the facts of this
case."
Jn appeal on certificate, it was contended before this Court that
there was no evidence that these watches bad not been illicitly imported
into India and that the impugned order wrongfully placed the burden
on the appellants. Sikri C.J., speaking for the Court, repelled this contention thus :
"There is also no force in the second point because we
do not read the impugned order as having wrongly placed the
burden on the appellant. What the impugned order does is
that it refers to the eYidence on the record which militates
against the version of the appellant and then states that the
appellant had not been able to meet the inferences arising
therefrom.. . In our OP.inion, the High Court was ri~ht in
holding that the burden of proof had shifted on to the appellant after the Customs Authorities had informed the appellant of the results of the enquiries and investigations.
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CUSTOMS COLLECTOR v. 0. BHOORMUL (Sarkaria, I.)
845
This also disposes of the first point. As we have said;
the burden was on the Customs Authorities which they discharged by falsifying in many particulars the story put forwara by the appellam .............. It cannot be disputed
that a false denial could be relied on by the Customs Authorities for the purpose of coming to the conclusion that the
goods ha!l been illegally imported."
In the case before us, the circumstancial evidence suggesting the
inference that the goods were illicitly imported into India, was similar
and reasonably pointed towards the conclusion drawn by the Collector.
There was no violation of the rules of natural justice. The Collector had given the fullest opportunity to Bhoormull to establish the
alleged acquisition of the goods in the normal course of business. In
doing so, he was not throwing the burden of proving what the Department had to establish, on Bhoormull. He was simply giving him a fair
opportunity of rebutting the first and t~e foremost presumption that
aro"' out of the tell-tale circumstances in which the goods were found,
regarding their being smuggled goods, by disclosing facts within his
special knowledge.
Amba Lal's case (supra) strongly relied upon by Mr. Ramamurthi,
is clearly distinguishable on facts. There, Amba Lal was originally a
resident of Pakistan. He migrated into India on the partition of the
Indian Sub-continent before March 1948 when the customs barrier
between India and Pakistan was raised for the first time.