Bombay High Court
Poonam Chand Maluk Chand Shah vs State Of Maharashtra on 23 September, 1970
ORDER
1. This appeal has been directed against the judgment of the Chief Presidency Magistrate, Bombay, convicting the appellant, who was the accused in the Court below, under Sections 135(a) and 135(b) of the Customs Act and sentencing him to six months' rigorous imprisonment for each of the two offences, the two substantive sentences being ordered to run concurrently.
2. The accused happens to be a resident of Bombay and is the Sole Proprietor of two firms doing business in the name and style of (1) S. Nehalchand, 474, Kalbadevi Road, Bombay 2, and (2) Travo Comfo, 86, Gobind Mahal, Marine Drive, Bombay. His residence is situate at Satnam Sagar, Peddar Road, Bombay, and one flat situate on the ground floor of Gobind Mahal, Marine Drive, Bombay, stands in the name of his wife Mrs. Manjula. It is there that the business of Travo Comfo is being carried on. This flat situate on the ground floor of Gobind Mahal was raided and searched by the Customs officers in the early hours of 7-3-1963. The search was carried out by Customs Officers Gogate Chowdhary and others from 4 a.m. onwards. One P. Nair was then found in the flat. While the rear room of this fiat was being searched, a large number of watches kept in wooden or cardboard boxes were found placed in a niche and those watches numbering about 4,513 along with some other luxury goods were seized under a panchnama. No documents pertaining to these watches were found on the premises and none of them was produced by P. Nair either when demanded. The watches were accordingly seized under the reasonable belief that they were smuggled goods.
3. On the same day, the residential premises of this accused were also searched and some files were seized from that place. A statement of this accused was also recorded on the same day under Section 108 of the Customs Act. He then produced photostat copies of five permits and claimed that the goods seized at Gobind Mahal were brought to Bombay under those permits. There further statements of the accused were thereafter recorded on 8-3-1963, 11-3-1963 and 12-3-1963. In those statements also the accused claimed the goods to be his and in one of the subsequently statements (on 11-3-1963) he produced two more photostat copies of two more permits and stated that those two and the earlier five permits covered all the goods which were seized on 7-3-1963. In the meantime, on 10-4-1963 the establishment of defence witness Prembhai Chibabhai was raided by the Enforcement Directorate and a large number of documents consisting of Despatches, invoices, duty payment receipts, etc. were seized from that place. Between 18-6-1963 and 21-6-1963, an inventory of all the watches that had been seized was prepared as per Ex. 'W' by four Customs officers, including prosecution witness Mokashi, in the presence of the accused himself and that inventory revealed that the number of watches actually seized on 7-3-1963 was not 4,513 but 4,562. An Appraiser named Raja was thereafter asked to co-relate these watches with the documents in possession of the Customs Authorities and he, on his part, co-related 2,249 watches. Raja was thereafter once again asked to co-relate the watches only in the light of the seven photostat copies of the Transport Certificates produced by the accused and he was then able to co-relate only 218 watches as being covered by those certificates.
4. On 22-2-1964 a show cause notice was served on the accused and the complaint giving rise to the prosecution of this accused was eventually filed against him on 28-3-1966.
5. The accused was charged under Section 135(a) and 135(b) of the Customs Act on the allegation of his being concerned with the evasion of Customs duty in respect of these watches and further for being in possession of these smuggled watches. The watches, which were made the subject-matter of the charge, included 2,249 Buler Watches, 173 Henry Sandoz Watches, 3 Auereole Watches, 377 Ostara Watches, 187 Enicar Watches, 100 Secura Watches, 99 Favre Leuba Watches, 37 Niveda Watches, 18 Hoga Watches, 64 Mustang Watches and 90 Canon Watches, the aggregate number of the watches in question being 4,344.
6. The defence of the accused was two-fold. In the first place, he denied all connection with the watches in question and contended that all those watches belonged to one Premabhai Chibabhai and on his request a room in the flat standing in the name of his wife was allowed to be used by him for storing the same and he could not, under the circumstances, be held answerable for the watches in question. In an attempt to substantiate that defence, he even examined Premabhai Chibabhai as a witness on his behalf. Secondly he contended that in any case the documents available before the Court clearly established that all the watches were lawfully imported at Daman and from there lawfully brought to Bombay under appropriate Collector's Certificates.
7. On a consideration of the evidence before him, the learned Chief Presidency Magistrate did not accept the first contention of the accused and declined to place any reliance on the evidence of Premabhai Chibabhai. With regard to the second contention, he accepted the same in part and the conclusion to which he came was that the accused was guilty under Sections 135(a) and 135(b) only in respect of 63 Buler Watches, 34 Roberta Watches, 2 Roamer Watches, 1 Josmar Watch, 228 Ostara Watches and 44 Mustang Watches, the aggregate number of those watches being 372. While coming to this conclusion, the learned Chief Presidency Magistrate relied on the provisions of Section 123 of the Customs Act and proceeded on the view that the burden of proving that the watches seized by the Customs officers were not smuggled watches was on the accused and he had failed to discharge that burden in respect of the aforesaid 372 watches. On the question of sentence, he took the view that mere fine would not meet the requirements of justice and the accused deserved a sentence of imprisonment. He accordingly awarded six months' rigorous imprisonment to the accused on each of the two counts and directed those sentences to run concurrently. Feeling aggrieved by his conviction and sentence, the accused has come up to this Court in appeal.
8. The first submission of Mr. Sen, appearing on behalf of the accused, was that the learned Chief Presidency Magistrate was in error in taking the view that Section 123 of the Customs Act was applicable to a criminal trial and in placing the burden on the accused to prove his innocence in respect of the watches seized by the Customs authorities. It was further urged that in any case the materials, which were on record, were more than sufficient to enable the accused to discharge the burden cast on him under Section 123 and the conviction of the accused under Sections 135(a) and 135(b) was, therefore, erroneous. Although I am not inclined to accept the first submission of Mr. Sen, the second, I think, must be allowed to prevail.
9. So far as the first submission is concerned, we must first refer to the provisions of the Sea Customs Act of 1878. Till 1955 that Act did not contain any provision for prosecution in respect of an offence of smuggling. It was in 1955 that the Act was amended by Section 10 of Act XXI of 1955 and Section 167(81) was brought on the statute book. That section provided :-
"If any person knowingly, and with intent to defraud the Government of any duty payable thereon, or to evade any prohibition or restriction for the time being in force under or by virtue of this Act with respect thereto acquires possession of, or is in any way concerned in carrying, removing, depositing, harbouring, keeping or concealing, or in any manner dealing with any goods which have been unlawfully removed from a warehouse or which are chargeable with a duty which has not been paid or with respect to the importation or exportation of which any prohibition or restriction is for the time being in force as afore said; or If any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any provision of this Act applicable to those goods, such person shall on conviction before a Magistrate be liable to imprisonment for any term not exceeding two years, or to fine, or to both".
10. Simultaneously with this amendment, one other section was introduced into the statute and that was Section 178A and that section laid down :-
"178A (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession that 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.
(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."
11. While Section 178A was included in Chapter XVII, Section 167(81) was included in Chapter XVI, the heading of Chapter XVI being "Offences and Penalties", and the heading of Chapter XVII being "Procedure Relating to Offences, Appeals, etc." Section 178A has accordingly been used in trials in respect of an offence under Section 167(81) and the use of Section 178A in such criminal trials has been recognised by the Supreme Court in at least three cases, which were cited at the Bar on the side of the prosecution. The first of those cases is Hukma v. The State of Rajasthan, ; the second is Soni Vallabhdas Liladhar v. Assistant Commissioner of Customs, 1983 (13) E.L.T. 1408 (S.C.) = A.I.R. 1965 Supreme Court 481; and the third is Kewal Krishan v. State of Punjab, 1993 (67) E.L.T. 17 (S.C.) = A.I.R. 1967 S.C. 737.
12. The Customs Act of 1962 (Act 52 of 1962) was enacted to consolidate and amend the law relating to Customs and that was done on 13-12-1962. Section 123 of this Act provides :-
"123. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.
(2) This section shall apply to gold, diamonds, manufactures of gold or diamonds, watches, any other class of goods which the Central Government may be notification in the official Gazette specify."
13. This section, therefore, substantially corresponds to section 178A of the earlier Sea Customs Act to which a reference has already been made. Section 135 lays down :-
135. Without prejudice to any section that may be taken under this Act, if any person -
(a) is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods, or (b) acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or had reason to believe are liable to confiscation under section 111 he shall be punishable, -
(i) in the case of an offence relating to any of the goods to which section 123 applies and the market price whereof exceeds one lakh of rupees, with imprisonment for a term which may extend to five years and with fine : Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months :
(ii) in any other case with imprisonment for a term which may extend to two years, or with fine, or with both.
Thus, Section 135(a) and (b), with which we are concerned, substantially corresponds to Section 167(81) of the old Act. It is no doubt true that while Section 135 is included in Chapter XVI, the heading of which is "Offences and Prosecutions" Section 123 has been included in Chapter XIV, the heading of which is "Confiscation of Goods and Conveyances and Imposition of Penalties", but merely because Section 123 is included in Chapter XIV and not in Chapter XVI, it would hardly be right to confine the operation of Section 123 to adjudication proceedings only contemplated under Sections 111, 112 and 122 of the Customs Act. As observed in Maxwell on the Interpretation of Statutes, Twelfth Edition, at page 11, "While the court is entitled to look at the headings in an Act of Parliament to resolve any doubt they may have as to ambiguous words, the law is quite clear that you cannot use such headings to give a different effect to clear words in the section, where there cannot be any doubt as to their ordinary meaning." Therefore, if the words used in Section 123, are clear, it is clearly not necessary to go to the heading of the chapter in which that section is included. A plain reading of Section 123, is in view sufficient to show that it contains nothing which would warrant the limitation which is sought to be put on it on the side of this accused. Had it been intended to confine the operation of Section 123 to adjudication proceedings, words to that effect would evidently have been used in that section, especially when in the earlier Sea Customs Act Section 178A formed part of Chapter XVII headed as "Procedure Relating to Offences, Appeals etc."
14. It is no doubt true that one of the normal rules of criminal jurisprudence is that there is always a presumption in favour of the innocence of the accused and the burden of establishing its case always rests on the prosecution and the burden never shifts, but it was open to the Legislature to make a departure from this principles in view of the special difficulties relating to the detection of customs offences. In Collector of Customs v. Nathella Sampathu Chetty, , Their Lordship of the Supreme Court have referred to the report of the Taxation Inquiry Commission 1953-54, which pointed out the factual position regarding the existence of wide spread smuggling in commodities, including inter alia gold. At page 320 of that report it has been pointed out :-
"Smuggling now constitutes not only a loophole for escaping duties but also a threat to the effective fulfilment of the objective of foreign trade control. The existence of foreign pockets in the country accentuates the danger. The extent of the leakage of revenue that takes place through this process cannot be estimated even roughly, but, we understand, it is not unlikely that it is substantial. Apart from its deleterious effect on legitimate trade, it also entails the outlay of an appreciable amount of public funds on patrol vessels along the sea coast and permanent works along the land border, and watch and ward staff on a generous scale. It is, therefore, necessary, in our opinion, that stringent measures, both legal and administrative should be adopted with a view to minimising the scope of this evil."
15. With reference to these observations their Lordships have observed :
"The deleterious effects of smuggling as pointed out in the extract from the Report, are real and it is not in dispute that the prevention and eradication of smuggling is a proper and legally attainable objective and that this is sought to be achieved by the relevant law. If therefore for the purpose of achieving the desired objective and to ensure that the intentions of Parliament shall not be defeated a law is enacted which operates somewhat harshly on a small section of the public, taken in conjunction with the position that without a law in that form and with that amplitude smuggling might not be possible of being effectively checked, the question arises whether the law could be held to be violative of the freedom guaranteed by Article 19(1)(f) and (g) as imposing an unreasonable restraint."
16. Considerations like these seem to have prevailed with the legislature when it decided to enact the provisions of Section 178A.
17. In Craises on Statute Law, 1963, Edition, at page 337 it has been observed :-
"The common law has no controller in any part of it but the High Court of Parliament (sic), and if it be not abrogated or altered by Parliament it remains still. If it is clear that it was the intention of the legislature in passing a new statute to abrogate the previous common law on the subject, the common law must give way and the statute must prevail;
........."
18. In the view I take, Section 178A does make a departure from the common law in regard to crime in this country and once these special provisions in Section 178A are enacted, they must override the normal rules of criminal jurisprudence, to the extent of which it is permissible within the scope of Section 178. Since Section 123 is clearly found to be analogous to Section 178A, the provisions of that section also must be viewed in the same light and viewing in that light, there is, in my opinion, nothing in Section 123 to warrant the limitation that those provisions are confined to adjudication proceedings only and are not available at the time of the trial. In Pukhraj v. D. R. Kohli, 61 Bom. LR 1230-1240 it has been pointed out that the presumption raised in Section 178A is not that the person from whom the gold is seized under such reasonable belief is a smuggler or is in any manner concerned in smuggling of that gold, or that he is in possession of it knowing that it is smuggled. The presumption only is that that gold is smuggled. The decision in that case was confirmed by the Supreme Court in Pukhraj v. D. R. Kohli, and in that case it has been observed that once it is shown that the goods were seized in the manner contemplated by the first part of Section 178A, it would be for the person in possession to prove that the goods were not smuggled goods. If the person found in possession has not discharged the burden placed on him under Section 178A, the goods are liable to confiscation under Section 167(8). This no doubt is the position, but these observations do not make any difference to the position that the presumption arising under 178A is not limited to adjudication proceedings but is also available at the time of the trial and that position, as I have already pointed out, has been recognised by the Supreme Court in the three cases to which a reference has already been made. In Pukhraj's case there was no occasion for Their Lordships of the Supreme Court to consider the question about the applicability of Section 178A to a criminal trial, because they were only dealing with a case at the adjudication stage.
19. In Sewpunjanraj I. Ltd. v. Collector of Customs, , Supreme Court 845, to which my attention was drawn on the side of the accused, it has been observed that so far as the confiscation of the goods is concerned, it is a proceeding in rem and the penalty is enforced against the goods whether the offender is known or not known; the order of confiscation under Section 182 of the Sea Customs Act operates directly upon the status of the property, and under Section 184 transfers an absolute title to Government. Therefore in a case where the Customs authorities can proceed only against the goods, there can be no question of applying Section 23 of the Foreign Exchange Regulation Act and the remedy under the Sea Customs Act against the smuggled goods cannot be barred. These observations also do not advance the submission that the operation of Section 178A is confined to adjudication proceedings only. On the side of the accused, special emphasis was sought to be placed on the following sentences appearing in paragraph 26 of the judgment in Collector of Customs v. Nathella Sampathu Chetty, :-
"Nevertheless it is manifest that at the stage of the adjudication (when only the rule of evidence laid down by the section comes into operation) the very facts which led the seizing officer to effect the seizure, as distinguished from their significance as affording a reasonable belief for the seizing officer to hold that the goods are smuggled are before the adjudicating officer."
20. But the words "when only the rule of evidence laid down by the section comes into operation" merely indicate that it does not come into operation till the stage of adjudication and these words certainly do not mean that the rule of evidence laid down in Section 178A does not come into operation in the course of a trial.
21. In the view I have taken, the provisions of Section 123 could legitimately be invoked in favour of the prosecution even in the course of the trial in the Court below. It is no doubt true that those provisions could only come into operation on evidence being led by the prosecution to show that the goods were seized under the reasonable belief that they were smuggled goods, but on this question we have enough material in the shape of the evidence of Customs officers. The first of them is Vasudeo Bhagwandas Chowdhary, P.W. He has stated that the goods were seized under the reasonable belief that they were smuggled and were liable for confiscation and he has further given reasons for that belief. The reasons given by him are : (1) the watches were prohibited goods and were found on the premises in large quantity, (2) they were stored in a niche, (3) the premises were not of a watch dealer or a godown meant for storing watches but was the office of taxi business, (4) no documents were produced by Nair to show that they were not smuggled, and (5) in the search of the premises no documents were found regarding these goods. He has specifically stated that he asked Nair to produce the documents and Nair was accordingly seen telephoning his master, but the answer to the telephone query was that the watches may be allowed to be carried away. Similar evidence has further been given by Shripad Dattatraya Gogate, P.W. 6. In the face of the evidence of these Preventive Officers, the learned Chief Presidency Magistrate was, I think, sufficiently justified in accepting the claim of the prosecution that the goods in question were seized under the reasonable belief that they were smuggled and were liable for confiscation under the provisions of the Customs Act. Once this reasonable belief is established, the provisions of Section 123 of the Customs Act to come into play and under that section the burden shifts on to the accused to show that the goods were not smuggled goods.
22. But it must be borne in mind that the burden which an accused person is called upon to discharge is not the same as the burden which the prosecution is required to discharge in a criminal trial. As pointed out by Their Lordships of the Supreme Court in Harbhajan Singh v. State of Punjab, , there is concensus of judicial opinion in favour of the view that where the burden of an issue lies upon the accused, he is not required to discharge that burden by leading evidence to prove his case beyond a reasonable doubt that burden is discharged if the accused person succeeds in proving preponderance of probability. This decision has been followed by the Supreme Court in the subsequent decision in V. D. Jhingan v. State of U.P., . After referring to the various authorities, including the earlier decision in Harbhajan Singh's case. Their Lordships have observed :-
"We are accordingly of the opinion that the burden of proof lying upon the accused under Section 4(1) of the Prevention of Corruption Act will be satisfied if the accused person establishes his case by a preponderance of probability and it is not necessary that he should establish his case by the test of proof beyond a reasonable doubt. In other words, the onus on an accused person may well be compared to the onus on a party in civil proceedings, and just as in civil proceedings, the Court trying an issue make its decision by adopting the test of probabilities, so must a criminal court hold that the plea made by the accused is proved if a preponderance of probability is established by the evidence led by him."
23. It is in the light of this well recognised legal position that the question whether the accused in this case has or has not discharged the onus under Section 123 must be considered. It seems to me that the learned Chief Presidency Magistrate did not sufficiently realise this aspect when he examined the evidence before him in the court below. There is, I think some justification for the comment that he virtually equated the burden of proof of the accused with the burden of proof of the prosecution.
24. Now so far as 60 Buler watches are concerned, the position that emerged from the documents on record is that in all 3,717 watches were imported at Daman as evidenced by the Despatches at Exs. 37, 38 and 39 and the invoices at Exs. 39A, 37C and 38E. Out of these 3,717 Buler watches, transport certificates were obtained in respect of 2,251 watches only for the purpose of bringing them to Bombay. Under the Collector's certificates at Exs. 3A 1500 Buler watches bearing No. 1057 were brought to Bombay from Daman on 2-2-1963 and under the certificate at Ex. 3C 176 watches bearing the same number were brought on 21-2-1963. That means that out of the 2,017 Buler watches bearing No. 1057 which were imported under the Despatches at Exs. 38 and 39; only 1,676 were brought to Bombay on 2-2-1963, and 21-2-1963, but at the time of the raid on 7-3-1963, only 1631 Buler watches bearing No. 1057 were seized. Under the certificates at Exs. 3B and 3D 165 Buler watches bearing No. 1172/30 were brought to Bombay on 21-2-1963. They were out of a total lot of 1,200 Buler watches imported under the Despatches at Exs. 37 and 38 and the invoices at Exs. 37C and 38E, but at the time of seizure the number of Buler watches bearing No. 1172/30 was found to be 145 only. So far as these two types of watches are concerned, the finding of the learned Chief Presidency Magistrate is that all the 1631 Buler watches bearing No. 1057 and all the 145 Buler watches bearing No. 1172/30 were lawfully imported. So far as Buler watches bearing No. 1146/C are concerned, the position is that 500 watches bearing that number were imported under the Despatches at Ex. 39 read with the invoice at Ex. 39A, but out of them only 400 watches were brought to Bombay under the certificates at Exs. 3A and 3C. Under the certificate at Ex. 3A only 300 watches were brought on 2-2-1963 and under the certificate at Ex. 3C 110 more watches were brought. The total number of watches brought under the two certificates was thus 410, but at the time of seizure 470 Buler watches bearing No. 1146/C were seized and the view taken by the learned Chief Presidency Magistrate is that the excess of 60 Buler watches bearing No. 1146/C are not proved to have been law fully imported.
25. The learned Chief Presidency Magistrate, however, has not duly taken into account the position that Buler watches bearing No. 1146/C were not the only watches brought from Daman to Bombay. They were brought along with Buler watches bearing Nos. 1057 and 1172/30. As I have already pointed out, as many as 2,017 Buler watches bearing No. 1057, 1,200 Buler watches bearing No. 1172/30 and 500 Buler watches bearing No. 1146/C were imported at Daman and it was out of this total stock of 3,717 that the certificates were obtained for the transport of 2,251 Buler watches only, but when these watches were actually seized, the total number of Buler watches seized was found to be 2,249 only. There was thus an overall shortage of two watches, although there was a deficit of 45 watches in respect of Buler watches bearing No. 1057 and a deficit of 20 in respect of Buler watches bearing No. 1172/30 and an excess of 60 in respect of Buler watches bearing No. 1146/C. There is, under the circumstances, sufficient force in Mr. Sens submission that no watches outside those that were imported at Daman were brought to Bombay. Much need not, I think he made of the fact that the certificate of Ex. 3A was limited to only 300 Buler watches bearing No. 1146/C and the certificate at Ex. 3C was limited to 110 Buler watches bearing No. 1146/C. The possibility of more Buler watches bearing No. 1146/C and lesser number of watches in respect of the two other brands being brought to Bombay, under the certificates cannot, in my opinion be ruled out.
26. Mr. Khandalawala, appearing on behalf of the prosecution took some pains to emphasise that the watches, which were being brought from Daman to Bombay, used to be inspected at two places on way - first at Debel Police Post and thereafter at Chala Custom House at Vapi and at the time of crossing the Customs Barrier at Vapi, the examination of the watches used to be thorough and each watch used to be carefully scrutinised before being cleared on the way. This, however, is I think a claim which it is difficult to entertain in the very nature of things. It is rather difficult to believe that every watch was taken out of its wrapping and examined with reference to its make and number before being cleared at the Custom House. From the evidence of D'Souza, D.W. 3, it no doubt appears that he allowed the clearance of the goods after checking with the invoices and the permits, but it is difficult to accept the submission that the checking with the permits was so meticulous that not a single watch could escape scrutiny. In the very nature of things, it seems to me that examination and inspection of each watch was impossible, except when there was reason to arouse suspicion on receipt of information that some smuggled goods were being carried on the way. It appears that the certificate bearing No. 147(Ex. 3A) was issued by the Collector of Daman for the transport of 1800 Buler watches and that number comprised 300 watches described as "R.G. 21 Jewels (Calendar)" and 1500 watches described as "R. G. Chrom. 17 Jewels waterproof" and it is on the basis of this very description that Mr. D'Souza made the endorsement that he had cleared 682 Chromium plated watches, 818 gilted watches and 300 gilted watches with calendar. Merely because 300 watches were described as Calendar, in the endorsement also it was mentioned that 300 calendar watches were being cleared. It would not, I think, be right to read his endorsement as meaning that he had examined each and every watch before making the endorsement he did. On this occasion Mr. D'Souza was concerned with clearing only 1800 watches, but there were occasions when, thousands of watches, besides huge quantities of cloth and things like fountain pens were being transported as shown in the certificate at Ex. 1-E and a mere examination of the content of the certificate at Ex. 1-E would show how very impossible it was to examine each item with maticulous care and precision.
27. If we turn to the certificate at Ex. 3-C it appears that it was in respect of the transport of 286 Buler watches which were described as "17 Jewels rolled gold Chrome steel back". These 286 watches actually consisted of 176 Buler watches bearing No. 1057 and 110 Buler watches bearing No. 1146/C and while clearing these watches, all that Mr. D'Souza wrote in the endorsement was that 176 watches bearing No. 1057 and 110 watches bearing No. 1146/C were being cleared. This undoubtedly supports Mr. Sen's submission that he was merely following the description of the watches given in the certificate themselves. Since separate description of 176 and 110 watches was not given the certificate at Ex. 3-C, the possibility of more Buler watches bearing No. 1146/C being brought to Bombay along with Buler watches bearing No. 1057 cannot legitimately be ruled out. Any way, the important position to be noticed is that in all 2,251 Buler watches were brought under the certificates and at the time of seizure 2,249 Buler watches only were seized. If in these circumstances the accused says that these Buler watches were covered by the certificates, his explanation cannot, I think, be discarded in the light of the invoices at Exs. 39A, 37A and 38E and the Despatches at Exs. 39,39,37. I am, therefore, of the view that the accused has sufficiently discharged his onus in respect of 60 Buler watches bearing No. 1146/C. It appears that at the time of seizure 2 Buler watches bearing No. 55 and one more Buler watch bearing No. 1967-146 were seized by the Customs officials. It is common ground that these three particular watches bearing these two particular numbers are neither to be found in the certificates at Exs. 3A, 3C, 3B or 3D nor even in the Despatches and even in the invoices, but from this alone it would not, I think be legitimate to conclude that these three solitary watches out a total of 2,251 were smuggled by this accused. In this connection it is interesting to refer to the invoice at Ex. 38E under which 1,000 Buler watches bearing No. 1172/30 were purchased in the name of one Babulal Chunilal, but when they were actually imported and inspected at the Custom House at Daman, the Despatch at Ex. 38 shows that all the 1,000 watches did not bear No. 1172/30. Only 700 bore that number and the remaining 300 bore No. 1057. That means that even the numbers mentioned in the invoices are not to be taken as being quite conclusive on a point like the one we are dealing with in this case. If in spite of the invoice watches bearing different numbers were actually sent and received at Daman, the possibility of three Buler watches, two bearing No. 55 and the one bearing No. 1967-146, being imported at Daman along with the other Buler watches and the same being thereafter transported to Bombay legitimately under the various certificates, cannot, I think, be ruled out. I am therefore, of the view that even in respect of these three Buler watches also the accused has sufficiently discharged his onus. This conclusion is further supported by the fact that at the time of seizure these watches were found in the same boxes in which other legitimately imported watches were found.
28. That brings us to the 34 Roberts watches in respect of the accused has been found guilty. So far as these watches are concerned, the position that emerges is that as many as 5,451 Roberts watches were imported as evidenced by the Despatches at Exs. 40 to 44 and the invoices (see Ex. 'Y') bearing Nos. 2/111, 9/324, 9/339, 9/365, 9/366, 10/4, 10/5 and 10/63. Out of these 5,451 watches, only 5,405 were transported under the transport certificates at Exs. Sl.-E, 1-F, 1-G and 1-H. These watches were brought on 29-9-1962, 13-10-1962, 26-10-1962, and 21-2-1963, but at the time of seizure on 7-3-1963 only 588 watches of this make were seized and in respect of 554 out of the same the accused has already been acquitted. The view taken by the learned Chief Presidency Magistrate seems to be that in respect of the remaining 34 watches, the accused was not able to discharge his burden. In taking this view the learned Chief Presidency Magistrate, it seems, was influenced by the fact that the watches described in the certificates at Exs. 1-E, 1-F, 1-G and 1-H did not bear any number, but the 34 pieces on the other hand, were found to have different numbers on them. The word "Sobnam" appears to have been inscribed on the back of these watches, but the learned Chief Presidency Magistrate himself has come to the conclusion that that description is not of any special significance. The question, therefore, is whether the view taken by the learned Chief Presidency Magistrate could be justified only on the basis of the numbers appearing on the back of these 34 watches. I am inclined to think that it would be unsafe to attach too much importance to these individual numbers in a case of this kind. When watches to the extent of 5,451 were being imported and watches to the extent of 5,405 were brought to Bombay, it is difficult to rule out the possibility of the numbers escaping the attention, both of the importer as also of the transporter. The possibility of each watch being examined with reference to its number at the Vapi Custom House must for reasons already indicated be ruled out. If in the Collector's certificates at Exs. 1-E to 1-H no numbers were mentioned, it was presumably because majority of the watches did not bear any numbers and on that representation the description in the certificates was written. These 34 watches also were admittedly found in the cartons or boxes in which the remaining lawfully imported Roberta watches were seized. It would not, under the circumstances, be right to discard the accused's explanation that these 34 Roberta watches formed part of the 5,451 Roberta watches lawfully imported at Daman.
29. That takes us to two Roamer watches and one Josmar watch in respect of which the accused has been found guilty by the learned Chief Presidency Magistrate. So far as Roamer watches are concerned, the position that emerges is that in all 1,170 watches of this make were imported as evidenced by the invoice (Ex. Y-9) watches bearing No. 588 and the Despatch at Ex. 45, out of these 1,170, 1,161 watches were transported to Bombay under the certificates at Exs. 1-H, 1-C and 1-E. Out of these 1,161, which came to Bombay on 26-10-1962, 11-1-1963 and 21-2-1963, only 120 watches were available for being seized on 7-3-1963. The view taken by the learned Chief Presidency Magistrate is that 118 out of these 120 were lawfully imported, but the remaining two were not. In taking this view, the learned Chief Presidency Magistrate seems to have been influenced by the fact that one of the Roamer watches bore no number and the other bore No. 9270, which is not to be found in the Despatch at Ex. 45. It does appear that different numbers have been mentioned in lots of 10 and 20 in the Despatch at Ex. 45, but it is equally important to remember that no numbers have been mentioned in the invoice at Ex. Y-9. From the evidence of Mr. Pinto D.W. 2, there is reason for saying that although the Customs officers at Daman noted down numbers on some occasions, it was not a uniform practice and, in any case, those Customs officers were not primarily concerned with numbers but with the nature of the watches that were being imported. Therefore, the possibility of these officers omitting to note down these two numbers while examining a lot of 1,170 watches cannot in my opinion, be ruled out. These two stray watches also were admittedly found in the same boxes or cartons in which the legitimately imported 118 Roamer watches were found. It would not, under the circumstances, be right to reject the accused's explanation that these two watches also are correlated with the invoice bearing No. 588 and were covered by the transport certificates at Ex. 1-H, I-C and 1-E.
30. So far as one Josmar watch is concerned, the position is that as many as 2,434 Josmar watches were imported as evidenced by the Despatches as Exs. 46, 47 and 48. They were imported in three lots of 767, 767 and 900. While the invoice in respect of the first lot is available (see Ex. Y-10), the invoice in respect of the other two is not available but the Despatches at Exs. 47 and 48 leave no doubt that those two lots also were lawfully imported at Daman. From the invoice at Ex. Y-10 it appears that these watches were then described as bearing Nos. 520 and 524. Out of these 2,434 imported watches, 1659 were brought to Bombay under the certificates at Exs. 1-A, 1-D and 1-E, but out of these 1,659 only 239 had remained at the time of seizure. Out of these 239 watches, the learned Chief Presidency Magistrate himself has found that 239 watches were lawfully imported. In regard to the remaining solitary watch, he has held that the accused has failed to discharge the onus resting on him. In taking this view, he seems to have been influenced by the fact that this watch bore No. 524-10-206. Since this number 524-10-206 has not been noted on any of the three Despatches at Exs. 46, 47 and 48, it seems to have been held that this watch could not possibly have been imported under those Despatches. The learned Chief Presidency Magistrate, I think, has unnecessarily attached too much importance to this number. The point to be noted is that the number 524 mentioned in the invoice at Ex. Y-10 is also present on this watch. The watch is also a watch of Josmar make and the same was found in the entire lot of 239 watches in the original boxes containing Josmar watches. If we examine the inventory at Ex. 'W' the entries at Serial Nos. 215, 216, 217 and 218 leave no doubt that all these watches were in boxes tied in the same bundle bearing No. 17. The entry at serial No. 210 shows that the last but one watch noted against that serial number was one bearing No. 524-10-259 and the last watch with which we are concerned bears No. 524-10-206. One wonders whether "206" was originally as "206". A small discrepancy of this kind need not, in my opinion, be magnified to the extent of rejecting the explanation given by this accused. It may be that this small discrepancy was never noticed by anyone right from the manufacturing stage till the stage of transporting the watches to Bombay. I am satisfied that the explanation which the accused has given in this behalf is worthy of acceptance. This solitary Josmar watch bearing No. 524-10-206 must, under the circumstances, be held to have been lawfully imported and the accused must be deemed to have sufficiently discharged his burden in respect of that watch also.
31. This brings us to 228 Ostara watches. So as these watches are concerned, it appears that as many as 4,000 Ostara watches were imported under the invoice (Ex-Y-16) bearing No. 501-515 as evidenced by the Despatches at Ex. 52. Out of these 4,000 watches, 3,600 watches were brought to Bombay under the certificate at Ex. 1-F and 386 were brought to Bombay under Ex. 1-B. Out of these 3,989 watches, only 377 Ostara watches were seized on 7-3-1963 and in respect of 149 watches out of them the accused has already been acquitted. In regard to the remaining 228 watches, the finding of the learned Chief Presidency Magistrate is that the accused has failed to discharge the burden. In coming to this conclusion, the learned Chief Presidency Magistrate is influenced by the fact that while in the invoice at Ex. T-16 the watches have been described as calendar watches, the 228 watches in question are found to be non calendar, but the learned Chief Presidency Magistrate does not seem to have noted the fact that under the certificate at Ex. 1-F as many as 1,100 Ostara watches with date, that means calendar watches, and as many as 1,320 Ostara watches without date, that is non calendar, were actually brought to Bombay on 29-9-1962. It is, under the circumstances, clear that these watches were at cleared Vapi Out post on the ground of their being covered by the Invoice No. 501/515 (Ex. Y-16). Once this position is realised, it is difficult to reject the accused's explanation that these watches were lawfully imported. In this connection, it may further be mentioned that the Appraiser, Raje, himself co-related these 228 Ostara watches with the invoice at Ex. Y-16 vide Ex. 31. The learned Chief Presidency Magistrate was, under the circumstances, clearly in error in holding that the accused has failed to establish that these 228 Ostara watches were lawfully imported. Even Mr. Khandalawala very fairly conceded that the position in respect of these watches did give room for doubt. Even on that footing the benefit must go to the accused.
32. That leaves 44 Mustang watches in respect of which the accused has been found guilty. So far as these watches are concerned the position is that 1,000 watches were imported at Daman under the invoice (Ex. 61B) of Helsa Watch Co., but when these watches actually came to Daman and were examined by the Customs officers, it was found that what was actually imported were 1,000 Mustang watches. An endorsement to that effect was accordingly expressly made on the invoice at Ex. 61B under the signature of one Mr. Mascarenhas in the presence of defence witness Pinto. That 1,000 Mustang watches were in fact imported under this invoice is further clear from the despatcho at Ex. 61. The whole of that Despatcho was not intact. A part of the lower half seems to have been torn away but even so what is left clearly indicates that this Despatcho bearing No. 40 is mentioned in the rubber stamp of the Customs Authorities appearing on the invoice at Ex. 61B. Even on the back side of the torn Despatcho, the word "Mustang" is clearly visible. The face value of the watches mentioned in the invoice is shown as 4,765 Francs and the same value was adopted and mentioned on the Despatcho for the purpose of levying the Customs duty at Daman. The position which emerges, therefore is that although the invoice at Ex. 61B was the invoice of Helsa Watch Co., the watches that were actually imported were not Helsa watches, the description of which was presumably been given in the invoice in question, but Mustang watches as stated by Pinto D.W. 2. In the course of his evidence, he has clearly stated that the endorsement by Maserenhas on the invoice at Ex. 61B was made because the invoice was for Helsa watches while the consignment actually was of Mustang watches. The question about the watches being lawfully imported cannot, under the circumstances, be considered on the basis of the description of watches mentioned in the invoice at Ex. 61B as was done in the Court below as also in this Court at the time of the arguments at the Bar.
33. It appears that out of these 1,000 Mustang watches imported under the Despatcho at Ex. 61B, 720 were transported to Bombay under the certificate at Ex. 1-A and 64 more were brought under the certificate at Ex. 1F. What was found at the time of seizure on 7-3-1963 were 64 watches. In respect of 20 watches out of them, the accused has already earned an acquittal. In regard to the remaining 44 Mustang watches, the finding of the learned Chief Presidency Magistrate is that he has failed to discharge his burden. In coming to this conclusion, the learned Chief Presidency Magistrate was apparently influenced by the fact that these 44 watches were with 17 jewels, whereas, according to the description appearing in the invoice at Ex. 61-B, the watches were with one Jewel only, but I have already pointed out that while considering the question whether Mustang watches were lawfully imported, the description appearing in the Helsa invoice cannot be accepted as a guide. In this very connection, it is further useful to remember the evidence of defence witness Pinto. He has clearly stated the at the time of inspecting the watches at Daman, they never used to note the number of Jewels in the watches and that fact is further borne out by the Despatcho at Ex. 61. It is, under the circumstances, difficult to say that the 1,000 watches that were actually imported at Daman under the Helsa invoice did not contain any watches with 17 Jewels. That the number of Jewels was not being examined at the Customs Barrier at Vapi is also abundantly clear from an examination of the Collector's certificates at Ex. 3-A, and 3-C. In the certificate at Ex. 3-A there is a mention of 300 Buler Gents watches with 21 Jewels bearing No. 1146/C and of 1,500 Buler watches with 17 Jewels bearing No. 1057. That means that the watches bearing No. 1146-C were supposed to be of 21 Jewels and those bearing No. 1057 were supposed to be of 17 Jewels. All those watches were cleared at the Customs House at Vapi on 2-2-1963 and 21-2-1963. Now if we turn to the certificate at Ex. 3-C what we find is that 286 watches comprising watches bearing Nos. 1146/C and 1057 were allowed to be transported to Bombay and a consolidated description for the entire lot was given in the certificate in which all those watches were described as watches with 17 Jewels. On this occasion also they were cleared at Vapi Custom House on the footing of the description contained in the certificate. More is hardly necessary to be convinced that no attention was ever paid to the number of Jewels while clearing the watches at the Customs Barrier. There is under the circumstance, no justification for rejecting the accused's explanation in respect of the 44 Mustang watches merely because those watches were watches with 17 Jewels.
34. In the view I have taken the learned Chief Presidency Magistrate was unnecessarily influenced by the prosecution claim that each and every watch was microscopically examined at the Customs Berrier at Vapi and every point, like number, jewels, etc. were scrutinised before allowing clearance. Once it is realised that examination at the Custom House could at best be formal, if not perfunctory, there is reason for saying that the entire lot of watches that were transported to Bombay under the various Collectors certificates were in fact watches covered by the Despatches and the invoices produced on the side of the accused. There is, under the circumstances, no adequate reason to reject the accused's explanation that all these watches were lawfully imported. Such burden, as rested on the accused under Section 123 of the Customs Act, having thus been satisfactorily discharged, the accused is clearly entitled to an acquittal.
35. This appeal is accordingly allowed, the conviction as well as the sentence of the accused are set aside and the accused is acquitted of the charges levelled against him. His bail bond is ordered to be cancelled.