Commissioner of Customs, Chennai vs A.K. Hamsa Mohideen

Prabha Sridevan, J.—The substantial question of law on which the Civil Miscellaneous Appeal has been admitted is thus :

In the absence of any legal material available in the hands of the respondent to show either he had an authority to import the contraband involved in

this case or he had paid customs duty on the contraband of foreign origin in his possession, has not the Tribunal committed an error of law in

setting aside the order of confiscation; penalty and making a provision for the redemption relief?

The facts of the case are as follows :

The Police Personnel attached to B-1 North Beach Police Station, Chennai, registered a case under FIR No. 111/03, dated 14-3-03 and seized

various electronics goods, such as, assorted mobile phones, assorted mobile chargers etc. of foreign origin valued at Rs. 3,76,100/- (CIF)

(Market value Rs. 5,64,600/-), along with vehicle Regn. No. TN-01 J-2868. The respondent herein and one Kannabiran, the driver of the vehicle,

who were the occupants of the vehicle, were asked whether they had any receipt or bill for the legal possession of the goods, for which they

replied in the negative. Therefore, they were arrested and produced before the Honourable ACMM (EO II) on 14-3-03 and were remanded to

judicial custody. On the direction of the Court, the seized goods were handed over to the Customs authorities for further action in the matter in

terms of the Customs Act, 1962. The Customs department thereupon deposited the goods in the Customs Warehouse for further action. As a

follow up action, statement was obtained from the respondent herein on 24-3-03 wherein he has inter alia stated that he was having one STD

booth at Egmore and the goods were purchased by him from one Sujavuthin. He admitted that he did not have any bills/receipts with him.

Statement was also taken from the driver of the car viz. Kannabiran who stated that he owned a car and used to lend it to his friends for their use

and in the instant case, he took Rs. 100/- to drop the respondent in Parrys Bazar and that he had no connection with the goods.

The confiscation of goods and the vehicle was ordered and redemption, fine and penalty was imposed. On appeal, the Commissioner, set aside

the imposition of redemption, fine and confiscation of vehicle and reduced the penalty with regard to the goods. Against that, the respondent went

before the Customs, Excise Service Tax Appellate Tribunal. Before the Tribunal, it was contended that since the goods were seized by the police

and then handed over to the Customs on the direction of the Magistrate, the judgment in Gian Chand and Others Vs. The State Of Punjab, would

squarely apply. Further, since the goods seized were taken from the possession of the police, the provision of law with regard to the burden of

proof also would not apply. The Tribunal accepted the contention and allowed the appeal. Against that, the present Civil Miscellaneous Appeal

has been filed.

The factual findings are that the goods in question, though of foreign origin are freely available in the market and they are non-notified goods.

Even in the initial statement, the respondent had stated that the goods had been purchased from one Sujavuthin and therefore, the respondent

claimed to be the purchaser of the goods. Therefore, the Tribunal rightly held that the onus is on the authority to establish that the goods were

smuggled. In Gian Chand and Others Vs. The State Of Punjab, , it was held thus :

9.........When the goods were seized by the police they ceased to be in the possession of the accused and passed into the possession of the police

and when they were with the Magistrate it is unnecessary to consider whether the Magistrate had possession or merely custody of the goods. The

suggestion that the goods continued to be, at that stage, in the possession of the caused does not embody a correct appreciation of the law as

regards possession. A ''seizure'' under the authority of law does involve a deprivation of possession and not merely of custody and so when the

police officer seized the goods, the accused lost possession which vested in the police. When that possession is transferred, by virtue of the

provisions contained in S.180 to the Customs authorities, there is no fresh seizure under the Customs Act. It would, therefore, follow that, having

regard to the circumstances in which the gold came into the possession of the Customs authorities, the term of S. 178A which requires a seizure

under the Act were not satisfied and consequently that provision cannot be availed of to throw the burden of proving that the gold was not

smuggled, on the accused.

In this case, the accused lost possession of the goods when the police took custody of it, so there is no fresh seizure under the Customs Act.

There is no question of law much less any substantial question arises for consideration in this Civil Miscellaneous Appeal. Hence, the Civil

Miscellaneous Appeal is dismissed. No costs.