H S JOLLY Vs. KISHAN

JUDGEMENT

(1.) This revision petition is directed against order dated 10.1.77 of a Metropalitan Magistrate discharging the respondent in a complaint case instituted by the petitioner who is Superintendent, Customs & Central Excise, New Delhi against him under Section 135(b) of the Cusoms Act (hereinafter referred to as the Act). The facts of the case lie in a narrow corn- pass. The respondent carries on his business in the firm name M/s. Novelty Emporium, Chandni Chowk, Delhi, of which he is the sole proprietor. On 13.7.1968 Shri S.M. Kesar, Inspector Customs (Public Witness 3) conducted a search of the business premises of the respondent pursuant to a search warrant issued by the Assistant Collector of Customs. The respondent was present at the time of the search. On enquiry by Shri Kesar as to whether he had any contraband goods in the shop he replied in the negative. However, the search yielded 51 sarees of foreign origin. Of these 41 sarees were embroidered while rest were plain/ printed sarees. The same bore markings indicating their foreign origin. The respondent could not account for their possession and simply stated that some of them had been checked and verified by the Customs Officer -earlier in January 1968 but were released by them. However, he could not produce any proof of their lawful import/possession. Hence the same were seized by Shri Kesar under the reasonable belief that they were smuggled goods vide Panchnama Ex. Public Witness PW3/A. Statement of the respondennt Ex. Public Witness PW3/B too was recorded at the spot. Later on his statement was recorded by the Customs Authorities under Section 108 of the Act. These goods were eventually confiscated by the Collector of Customs who also imposed a personal penalty of Rs. 250.00 on the respondent. The complaint in question was then instituted by the petitioner for prosecution of the respondent under Section 135(b) of the Act on the ground that the import of fabrics made wholly or mainly of synthetic yarn including sarees was restricted/prohibited under Section 4 of the Act read with Section 3(1) of the Imports and Exports Control Act, 1947. Further the provisions of Section 123 of the Act had also been made applicable to such goods by virtue of Notification G.S.R. 621 dated 27.3.1968.

(2.) The learned Magistrate has discharged the respondent vide impugned order holding that the aforesaid notification inter alia covered 'fabrics made wholly or mainly of synthetic yarn which did not specifically include sarees made of synthetic yarn whereas subsequent notification No. S.O. 263(E) dated 6th April, 1972 which had been issued by the Ministry of Finance (Department of Revenue and Insurance) in exercise of powers conferred by Sub-section (1) of Section 25 of the Act which purported to exempt certain goods from the whole of the duty of the customs leviable thereon under the 1st Schedule to the Indian Tarrif 1934 inter alia included 'fabrics, sarees and knit wear made wholly or mainly of synthetic yarn. Thus he found that the notification dated 27th March) 1968 which was in force at the relevant time did not forbid possession of the sarees of foreign origin and the charge against him was groundless.

(3.) The principal agrument advanced by the counsel for the petitioner is that the learned magistrate fell into gave error of drawing a fine distinction between the expressions 'fabrics' and 'sarees' and in the process he overlooked the fact that the term 'fabric' being the genus would automatically cover 'sarees' which are just a specie of the same. Further according to him the induction of word 'saree' in the subsequent notification way of abundant caution and it was not designed to introduce a new item of prohibited import as such. At the cost of the repetition it may be restated that GSR 621 dated 27th March, 1968 was issued under Sub-Section (2) of Section 123 of the Act and its manifest objects is to cast the burden of proof on the person whose possession any goods to which the said section applies are seized in the reasonable belief that they are smungled goods. Surely this notification has no direct relevance to the ban imposed on certain types of articles. However, by implication it may be inferred that where fabrics made wholly or mainly of synthetic yarn are found in possession of a person the same arc smuggled goods and the onus of proving that they are not smuggled would lie on him. The term 'fabric' has no where been defined in the Act or the Rules and Regulations etc. issued thereunder. However, as early as 1935 the term 'fabric' was defined vide notification CBRRD is. 179/Cus 1/35 of 2nd August, 1935 as follows :-