SANJEEV KUMAR Vs. CEGAT

JUDGEMENT

(1.) IN pursuance of an intelligence report, the Customs Authorities organised a raid-cum-Naka on 2nd July, 1982 in Sunam and during the course of the said raid, petitioner Sanjeev Kumar was apprehended and four gold biscuits of foreign origin weighing 464 grams, Indian currency worth Rs. 7/- and one key were recovered from the petitioner. As a result of the search of one metal box held by the petitioner in a cloth bag, gold ornaments weighing 239 grams and Indian currency worth Rs. 3,220/- were also recovered. Since, the petitioner failed to produce any evidence for their legal acquisition/possession etc. , the said gold biscuits, Indian currency and gold ornaments were seized. The gold ornaments and the Indian currency were seized on the reasonable belief that these ornaments were manufactured out of the smuggled gold and the Indian currency was the sale proceeds of smuggled gold/gold ornaments. After show cause notice etc. was issued to the petitioner, the items which were seized were ordered to be confiscated under Section 111 of the Customs Act and a penalty of Rs. 75,000/- was imposed on the petitioner under Section 112 of the Customs Act. Aggrieved by the said order, the petitioner had filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi. Vide order dated 24th April, 1987 (Annexure P. 2) the appeal of the petitioner was partly allowed. The order confiscating the gold ornaments and Indian currency was set aside and the order regarding the confiscation of fiscation of four gold biscuits, was, however, confirmed. Penalty of Rs. 75,000/- was reduced to Rs. 20,000/ -.

(2.) THE petitioner, thereafter moved the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, under Section 130 of the Customs Act for referring the following questions of law for the decision of this Court:

(3.) THE learned Counsel for the petitioner had not seriously contended that questions of law Nos. (i), (ii) and (v) really arise for determination by this Court. However, he contended that question Nos. (iii) and (iv) do arise. The learned counsel maintained that under Section 112 of the Customs Act, which deals with the penalty for improper importation of goods etc. the penalty can only be imposed if the person from whose possession the contraband item is recovered, knows or has reason to believe that the contraband item/items is/are liable to confiscation under Section 111 of the Customs Act. According to the learned counsel, simple possession of an item liable to confiscation under Section 111 of the Customs Act, is not sufficient to impose penalty under Section 112 of the Customs Act. Section 112 of the Customs Act is in the following terms: