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Judgment
P. Shanmugam, J.—The above Habeas Corpus Petition is filed praying to set aside the order of detention passed by the first Respondent in
G.O. No. 1/1055-4/2002 Public S.C. Dated 26.8.2002. The Petitioner is the wife of Aannappan, hereinafter referred to as the detenu.
The brief facts of the case are as follows:
On the basis of an information gathered by the Directorate of Revenue Intelligence (DRI) that the detenu is indulging in smuggling of gold jewellery
of foreign origin into India, he was found waiting in the car parking area in front of Chennai Anna International Airport in order to receive the gold
jewellery of foreign origin which would be brought by the passengers/carriers from Singapore by Indian Airlines Flight IC-556 on 5.7.2002. The
detenu was located sitting in the car bearing Registration No. TN-O/L-6666 along with his assistants. On examination of the detenu, the officers
found eight cellophane covered packets kept inside his pant pockets, two small note pads and fax message in four sheet indicating the names,
passport numbers and other details of eight passengers. On further enquiry, the detenu is said to have informed the officers that the said eight
cellophane covered packets contained gold jewellery of foreign origin with 96 carat purity. According to the Department, the further information
given by the detenu is that his brother is a permanent resident of Singapore ana that he used to send gold jewellery through different carriers under
instructions to conceal such gold jewellery and clear the same without payment of Customs duty. The detenu and his assistants would go to the
airport, identify the passengers/carriers and get the packets after paying them the money for having carried the gold jewellery. The detenu is said to
have stated that on 5.7.2002, as per the instructions of his brother, they had identified the eight passengers/carriers and received one packet
containing 916 carat purity gold jewellery of foreign origin from each of the eight said passengers/carriers, paid them the amounts due as indicated
in the message and were keeping the said eight packets cleared without payment of Customs duty. The gold jewellery were assayed by a certified
Goldsmith and they were seized by the DRI officers under a mahazar dated 5.7.2002 on the reasonable belief that the said gold jewellery was
liable for confiscation under the provisions of Customs Act, 1962 and that they had been smuggled into India in contravention of the provisions of
the Customs Act, 1962 and other allied Acts. The particulars of the eight passengers/carriers were checked with the Immigration Officer and it
was found that the eight passengers had not paid any duty on the gold they had brought.
The detenu had given voluntary statement dated 5.7.2002 admitting the mode of smuggling of gold jewellery and his associates also gave
statements on the same day admitting their assistance. The detaining officer was satisfied that 3238.500 gms. of assorted gold jewellery of foreign
origin which were seized under mahazar were brought from Singapore into India on a prior arrangement between the detenu and his ender brother,
a permanent resident of Singapore through the eight passengers/carriers with clear instructions to bring the said gold jewellery out of Chennai
Airport without declaring the same and hand them over to him and accordingly, the gold jewellery were brought out by the eight passengers
/carriers without declaring the same to the Customs authorities and handed over to the detenu for a monetary consideration. The detenu had
admitted that the jewellery were of foreign origin and were brought by eight passengers in the manner set out above and that no duty was paid for
the jewellery brought into India and hence, the said jewellery became liable for confiscation under Sections 111(d), 111(i) and 111(m) of the
Customs Act, 1962. The detenu was arrested on 5.7.2002 and produced before the A.C.M.M., E.O.II, Chennai on 6.7.2002 at his residence,
who remanded him to judicial custody on 19.7.2002. On the basis of the materials placed before the Government, they were satisfied that the
detenu had indulged in smuggling of goods seized under the mahazar on 5.7.2002 at the car parking area of the Chennai Anna International Airport
and they were subjectively satisfied that there was a compelling necessity to detain him under the provisions of the Conservation of Foreign
Exchange and Prevention of Smuggling Activities Act (COFEPOSA), 1974 with a view to prevent him from smuggling goods in future. The said
order is now under challenge.
The submissions of the learned senior counsel appearing on behalf of the Petitioner are under the following heads:
(i) There is total non-application of mind in misreading the Certificate of the Valuer as if the gold seized is of foreign origin.
(ii) Several of the documents relied on are illegible.
(iii) The detaining officer has no power to invoke the presumption u/s 123 of the Customs Act, 1962 in violation of Articles 21 and 22(5) of the
Constitution of India and thereby, the subjective satisfaction of the detaining authority is vitiated.
(iv) The grounds, as stated, do not amount to smuggling within the meaning of Section 3(i) of COFEPOSA.
Learned Additional Public Prosecutor, while repelling the arguments of the learned senior counsel for the Petitioner, submitted that the
Certificate of the valuer, coupled with the confession statement, makes it clear that the gold jewellery weighing 3238.500 gms. Were smuggled into
India. According to him, the detenu was involved in smuggling activities inasmuch as the jewellery was liable for confiscation for having been
brought into India from outside and removed without paying duty and any dutiable goods removed from the Customs area without paying the duty
are liable for confiscation. According to him, the presumption u/s 123 of the Customs Act, 1962 can be invoked by the detaining authority only
where the burden has not been discharged by the detenu. He further submitted that the documents, as seized from the detenu, were furnished to
him and that the messages in reference to the passengers/carriers are legible and readable. According to him, there is no vitiating circumstance so
as to interfere with the order of detention.
We have heard the learned senior counsel for the Petitioner, the learned Additional Public Prosecutor, gone through the records and considered
the matter carefully.
Paragraph 4 of the grounds of detention says that the gold jewellery were assayed by a certified Goldsmith who certified the gold jewellery to
be of foreign origin with 916/22 carat purity. The fact that the jewellery were of foreign origin is repeated. However, the Certificate issued by M/s.
Om Sakthi Gold Works found at page 14 of the booklet says that all the above yellow and grayish white colored jewellery are pure 22 carat gold
jewellery. The Certificate did not say that the jewellery were of foreign origin. Therefore, the Petitioner is right in contending that the detaining
authority has misread the Certificate as though the jewellery were found to be of foreign origin.
Grounds 1 and 3 of the detention order place the information and recovery of fax message indicating the names, passport numbers and other
details of the passengers/carriers who would be clearing the gold jewellery without payment of Customs duty. It is stated as follows:
On examination of your person, you were found with eight cellophane covered packets kept inside your pant pockets and two small note pads and
a fax message in our sheets indicating the names, passport numbers and other details of eight passengers.
From the above, it is seen that the fax message indicating the names, etc. of the passengers are documents very much relied upon in order to
connect the passengers with the detenu and the seized jewellery. However, from the booklet furnished to the detenu, there is no indication to show
that the said message is a fax message. There is no telephone number or the time of the receipt of the message or the address. Hence, on the face
of it, it cannot be stated that the documents found at pages 15 to 18 and page 19 are fax messages. Therefore, the reliance on the Certificate and
the fax message by the DRI officials for the purpose of arriving at a reasonable belief that the gold jewellery was liable for confiscation under the
provisions of COFEPOSA cannot be sustained.
In Ground 11 of the grounds of detention, it is stated that the detenu had not discharged the burden of proving that the gold jewellery seized
were not smuggled ones, as is required u/s 123 of the Customs Act, 1962 and therefore, the jewellery which were brought into India without
payment of Customs duty are liable for confiscation. Section 123 of the Customs, 1962 says that where any goods are seized under the Act on the
reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall, in a case where seizure is made from
the possession of any person, be on the person from whose possession the goods were seized.
A Constitution Bench of the Supreme Court, in The Collector of Customs, Madras Vs. Nathella Sampathu Chetty and Another, , while
upholding the vires of Section 178A of the Sea Customs Act, 1878, which placed the burden of proving on the person in possession of the goods,
held that the seizure by the officer on the belief that the goods are smuggled does not by itself operate to effect the confiscation or deprive the
owner of his property in the goods. This result, however, follows only on an order of an adjudicating officer who investigates into the complaint
regarding the possession of smuggled goods. Their lordships observed as follows:
Nevertheless, it is manifest that at the stage of adjudication (when only the rule of evidence laid down by this Section comes into operation), the
very facts which led the seizing officer to effect the seizure as distinguished from their significance as affording reasonable belief for the seizing
officer to hold that the goods are smuggled are before the adjudicating officer.
Their lordships also held that when the matter comes before the adjudicating authority and anterior to that authority invoking the presumption raised
by Section 128A. it would, on the terms of the Section, have to be satisfied that the seizure was made ""in a reasonable belief that the goods seize
were goods that had been smuggled"". At that stage, the enquiry is not and cannot be confined as to whether the seizing officer bonafide entertained
the belief, but must necessarily extend to an examination of the grounds upon which that belief was entertained with a view to ascertain that the
belief was reasonable. It might be that the entirety of the evidence which conceivably, in several cases, consists of information communicated by
informers, might not be made available to the person affected, but still the adjudicating officer would have to satisfy himself that the requirement of
Section 178A had been complied with before invoking the presumption laid down by that Section. Therefore, the seizing officer''s reasonable belief
has to be tested before the adjudicating officer or even at the stage of appeal or revision. The detaining authority, while subjectively satisfying
himself on invoking the power of COFEPOSA, cannot be permitted to say that the detenu failed to discharge the burden and that he cannot avail
of the presumption drawn by the customs officer in his favour.
The said provision has not been incorporated in the COFEPOSA so as to invoke the jurisdiction for detention by applying the provisions of
Section 123 of the Customs Act, 1962. Therefore, on the failure of the detenu to discharge his burden that the goods seized are not smuggled
goods or that the seizing office had a reasonable belief that they were smuggled goods are matters that cannot be applied in the case of preventive
detention. The detaining authority cannot import the reasonable belief of the seizing officer for the purpose of holding the detenu liable. The finding
of the detaining authority by invoking Section 123 of the Customs Act, 1962 and proceeding on that basis for passing the detention order without
even giving an opportunity to the detenu is in violation of Articles 21 and 22(5) of the Constitution of India.
12 The order of detention says that the detaining authority was satisfied that with a view to prevent the detenu from smuggling goods in future, it
was necessary to pass the order of detention. In paragraph 2 of the grounds of detention, it is stated that the State Government are satisfied that
the detenu had indulged in smuggling of goods seized under mahazar dated 5.7.2002. Section 3 of COFEPOSA empowers the Government to
make an order of detention, if satisfied with respect to any person with a view to preventing him from acting in any manner prejudicial to the
conservation or augmentation of foreign exchange or with a view to preventing him from (i) smuggling goods, or (ii) abetting the smuggling of
goods, or (iii) engaging in transporting or concealing or keeping smuggled goods, or (iv) dealing in smuggled goods otherwise than by engaging in
transporting or concealing or keeping smuggled goods. In Chandramohan v. State of Tamil Nadu (1984 Cri.L.J. 1376), a Division Bench of this
Court has taken the view that the intention of the legislature was to treat the smuggling of goods and abetting the smuggling of goods as a ground
separate and distinct and that both are separate grounds for detention.
The grounds of detention proceed on the basis that the detenu was enquired while sitting in a car outside the parking area of the airport and
that on examination, he was found to possess eight packets and a fax message indicating the names and other particulars of the passengers. The
order further says that the Immigration Officer had confirmed the arrival of the said eight passengers and that they had not paid duty for the import
of gold jewellery. As we have seen earlier, the certificate issued by the Certified Goldsmith and the fax message containing the names and other
particulars of the passengers, on the face of it, do not establish that the seized gold jewellery were of foreign origin and were imported and
removed without payment of duty. In other words, no link is established between the seized gold jewellery and the passengers who are said to
have brought the same without paying the duty.
In Smt. Shalini Soni and Others Vs. Union of India (UOI) and Others, , it was held by the Supreme Court that the Constitution and the statute
cast a duty on the detaining authority to communicate the grounds of detention to the detenu. The grounds communicated to the detenu must reveal
the whole of the factual material considered by the detaining authority and not merely the inferences of fact arrived at by the detaining authority. It
also means that the detenu is to be informed not merely of the inferences of fact but all the factual materials which have led to the inferences of fact.
If the detenu is not to be so informed, the opportunity so solemnly guaranteed by the Constitution gets reduced to an exercise in futility. In this
case, the inference drawn by the seizing officer cannot be imported to that of the detaining authority and the burden of proof will not be available
and cannot be invoked while passing the order of detention without any materials whatsoever.
Smuggling means any act or omission which will render such goods liable for confiscation u/s 11 or Section 113 as per the definition of Section
2(39) of the Customs Act, 1962. Section 111(j) of the Act reads as follows:
(j) Any dutiable or prohibited goods removed or attempted to be removed from a customs area or a warehouse without the permission of the
proper officer or contrary to the terms of such permission.
The other relevant provisions are Sections 111(1) and 111(m), which are as follows:
(1) Any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under Act, or in the case of
baggage in the declaration made u/s 77.
(m) (any goods which do not correspond in respect of value or in any other particular) with the entry made under this Act or in the case of baggage
with the declaration made u/s 77 (in respect thereof), or in the case of goods under transhipment, with the declaration for transshipment referred to
in the proviso to Sub-section (1) of Section 54.
Section 135 of the Act deals with the evasion of duty or prohibition. Sub-section (1)(a) deals with the evasion of duty in reference to the goods.
Sub-section (1)(b) relates to evasion of duty in reference to acquisition of the goods. Insofar as the case on hand is concerned, the detenu is said
to have acquired the goods knowing that they are liable for confiscation. Therefore, from the facts, according to the Department, the smuggling of
goods is complete and the goods have become smuggled goods, thereby attracting Sections 3(iii) and (iv) of COFEPOSA. In the absence of any
link between the goods seized and the passengers who have allegedly smuggled them, the provisions of Section 111(1) and (m) of the Customs
Act, 1962 cannot be invoked. If Sections 111(j) were to be applied in this case. Section 3(1) of the COFEPOSA is attracted. But, that is not the
case of the Department. While maintaining that it is an act of smuggling, they try to contend that it is in reference to the dutiable goods found
removed without permission. Their conflicting stands vitiate the impugned order on the vice of non-application of mind.
For all the above reasons, we hold that the order of detention impugned in this HCP is liable to be set aside and it is accordingly set aside. The
HCP is allowed. The Respondents are hereby directed to release the detenu forthwith unless his detention is required in any other case.