Judgment :- Petitions under Art. 226 of the Constitution of India, praying that in the circumstances stated therein and in the affidavits filed therewith, the High Court will be pleased to call for the records pertaining to the order of the Respondent bearing reference No. D.A. Dis. No. VIII/10/259/57 Cus. (Adj) dated 12-12-1958 and quash the same, so far as the petitioners in these petitions are concerned by the issue of a writ of Certiorari. 2.These Writ Petitions coming on for hearing upon perusing the petitions and the affidavits filed in support thereof, the common order of the High Court dated 30-4-1959 and made herein and the records relating to the order of the respondent bearing reference No. D.A. Dis. No. VIII/10/259/57 Cus. (Adj) dated 12-12-1958 so far as the petitioner in each of these petitions is concerned and comprised in the return of the Respondent in these petitions to the writ made by the High Court and upon hearing the arguments of Messrs. S.K.L. Ratan and J. Satyanarayana, Advocates for the petitioner in all the petitions and of the Government Pleader on behalf of the Respondent in all the petitions the Court made the following Order Vanechand, the petitioner in W.P. 409 of 1959. and his two sons, Bijraj, petitioner in W.P. 408 of 1959 and Sampathraj, petitioner in W.P. 410 of 1959, were partners of the firm trading in bullion at Vellore under the style of Vanechand and Sons. On 9-11-1957 the residence and the shop of the petitioners at Vellore were searched and a total quantity of 171-7/32 tolas of gold was seized. Of these 50 tolas consisting of five bars of ten tolas, each, were seized from the house, and the rest of the gold was seized from the shop. In the gold seized from the shop there were two bars of ten tolas each. The five bars and two bars of ten tolas each referred to above admittedly bore foreign marks, and Bijraj admitted at that stage that those 70 tolas constituted smuggled gold. 3.In the course of a preliminary enquiry Bijraj and Govindaraj, clerk of the firm, admitted transactions with four bullion merchants at Bangalore. Their shops were also searched in the course of the enquiry. 3.In the course of a preliminary enquiry Bijraj and Govindaraj, clerk of the firm, admitted transactions with four bullion merchants at Bangalore. Their shops were also searched in the course of the enquiry. 4.Ultimately notices were issued to the three petitioners, their clerk Govindaraj, and the four firms at Bangalore to show cause why proceedings should not be taken under Section 167(8) of the Sea Customs Act. There was an enquiry and Shri Bijraj and the four Bangalore merchants were also given the personal hearing they wanted, and their advocates were also heard. 5. Eventually, on 12-12-1958, the Collector passed a consolidated order. He directed that the gold seized from the petitioners, that is 171-/32 tolas of gold should be confiscated. In addition he imposed a penalty of Rs. 15, 000/- on Shri Bijraj, Rs. 10, 000/- on Vanechand and Rs. 10, 000/- on Sampathraj. He also imposed penalties of varying amounts on the four bullion merchants of Bangalore, to the details of which it is unnecessary to refer at this stage. 6. Thus two sets of punishments were imposed upon the petitioners: (i) the gold was confiscated on the footing, that the entire quantity seized from the house and the shop of the petitioners was smuggled gold and (ii) each of the petitioners was fined under Section 167(8) of the Sea Customs Act. The requirements of Section 167(8) to justify the imposition of the penalty of confiscation are proof that the gold in question is smuggled gold, whoever might have been the person who factually smuggled the gold. For the imposition of a personal penalty what Section 167(8) requires is proof that that person was "concerned in such offence", that is the offence of smuggling the gold. 7. After reviewing the earlier decisions of this Court, Balakrishna lyer J. summed up the position in Devichand and Co. v. Collector, Central Excise (1960 I MLJ 75) at pages 76 and 77."To bring the petitioners within the terms of Item 8 it is necessary to establish either that they actually imported the gold or were concerned in the import of gold. That is to say, it must be shown that they had arranged for the import of the gold or abetted the import of the gold or received it immediately after the import, the receipts being the final step in the process of importation. That is to say, it must be shown that they had arranged for the import of the gold or abetted the import of the gold or received it immediately after the import, the receipts being the final step in the process of importation. In other words they must have either actually committed the offence of importation or have been accessories to it either before the fact or after the fact. The terms of Item 8 so far as it relates to attempt to import need not concern us here because even according to the department this is a case where the unlawful import of gold had been completed. To be in possession of the gold, or to sell the gold, or to buy the gold once the process of importation assuming the importation is unlawful is completed and independently of the series of act connected with such importation will not fall within the terms of Item 8 of the schedule". The learned Judge quoted what I had stated in W.P. 691 of 1957: "The knowledge that what he has purchasing was smuggled gold, would not be evidence of participation in the act of smuggling itself, which is what is constituted an office under the first column of Section 167(8). To put it in other words, even if the act of purchase constituted the petitioner an accessory after the fact, that would not suffice to hold that the petitioner was 'concerned in the offence' specified in the first column of Section 167(8). Even if a person purchases gold with the full knowledge that that gold has been smuggled into the country that by itself will not constitute him a person concerned in the antecedent and completed act of smuggling. It was only on proof that the petitioner was concerned in one or the other of the offences set out in the first column of Section 167(8) that the petitioner would have been liable to suffer the penalty prescribed in column 3 of Section 167(8)." * 8.It was the case of the four bullion dealers of Bangalore, who were dealt with along with the petitioners in the consolidated order of the Collector dated 12-12-1958 that Balakrishna Ayyar J. had to consider in Devi Chand and Co. v. Collector Central Excise (1960 I. M.L.J. 75). v. Collector Central Excise (1960 I. M.L.J. 75). The learned Judge held that there was no evidence to show that any of these was concerned in the offence, that it was concerned in smuggling the gold, and the penalties imposed on them were set aside. 9.In this case the Collector proceeded upon the basis, that the petitioners purchased smuggled gold from those Bangalore dealers. There was no specific finding by the Collector that the petitioners or any of them were concerned in the act of smuggling itself. If the sale of smuggled gold, which was what the four dealers at Bangalore was really charged with, did not bring them within the scope of Section 167(8), obviously, the purchase of smuggled gold from them, with nothing more, even with the knowledge that it was smuggled gold, could not make the purchaser liable to the penalty prescribed for being concerned in the act of smuggling. 10. On the short ground that there was no finding and that there was no evidence which could possibly support any finding, that any of the petitioners was concerned in smuggling the gold, possession of which was ultimately traced to one or other of the petitioners, the imposition of the personal penalty on each of the petitioners will have to be set aside. 11. There is one other feature which deserves notice. Penalties were imposed on each of the three partners of the firm. In the course of the enquiry before the Collector, Vanechand and Sampathraj virtually disowned any knowledge of the transactions in bullion, which according to them were being looked after solely by Bijraj. Whether that plea was true or not was not even considered by the Collector of Central Excise. Obviously the penalty prescribed by Section 167(8) can be inflicted only upon the person concerned in the offence that is the offence of smuggling, and to justify a penalty on each of the petitioners there must have been a specific finding that he was concerned in the act of smuggling. But independently of this, as I have pointed out earlier, there was no evidence to support any possible finding, that any of the petitioners was concerned in the act of smuggling. All that was held established was that the firm purchased the gold with the knowledge that it was smuggled gold. 12. But independently of this, as I have pointed out earlier, there was no evidence to support any possible finding, that any of the petitioners was concerned in the act of smuggling. All that was held established was that the firm purchased the gold with the knowledge that it was smuggled gold. 12. The next question is, whether the order of the Collector directing the confiscation of the gold is also liable to be set aside. In the statement first recorded from Bijraj there was an admission, that the seven bars of ten tolas each which bore foreign marks, were smuggled gold. The endeavour of the learned Counsel for the petitioners was to show that the remaining 101 tolas of gold was liable to confiscation. Learned Counsel contended that the Collector apparently accepted the case of the petitioners, that they maintained two sets of accounts one what was called the regular set of accounts, showing the transaction with the Madras dealers which had nothing to do with smuggled gold, and the other a separate set of accounts, showing the transactions with the Bangalore dealers, which in the opinion of the Collector related only to smuggled gold. Learned Counsel further pointed out that the stock balance as disclosed in the regular set of accounts on the date of the search 9-11-1957 was about 98 tolas. In addition there was also 52 tolas of unseized gold. Learned Counsel contended that there was no justification for ordering confiscation of anything more than the 70 tolas of gold, which at one stage Bijraj admitted to be smuggled goods. 13.The real question to which I have to address myself at this stage is, whether there was material on which the Collector could come to the conclusion, that the entire quantity of the gold seized 71 7/32 tolas, was smuggled gold. Virtually it was admitted by Bijraj at one stage that 70 tolas ot these were smuggled gold. There was certainly material on which the Collector could not, despite that Bijraj claimed later. Thus there was certainly material for holding that a portion of the gold seized was smuggled goods. Then there was evidence that the petitioners' firm dealt with the Bangalore firms, and there was material on which the Collector could come to the conclusion, that those were transactions in smuggled gold. Thus there was certainly material for holding that a portion of the gold seized was smuggled goods. Then there was evidence that the petitioners' firm dealt with the Bangalore firms, and there was material on which the Collector could come to the conclusion, that those were transactions in smuggled gold. There was evidence that the purchases were slightly below the market rates, though the explanation offered by the petitioners was that that was because the transactions, being kept outside the books, no sales tax was paid on the purchase or sales at Bangalore. It was certainly open to the Collector to come to the conclusion, on the basis that smuggled gold was acquired at rates below the market rates that the acquisition of gold was with the knowledge that it was smuggled one. No doubt how much of the gold actually seized on 9-11-1957 had been purchased from Bangalore there was no conclusive evidence to establish. The petitioners at one stage attempted to show that a portion of the gold seized could be correlated to a purchase made two months earlier. Of the gold seized in addition to the seven bars of ten tolas each the other component parts were a bar of 801/2 tolas, another of 15 3/4 tolas, and small pieces weighing 3- 31/32 tolas. The Collector was certainly justified, in the absence of any further explanation from the petitioners in declining to accept that any of these could be correlated to the purchase of 75 tolas of gold. Learned Counsel for the petitioners contended that it was normal for bullion merchants to melt gold purchased from time to time and keep it in the form of bars of varying weights for purposes of handling and subsequent also. It was certainly within the knowledge of the petitioners-firm, or whoever was in charge of it, how much of the gold that was in stock on 9-11-1957 had been purchased from any given dealer. If the gold purchased from various dealers had been melted to form blocks, it was certainly open to the petitioners to have offered that explanation and to have proved it by acceptable evidence. In other words, it was certainly open to the petitioners to show on what basis they came to be in possession of a block weighing 80 tolas when that was seized on 9-11-1957. In other words, it was certainly open to the petitioners to show on what basis they came to be in possession of a block weighing 80 tolas when that was seized on 9-11-1957. In the absence of any definite explanation even from the petitioners, it was certainly open to the Collector to draw a conclusion, that whatever might be the stock position disclosed in the regular accounts, the entire gold seized was smuggled gold. I should like to guard myself against recording it as my conclusion, on the evidence on record, whether it was wholly smuggled gold or partly smuggled gold. All I am saying is there was material on which the Collector would come to the conclusion, especially in the absence of any acceptable from the petitioners, that the entire gold seized on 9-11-1957 was smuggled gold, though the regular books of accounts apparently showed purchases of gold free from the taint of smuggled gold which left a closing stock to the extent of about 98 tolas.14The learned Additional Government Pleader preferred . a preliminary objection to the maintainability of these petitions. He pointed out that under the Sea Customs Act the petitioners had the remedy of appealing against the orders of the Collector, and since they did not avail themselves of the alternative remedy, this Court should refuse to investigate the merits of the case in their applications for the issue of writs of certiorari, with reference to the imposition of the personal penalty, it has been explained more than once by this Court what the requirements of Section 167(8) are, that is what is the interpretation to be placed on the expression 'concerned'. In this case, I have found that there was no evidence referred to by the Collector which could lead to any possible finding, that any of these petitioners was concerned in the act of smuggling itself. Therefore it is really a case of imposing a penalty without having the jurisdiction to do so, that is imposing the personal penalty prescribed by Section 167(8). This is a case where in my opinion, the court ought to exercise its discretion in favour of interference by the issue of a writ of certiorari, despite the fact that the petitioners did not avail themselves of the alternative statutory remedy of an appeal. This is a case where in my opinion, the court ought to exercise its discretion in favour of interference by the issue of a writ of certiorari, despite the fact that the petitioners did not avail themselves of the alternative statutory remedy of an appeal. The rule nisi is confirmed to the extent indicated above, treating the orders imposing the penalties as severable. The order imposing the penalty of confiscation of gold will be allowed to stand. A writ of certiorari will issue setting aside the orders of imposition of personal penalties on each of the three petitioners. No order as to costs.