007-NLR-NLR-V-55-PRINCIPAL-COLLECTOR-OF-CUSTOMS-Appellant-and-T.-M.-A.-WIJESEKERA-Respondent.pdf
TT A. DE SILVA X—Principal Collector of Customs v. Wijesekera
19
±953Present: H. A. de Silva J.
PRINCIPAL COLLECTOR OF CUSTOMS, Appellant, and
T.M. A. WIJESEKERA, Respondent
S. C. 235—M. G. Colombo, 19,430
■Customs Ordinance {Cap. 185)—Offence of failure to pay export duly—Ingredient offraud necessary—Sections 59, 64, 128, 139A..
In a prosecution under section 128 of the Customs Ordinance for non-paymentof export duty in respect of goods liable to such duty there must be proof thatthe accused was guilty of fraud or fraudulent evasion. .
^A-PPEAT, from a judgment of the Magistrate’s Court, Colombo.
T. S. Fernando, Acting Solicitor-General, with A. Mahendrarajah,Crown Counsel, for the complainant appellant.
S. Nodes am, with E. B. Vannithamby, for the accused respondent.
Cur. adv. vult.
January 19, 1953. H. A. de Silva J.—
This is an appeal taken with the sanction of the Attorney-Generalagainst an order of acquittal of the accused entered in this case by theMagistrate of Colombo. The complainant in this case is the PrincipalCollector of Customs and the accused is T. M. A. Wijesekera of Wije-sekera & Co., Ltd. The accused-respondent was charged on three countsin the charge, to wit, that the accused on or about the 23rd day of Novem-ber, 1948, at Colombo within the jurisdiction of this court :
was knowingly concerned in the fraudulent evasion of the customs
duties payable on the exportation of 1630*458 tons of nakedunrefined coconut oil,
did export 1630 ■ 458 tons of naked unrefined coconut oil, being
goods liable to duty the duties for which had not been paidor secured,
did deal with 1630 -458 tons of naked unrefined coconut oil being
goods liable to duties of customs with intent to defraud therevenue of such duties, and that the accused abovenamedbecame liable to forfeit treble the value of the said goods, towit, .a sum of Rs. 6,600,000 and that he was thereby by virtueof section 139a of the Customs Ordinance (Cap. 185) as amendedby Ordinance No. 3 of 1939 guilty of ofiences punishable underthe said section 139a of the Customs Ordinance as so amended.
After trial the learned Magistrate found the accused not guilty andacquitted him. It is from that order that this appeal is 'taken. The learnedMagistrate hag in his judgment set out the facts clearly. It is hardlynecessary for me to detail the facts upon which he has come to his findingexcept to refer to such of the evidence as having a particular bearingon the poiirts that the parties are at issue.
I may say at the -outset that on most questions of fact there doesnot seem to be much variance between the prosecution and the defence.
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TT. A. DE SILVA J.—Principal Collector of Customs v. Wijesekera
As a matter of fact the accused called no oral evidence but relied oncertain documents produced by him.1
In the year 1942 the Ceylon Government entered into a contractwith the United Kingdom Ministry of Food to supply to it the entireexportable surplus of copra and coconut oil. The Ccvnmissioner ofCommodity Purchase who was also an Assistant Controller of Exports(coconut products) was the sole exporter of copra and coconut oil.
In August, 1948, the contract with the United Kingdom Ministry ofFood was revised. The revision of the contract resulted in only a fractionof the Ceylon produced copra and coconut oil being exported to theUnited Kingdom by the Commissioner of Commodity Purchase andprivate parties were permitted on a licence to export copra and coconutoil to any destination subject to the condition that the best price wasobtained for the commodity exported. In accordance with that policyadopted by the Government, Messrs. Wijesekera & Co., Ltd., of whichthe accused was the Managing Director at the material dates took steps-to export two consignments of coconut oil to the United States of America.The first consignment was 280 tons which was shipped on the steamer-ss. Mount Mansfield. In respect of this shipment Wijesekera & Co. paidthe export duty before the oil was put on board, hut no entry was madeor passed under the provisions of section 59 of the Customs Ordinance.
The present charge has arisen on a consignment of 1630-458 tons of'naked unrefined coconut oil shipped on the vessel ss. Iris Bank. Thevalue of the coconut oil purchased from the Commissioner of CommodityPurchase and shipped on the vessel ss. Mount Mansfield was duly paid,for and customs duty due thereon either paid or secured as required bythe Customs Ordinance. The 1630-458 tons of coconut oil put on boardthe Iris Bank by Messrs. Wijesekera & Co., Ltd., were purchased bythem from the Commissioner of Commodity Purchase and duly paid-for and the necessary licence was obtained therefor. The local agentsof the Iris Bank, Messrs. Aitken Spence & Co., Ltd., were paid by Wije-sekera & Co. a sum of Rs. 112,533-54 being the freight for the said,shipment of coconut oil. Wijesekera & Co., Ltd., purchased the oil fromthe Commissioner of Commodity Purchase, which oil was stored in theGovernment Bulk Oil Installation (the oil tanks at Summer Hill). Thisquantity of oil was upon an allocation made by the Commissioner ofCommodity Purchase supplied by Messrs. J. H. Vavasseur & Co., Ltd.,and the British Ceylon Corporation. Those two companies were probablyin charge of the Oil Installation. No bill of entry was passed in respect-of this shipment in terms of section 59 of the Customs Ordinance. Mr.Turpie, the Lloyds’ surveyor, issued his certificate giving the total quantityof oil pumped into the hold of the Iris Bank, the quantity being 1630-458.The actual quantity pumped could not have been ascertained until thecertificate of the Lloyds’ surveyor was received. A sample of the oil-pumped into the hold of this vesssel was taken and duly analysed by theGovernment Analyst. All payments due to the various parties concernedexcept the customs duty was duly paid by Messrs. Wijesekera & Co.,.Ltd. The learned Magistrate by a careful and full analysis of the evidenceha£ found tha«fc all matters relating to the shipment was attended to bythe accused as Managing Director of the company. The learned Magistrate =
f j, A. DE SILVA .7.—Principal Collector of Customs v. Wije&ekera
21
htts found that the accused as Director of the company was aware thatit had to -pay the export duty on the coconut oil to the Customs not-withstanding the letter P 42. This letter P 42 looms large in this case.Now this was a letter sent by Commissioner of Commodity Purchaseto the Principal Collector of Customs and it runs as follows: “ I have thehonour to iform you that the undemoted shipments of coconut oilwill be effected on the above vessel on my behalf. Please issue shippingorder direct h ermit shipment. Inspect shipment.
Messrs. J. H. Vavasseur & Co., Ltd.. .807 tons
Messrs. British Ceylon Corporation., Ltd. . .807 tons
614 tons ”.
This was in a cyclostyled form which was in use when the Commissionerof Commodity Purchase was the sole exporter of coconut oil. The wordswhich were inapplicable in this instance, such as, “ on my behalf ”,“ issue shipping orders direct ”, and “ inspect shipment ” would seemto have been not deleted before Biddell signed that letter P42 on behalfof the Commissioner of Commodity Purchase. This letter is dated the23rd November, 1948. Under the same date letter P41 was sent by theAssistant Controller of Export (coconut products) to the PrincipalCollector of Customs in which it was stated that the shipper was Wije-sekera & Co., Ltd. It does not seem quite clear how the Customs officialscould have made any mistake about the identity of the shipper in theface of this letter P 41. The Commissioner of Commodity Purchase wouldappear to have been allowed the concession of delivery to the PrincipalCollector of Customs the usual bill of entry on a date subsequent to theexport of goods.
Section 59 of the Customs Ordinance after making provision for thedelivery of a bill of entry, &c., and for payment of duties and dues inrespect of goods mentioned in such entry goes on to say “ if such goodsare removed from the warehouse or other place appointed for shipmentbefore such entry is passed and all duties paid, and in the absence of anyexplanation to the satisfaction of the Collector the same shall be for-feited, and such forfeiture shall include all other goods which shall beentered or packed with them as well as the packages in which they arecontained ”.
The resulting position is clearly this. Wijesekera & Co., Ltd., of whichthe accused is the Managing Director who on behalf of the companyattended to all the arrangements regarding the export of this quantityof oil has failed to enter the bill of entry and pay the necessary duty anddues to the Collector of Customs. There is no gainsaying the fact that theaccused was( well aware and was concerned in the export of this consign-ment of oil. The knowledge and intention of its servants have to beimputed to the body corporate. Vide Director of Public Prosecutions v.Kent and, Sussex Contractors, Ltd., and anotherL Viscount Caldecote
C.J. has thus observed in the above case : “ Bearing that in mind, I
1 {1944) 1 A, E, B, 119,
22 H. A.DE SILVA J.—Principal Collector of Cu toms v. IFijesekera.
think that a great deal of the argument of counsel for respondents as towhether you can impute to a Co. the knowledge or intent which (the agentof the company has, falls to the ground, because although the directorsor general manager of a company are its agents, a company is incapableof acting or speaking or even thinking except in so far as its secretary orgeneral manager or directors and so on have either spokeh, acted orthought”. In R. v. I. C. R. Haulage, Ltd. 1, the Court of Criminal Appealheld, “ whether the criminal act of an agent including his s('ate of mind,intention, knowledge or belief is the act of the company employing himdepends on the nature of the charge, the relative position of the officeror agent to the company and other relevant facts and circumstances.In the present case the fraud of Robarts was fraud of the company ”.See also Moore v. L. Rresler, Ltd. 2. It has been held that error in regardto the date of the commission of an offence is never material unless timeis of the essence of the offence. Vide judgment of Soertsz J. 3
The section of the Customs Ordinance which needs careful considerationis section 128 in order to determine the charges that are laid against theaccused. Section 128 runs thus, “ every person who shall be concernedin exporting or taking out of the Island or attempting to export or takeout of the Island any prohibited goods or any goods the exportation ofwhich is restricted contrary to such prohibition or restriction, whetherthe same be laden for shipment or not and every person who shall ex-port or attempt to export any goods liable to duty the duties for whichhave not been paid or secured, or in any manner deal with any goodsliable to duties of customs with intent to defraud the revenue of suchduties or any part thereof, or who shall be knowingly concerned in anyfraudulent evasion or attempt at evasion of such duties or any partthereof, shall in each and every of the foregoing cases forfeit either treblethe value of the goods, or be liable to a penalty of one thousand rupeesat the election of the Collector of Customs ”.
It is obvious that in order to bring a person within the ambit of section128, fraud is a necessary element to be proved. There must be proof thatthe person concerned was guilty of fraud. In fact learned Acting Soli-citor-General very properly conceded that at least on counts one andthree of the charge the element of fraud on the part of the accused hadto be proved by the prosecution, such as deception, &c. His argumentis that under section 59 of the Customs Ordinance a non-payment ofall duties and dues involves a forfeiture of the goods. A reading of section59 shows that the forfeiture is in respect of the goods for which the billof entry was not delivered and for which the duties and dues were notpaid and also other goods which shall be entered or packed with them aswell as the packages in which they are contained, in the absence of anyexplanation to the satisfaction of the Collector. In this instance theCollector purported to act under section 128 of the Customs Ordinancewhen he forfeited treble the value of the goods which amountnhe reducedto two million rupees in the exercise of his discretion as authorised by theOrdinance. The grand total of the export duty and dues in respect of the
(j
i {1944) 1 A- E. R. 691.2 (1944) 2 A. E'. R. 515.
s S. C, 826—M, C. Avissawetta.
H. A. DE SILVA J.—Principal Collector of Customs..v. Wijesekera 23
shipment • came to its. 529,888-25, vide evidence of Mr. Thambiah,Collector of Customs.
The learned Magistrate has, in his judgment, analysed section 128and has come to the conclusion that in order to bring home the guiltto the accuS d it was incumbent upon the prosecution to prove an elementof fraud on ^he part of the accused in respect of all three counts of thecharge. The ontention of the learned Acting Solicitor-General is that oncount 2 no question of fraud arises. The mere non-payment of exportduty and dues results in the accused being liable criminally.
The argument of the learned counsel for the accused-respondent isthat section 128 falls within part 12 of the Customs Ordinance and thatsaid part has the following heading, " Smuggling ”, “ Seizures ” “ and pro-secutions generallyHe argues that section 128 of the Customs Ordinance
is intended to prevent smuggling, &c., of goods. He supports the findingof the learned Magistrate that the prosecution must prove fraud andfraudulent intent to sustain the charge under every one of the three counts.In my opinion that contention must succeed. The first count in the chargeruns as follows :—“ was knowingly concerned in the fraudulent evasion ofthe customs duties …”. The wording of the 1st count follows that
in the last part of section 128. The wording of the 3rd count follows more orless words in the middle part of the said section—“ in any manner dealwith any goods liable to duties of customs with intent to defraud therevenue ….”. The wording of count 2 follows that used in the
earlier part of section 128 which runs thus—“ every person who exportsor attempts to export any goods liable to duty the duties for which havenot been paid secured ….”. Section 128 read as a whole clearly
indicates that the following words “ with intent to defraud the revenue ofsuch duties or any part thereof” qualified both the sentences “ everyperson who shall export any goods liable to duty, the duties for whichhave not been paid or secured ” and “ in any manner deal with any goodsliable to duties of customs ”. Now has the prosecution successfully broughthome to the accused the charge of fraud ? That leads one to the question,What is fraud? I have been referred to the case of Robert Abraham Cohen x.Lord Chief Justice who delivered the judgment of the Court in this casemade the following observation—“ another ingredient of the offence is theintent to defraud, and of this the jury should be reminded. But as in allcases where an intent to defraud is a necessary ingredient, the intent mustusually be inferred from the surrounding circumstances. If a jury issatisfied that the defendant knew, which, of course, would include a casein which he had wilfully shut his eyes to the obyious, that the goods wereuncustomed, and he had them in his possession for use or sale, it wouldfollow, in the absence of any other circumstance, that he intended todefraud the revenue. That there may be cases where the circumstanceswould negateve the intent is possible, but ordinarily speaking it is indeeddifficult to see how it could be found that he did not intend to defraudthe revenue, certainly in such a case as the present, where the appellantnot onlyhad the goods in his possession for the purpose of selling but toldlies to the officers when he challenged on the matter ”. » 1
1 (1950) 34 Criminal Appeal Reports 239 at p. 245.
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ti. A. DE StLVA J.—Principal Collector of Customs v. Wijeseherd
The principle enunciated in this case was followed by the Queen’sBench Division Divisional Court in Sayce v. Coupe1. In Cohen’s casethe Lord Chief Justice had used the words “ had wilfully shut his eyes tothe obvious This leads one to a consideration of the meaning of thewords “ wilfully ” as understood in a penal statute. In ChellapAia v. Commis-sioner of Income Tax 2 Basnayake J. has considered the imeaning of thewords “ wilfully with intent to evade tax in a criminal prosecutionBasnayake J. thus observed, “ in order to understand the scope of the sec-tion it is necessary to ascertain the meaning of the words ‘ wilfully ’ * evadeThe dictionary gives the following meaning of the word ‘ wilfully ’: ‘ withfree exercise of the will; voluntarily; in law, designedly, as opposed to in-advertently; in a penal statute, purposely, with evil intent’The meaning
of the word “ evade ” is given by Basnayake J. in the same case ; heobserves thus, “ the word ‘ evade ’ has several meanings according to thedictionary. It means: ‘ to avoid by artifice ; elude or get away by craftor force ; save oneself from, as an impending evil; to escape ; get away ’.It is also used in the sense of ‘ defeat the intention of the law whilecomplying with its letter ’
The facts in this case do not show that the accused or the companyfor whom he was acting resorted to any misrepresentation or under-handcontrivance or any other unlawful act deliberately or purposely with theevil intent of depriving the revenue of duties and dues.
The accused has in a lawful manner by taking lawful steps secured theloading of the oil on the vessel Iris Bank. The Collector of Customs un-doubtedly was aware of the fact that his oil was put on board the vessel.Apart from the documentary and oral evidence led in this case whichundoubtedly shows that the Customs authorities were aware of the loadingof this oil on this vessel by the accused or his company in compliance withthe requirements of section 64, the Master of the ship would have un-doubtedly apprised the Customs authorities that the quantity of oil wason board this vessel when it left the Port of Colombo bound for its desti-nation. One is not considering the civil aspect of the claim made by theCollector of Customs which will be duly considered in the District Court ofColombo. The result of a criminal prosecution does not in any manner affectthe rights of parties in the civil suit. The negligence or otherwise on thepart of officials of the Customs is beside the point in this case. All that weare concerned in this case is whether the accused’s action in omitting to paythe customs duty and other Port dues in the circumstances deposed toamounts to an act done with intent to defraud the revenue or duties or anypart thereof or any fraudulent evasion or attempt at evasion of such dutiesor any part thereof.
The consideration of the evidence taken as a whole and the circumstancesin this case do not, in my opinion, prove the element of fraud or fraudu-lent evasion as contemplated in section 128 in respect of the^uty and duesof this shipment of oil.
I am, therefore, of opinion that the learned Magistrate has arrived at acorrect verdict and the appeal is dismissed.r
•Appeal dismissed.
44 Weekly Notes 473.
2 (1951) 52 N. L. R. 416.