TMI Blog2000 (7) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of seizure of the said containers by respondents and show cause notice dated 14th August, 1998 be quashed. The case of the petitioner is that M/s. Nitu Enterprises of Nepal placed an order to M/s. Kumar Trading Co. for the supply of ball-bearing in question. They were shipped from Dubai to Nepal via India. A contract was entered into between M/s. Kumar Trading Co. and M/s. Nitu Enterprises in June, 1997. In pursuance of the contract the petitioner received a Letter of Credit bearing No. BNR/T/32/629 for US $ 3100 and BNR./T/32/630 for US $ 3500 from the said M/s. Nitu Enterprises of Nepal for supply of aforesaid consignment. After the aforesaid contract M/s. Nitu Enterprises requested the petitioner to ship 10 times quantity of the goods of the value of the Letter of Credit with a promise that M/s. Nitu Enterprises will send the revised Letter of Credit to the petitioner for the enhanced quantity of goods. On this assurance the said quantity of goods were shipped and the goods were in transit to Nepal for M/s. Nitu Enterprises and it reached Calcutta Port there it was seized by the Customs Authorities. The goods were not got cleared by M/s. Nitu Enterprises in terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransit Declaration and a detailed procedure has been laid down and on that basis the Customs Authorities could not have seized these goods. The Learned Single Judge found that there is no reason disclosed for issuance of the show cause notice with regard to these goods which are being imported by a Nepalese party through Calcutta Port under the Transit Treaty of the India and Nepal Government. More so, the Learned Single Judge also found that there was no material on record to show that the goods were in fact meant for consumption in India. The Learned Single Judge found that since the petitioner who has exported these goods to the party in Nepal and the party in Nepal has not honoured the commitment they are entitled to take back the goods to their original destination and therefore the seizure and the show cause notice issued by the Customs Authority is totally without jurisdiction. Accordingly, the Learned Single Judge set aside the seizure and the show cause notice. Hence the present appeal has been filed by the Union of India against the order passed by the Learned Single Judge. 2. We have heard the learned counsels for the parties and perused the records. The first and fore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods can be subject to confiscation under Section 111(d). Likewise, under Section 111(o) if any goods are exempted and they are subject to any condition from duty or any provision in respect of the import thereof under this Act or under any other law for the time being in force or if such condition have not been observed unless the non-observance has been permitted by the appropriate authority then the goods are entitled to be confiscated. However, after some deliberations the learned counsel did not press Section 111(d) in service and bank upon Section 111(o). A close scrutiny of Section 111(o) pre-supposes that goods should be of exempted category, but there is no exemption notification pertaining to these goods has been brought to our notice. Section 111(o) in the present case is wholly inapplicable. Exemptions are granted under the Act under certain conditions and if they are violated then the question of confiscation arises. It has not been shown to us that any such exemption relates to these goods which are being imported by one of the citizen of another country and the facility of Calcutta Port is being permitted under International Treaty. In fact, the goods were imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traffic in transit will be accepted for booing by railway from one of the agreed warehouse leased to Nepal Transit and Warehousing Co. Ltd. provided the minimum load condition as applicable in Indian Railways is satisfied." 5. The duty of the Customs Authority is to check whether the goods were in accordance with the Customs Transit Declaration and conform to the import licence wherever such licence is required, and the goods for Nepal are covered by the said licence. If these are found to be in order it shall be approved for onward transmission and further direction is to be given as to how the goods is to be transported. In pursuance of the aforesaid Indo Nepal Treaty a memorandum has also been issued and in that a proper procedure for import has been laid down. One of the procedure which is relevant is contained in Clause 9 of the Memorandum which lays down that the goods which is meant to be transported to Nepal shall be covered by insurance policy, assigned to the Collector of Customs, Calcutta. The insurance policy will cover the amount equal to the Indian Customs Duty of such goods and that be assigned to the Collector of Customs, Calcutta and the amount shall be paid to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e event of goods does not reach Nepal then the Collector of Customs can recover the Indian Customs Duty from insurance policy drawn in favour of Collector of Customs. In the scheme of things we fail to understand how could the Customs Authorities on a bare apprehension that the goods may be used for consumption in India can issue such a show cause notice. Section 111(o) cannot be stretched to the extent to include the present situation so as to enable the authorities to issue show cause notice for confiscation of the goods. As mentioned above that the scope of Section 111(o) is limited that in the event of certain exemption being granted and breach of any of the conditions then alone that will enable the authorities to invoke this provision for confiscation of such goods imported in violation of such condition. The goods does not fall in the category of exempted goods as no such exemption notification exists. The goods are covered by the Indo Nepal Transit Treaty. Therefore, we are of the opinion that Section 111(o) in the present case is not applicable. Since Section 111(o) is not applicable in the present case there is no question of issuing show cause notice or initiating procee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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