2010 (2) TMI 617 - HC - Customs

Confiscation of goods - of foreign origin - smuggled into India - provisions contained under Section 124 of the Act provide that no order of confiscating any goods or imposing any penalty on any person shall be made under the said Chapter unless the owner of the goods or such person is given a notice enabling him to provide reasonable opportunity of being heard - during the course of proceedings owner as well as other interested persons shall have right to raise their claim - matter remitted back to the Joint Commissioner - appeal is allowed

Summary

Issues:
1. Interpretation of Section 121 of the Customs Act, 1962.
2. Claim of ownership and entitlement for notice under Section 124 of the Customs Act.

Issue 1: Interpretation of Section 121 of the Customs Act, 1962
The case involved an appeal under Section 130 of the Customs Act against an order passed by the Customs Excise & Service Tax Appellate Tribunal. The Tribunal remitted the matter for fresh decision after serving a notice under Section 124 of the Customs Act. The dispute arose from the seizure of 14 gold biscuits from Nepali nationals suspected of smuggling. The appellant argued that the seized amount of Rs. 2,50,000 was the sale proceeds of smuggled gold, relying on Supreme Court judgments. However, the Tribunal found no evidence linking the amount to the confiscated gold biscuits. The High Court concurred with the Tribunal's finding that the amount was not proven to be from the sale of the confiscated gold.

Issue 2: Claim of ownership and entitlement for notice under Section 124 of the Customs Act
The controversy centered around the amount of Rs. 2,50,000 seized from Krishan Prasad Keshari during a search operation. Keshari claimed the money was given to him by another individual for delivery. Despite his statement, the amount was confiscated. Another individual, Rajesh Kumar Soni, claimed ownership of the amount. The High Court emphasized that under Section 124 of the Act, any person with an interest in the seized items should be given a notice and an opportunity to be heard. The Court rejected the appellant's argument that notice should only be given to the owner, stating that all interested parties have the right to raise their claims and be heard. Therefore, the Court affirmed that notice should have been issued to Rajesh Kumar Soni.

The High Court allowed the appeal in part, refraining from making a final decision on the ownership issue and leaving it open for further adjudication if necessary. The matter was remitted back to the Joint Commissioner, Customs, Lucknow, with instructions for expedited adjudication of the claims within a specified timeframe. The Commissioner was directed to decide the controversy impartially based on the evidence on record.