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TMI Blog1986 (10) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the proceedings under Section 110 and 124 of the Customs Act, 1962 and the corresponding provisions under Sections 66 and 78 of the Gold (Control) Act, 1968 are independent or inter-dependent." Under the said order they had directed that the papers be placed before the President of the Tribunal for such action as deemed fit and necessary under Section 129C(5) of the Customs Act and Section 81D of the Gold (Control) Act, 1968. Thereafter the President had directed that in accordance with the above provisions the matter be heard by the present Bench. It is in these circumstances that we have heard submissions of both sides on the point of difference between the two Members of the Bench which passed the order dated 13-2-1986. 2. We have heard Smt. Archna Wadhawa, Advocate for the appellants and Smt. Nisha Chaturvedi for the Department. 3. The facts of the case are set forth in detail in the order of Shri Mandal dated 3-12-1985. He has further mentioned therein that the learned Advocate for the appellants submitted that she had no arguments to submit on the factual question of the recovery of the gold from the appellants. Her submissions were entirely on points of law an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Bench constituted in pursuance of the order dated 13-2-1986 should in any event have consisted of Shri M. Santhanam and D.C. Mandal, Members also. But when it was pointed out to her that this submission would run counter to the very provisions in Section 129C of the Customs Act she withdrew her submission in this regard. In the circumstances we overruled the submissions of Smt. Wadhawa about our jurisdiction to hear the matter. Thereafter both sides were heard on the merits of the issue. 5. The provisions that are relevant to the matter before us are Sections 110 and 124 of the Customs Act and Sections 66 & 79 of the Gold (Control) Act. For purpose of convenience they are extracted below: "Customs Act - Section 110 Seizure of goods, documents and things:- (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. (2) & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny rule or order made thereunder; (b) any conveyance or animal which has been, or is being, or is attempted to be, used for the transport of any gold in relation to which any provision of this Act or any rule or order made thereunder has been, or is being, or is attempted to be, contravened. (3) Any document or other thing seized under sub-section (2) shall not be retained by the Gold Control Officer for a period exceeding six months from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the administrator for such retention is obtained: Provided that the Administrator shall not authorize the retention of the document or other thing for a period exceeding thirty days after all proceedings, for which the document or other thing is useful or relevant, are completed. (4) The person from whose custody any document or other thing is seized under sub-section (2) may make copies thereof or take extracts therefrom in the presence of the Gold Control Officer or any other person empowered by him in this behalf, at such place and at such time as the Gold Control Officer m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Customs v. Charan Das Malhotra 1983 E.L.T. 1477 (S.C.) = AIR 1972 SC 689 notice must be held to have been issued beyond the time prescribed under Section 110 of the Customs Act and, therefore, under Section 110(2) the seized articles were liable to be returned to the person from whom the seizure had been effected. In the present case it appears that time had not been extended under Section 79 of the Gold (Control) Act. It is in these circumstances that it has to be determined whether the proceedings for confiscation in pursuance of the show cause notice issued under the Customs Act or the Gold (Control) Act were valid and whether any valid order for confiscation could be passed in such proceedings in spite of the fact that the seized goods were liable to be returned in view of the failure to give the statutory notice within the time prescribed therefor. Both sides have relied upon a series of decisions as supporting their respective contentions. We shall therefore first set out these decisions and the observations therein and, thereafter, apply the principles laid down therein to arrive at our conclusion on the question referred to us. 7. The first decision to be taken n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authority under Section 124 or other provisions of the Act." 9. The Punjab & Haryana High Court dealt with this question in Munilal v. Collector of Central Excise, Chandigarh (AIR 1975 Punjab & Haryana 130). After referring to the decision of the Supreme Court cited supra and after observing in paragraph 8 that seizure of goods and confiscation of the same are distinct and different matters, the High Court observed in paragraph 9 as follows: "Therefore if my reading of the provisions contained in Section 124 and 110 of the Act is correct, there appears to be no bar for giving the show cause notice as contemplated by clause (a) of Section 124, even after the return of the seized goods because of failure to issue such notice within six months or the extended period thereafter as prescribed in sub-section (2) and proviso thereto, of Section 110. When the provisions contained in the proviso to sub-section (1) of Section 110, clause (a) of Section 124, and sub-section (2) of Section 126 of the Act are looked at, it cannot be gain-said that adjudication of confiscation of goods can be recorded even without seizure of the goods. Similarly, personal penalty can be imposed even wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and thirdly, such owner or person is to be given a reasonable opportunity of being heard in the matter. None of the three conditions precedent even suggests that there is a limitation on the exercise of the power either as regards the time or existence of seizure. On a plain reading of Section 124 it will be open even to the Competent Officer to pass an order of confiscation of goods or imposing any penalty without seizing any goods or after returning the goods under the proviso to sub-section (2) of Section 110 for failure to initiate proceedings within the prescribed time. An investigation machinery cannot be equated with a limitation upon a substantive power contained in Section 124; more so, when the only consequence that follows for failure to give notice within the prescribed time is laid down in Section 110(2), namely return of goods to the person from whose possession they were seized. Even if the provisions of Sections 110 and 124 are to be harmoniously read, it will not be possible for us to imply such a fetter, restriction or limitation on the exercise of the powers conferred by Section 124." 11. A single Judge of the Delhi High Court in Sardar Kulwant Singh v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance of these decisions have been extracted in the order of Mr. Mandal. The full reports are not available for our perusal. We note from the order of Shri Mandal that these two judgments had also held that period mentioned in Section 110(2) was relevant only for the purpose of the seizure and the liability for return of the seized articles on failure to issue notice under that section within the time prescribed and not with reference to the validity of the notice with reference to other provisions of 15. As against the above decisions which had held that proceedings for confiscation would not be invalid for the reason that notice in that regard had been issued beyond the period mentioned in Section 110, there are certain other decisions of High Courts and one decision of this Tribunal which had held to the contrary. The Gujarat High Court in the case of A.M. Soni v. Union of India (AIR 1972 Gujarat 126) held that on failure to serve a notice within the period prescribed under Section 110 a vested Civil right arose for return of the seized goods. The question whether the proceedings for confiscation could continue even thereafter was not specifically considered in the said d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated under Section 110 (2) of the Customs Act other proceedings for confiscation under Section 124 would not be legal or valid. 20. The decision of this Tribunal relied on by the appellant is Vishwanath Pandey v. Collector of Customs (1984 (16) E.L.T. 404). The Tribunal in that decision took note of the Madras High Court decision in Amruthalakshmi case but chose to follow the decision of the Calcutta High Court in 1982 E.L.T. 902 and the single Member Bench decision of the Delhi High Court in 1983 E.L.T. 1750. Following the said two decisions the Tribunal held that proceedings for confiscation could not be continued if notice had not been given within 6 months from the date of seizure. 21. It is with reference to the above cited decisions that we have to arrive at a conclusion on the issue before us. The contention of the learned counsel for the appellant is that the provisions of Section 110 and 124 have to be harmoniously construed so that neither provision may become redundant. According to her if the period of limitation mentioned in Section 110 is not applied with reference to proceedings under Section 124 then the very object of directing return of the seized goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior seizure. On this question of harmonious interpretation urged by the learned counsel for the appellant before us, the Bombay High Court has gone into that matter and has held that even if the provisions of Section 110 & 124 are to be harmoniously read it will not be possible to imply a fetter or restriction on the exercise of the powers conferred under Section 124. 23. As earlier noted, the Supreme Court had in the Charan Das Malhotra case specifically stated that Section 124 does not lay down any period within which notice required under the section has to be given and that the period laid down in Section 110(2) affects only the seizure of the goods and not the validity of the notice. That would only mean that the Supreme Court has laid down that the mere fact that notice had been given subsequent to the expiry of the period of 6 months mentioned in Section 110 would not, for that reason, invalidate proceedings under Section 124 resulting in an order for confiscation of the seized goods. This decision of the Supreme Court has been taken into consideration and construed in the above manner by the Madras, Bombay and Punjab & Haryana High Courts in their decisions cited s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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