TMI Blog2010 (10) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 By the above Petition, filed under Article 226 of the Constitution of India, the Petitioner prays for, (i) setting aside the Order in Original dated 22/05/2008, the Order in Appeal dated 11/06/2008 and the Order in Revision dated 25/06/2008 passed by the Central Government; (ii) that the Petitioner be allowed to take the miscellaneous items and the medicines confiscated by the Customs Department by setting aside confiscation on such terms and conditions as this Court deems fit; (iii) that the Petitioner be granted compensatory costs by imposing same on the Respondents jointly and severally for retaining the passport of the foreign national like the Petitioner for a period of 75 days; (iv) that the Respondents be directed to pay the Petitioner jointly and severally the compensation in the sum of Rs.13,65, 490/being equivalent of the value of Life Saving Medicines with interest thereon at the rate of 24% p.a. from the date of seizer till payment; and (v) that the Respondent No.4 i.e. Additional Commissioner of Central Excise, Raigad Commissionerate, be directed to pay compensatory cost to the Petitioner for this illegal and unauthorized act. FACTUAL MATRIX. 2 The factu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration forms and the same were accepted by the Customs Authorities. He further stated that he had made certain purchases out of the said amount of US $ 52,250. However, on account of the phone call received from his wife in Nigeria, he had to pre-pone his departure and accordingly he left India on 04th April 2008. Thereafter he arrived in India again on 14th April 2008 and out of the said amount he made purchases of medicines including Life Savings Drugs which have been valued by the Customs Authorities at Rs. 13,65,490/and also made certain purchases like stationery items, dress materials etc. amounting to Rs.66, 900/. The Petitioner claims that he visited the office of the Customs Authorities and requested for release of his passport as he wanted to go back to Nigeria. However, according to him, the said request was of no avail as no heed was paid by the Customs Authorities to his request. The Petitioner's further statement was again recorded on 24th April 2008 in which he stated that for the said medicines he did not have any Doctor's prescription and that the said medicines have been purchased by him as he had an order from one Anambra State Government Board General Hospita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere fulfilled by the Appellant as he had the copies of purchase invoices showing the licence in the form 20B or 21B. The Commissioner of Customs further observed that the goods in question cannot be held as bonafide baggage and since they were not declared truly, the Commissioner of Customs found no reason to interfere with the said Order in Original. Aggrieved by the said Appellate Order dated 11th June 2008, the Petitioner filed a Revision Application before the Central Government. The Central Government rejected the said Revision Application by the impugned order dated 25th June 2008. The Central Government reaffirmed the findings of the Lower Authorities. The Central Government, inter alia held that export of commercial quantities of non-prohibited goods as part of baggage has been allowed by the Department in case the passenger concerned is able to establish that the money used for purchase of the commercial goods has been brought into the country in a legal manner and the same has been declared on arrival in India. The Central Government observed that in the instant case the Applicant i.e. the Petitioner herein had failed to do so; that the goods were in commercial quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the said submission, the learned counsel for the Petitioner relied upon the judgment of the Apex Court reported in (2008) 3 SCC 674 in the matter of Suresh Nanda v/s. Central Bureau of Investigation. (II) Challenge to the Orders passed by the Authorities leading to impugned order dated 25th June 2008 : The principal ground of challenge to the orders passed by the authorities is on the ground of violation of principles of natural justice whilst passing the Order in Original dated 22nd May 2008. It is submitted by the learned counsel for the Petitioner that the Respondents were obliged to issue show cause notice to the Petitioner and, since no show cause notice was issued, the order has been passed in breach of principles of natural justice. The learned counsel for the Petitioner in support of his submission that show cause notice ought to have been issued to the Petitioner relied upon a Circular dated 27/7/2000 which, according to the learned counsel for the Petitioner, obligates upon the Respondents to follow a proper procedure by issuing show cause notice and, also relied upon a Circular dated 20/1/1997, which according to him, stipulates that even if a party wants to waiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orthern Plastics Ltd v/s. Collect of Customs and Central Excise wherein the Apex Court has held that since the situation has been brought about by the department by its own acts, the department cannot now escape from the liability of returning to the assessee money value of the goods. The learned counsel for the Petitioner further submitted that the officers who were concerned would be liable to pay compensation to the Petitioner for the said illegal confiscation and for the said purpose, the learned counsel for the Petitioner sought to rely upon the judgment of the Apex Court reported in 2006 (196) ELT 257 (SC) in the matter of Sandvik Asia Ltd v/s. Commissioner of Income TaxI, Pune. The learned counsel for the Petitioner relying upon the said judgment submitted that the officers who were concerned with the seizure/retention of passport of the Petitioner and the confiscation of the goods would become liable to pay compensation to the Petitioner. 5 Per contra, it is submitted on behalf of the Respondents by the learned senior counsel that retention of passport of the Petitioner was on account of the fact that the entries in the said passport disclosed that the Petitioner, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed by the Petitioner on the circulars dated 27.7.2000, 20.1.1997 and 1.3.1995 is misplaced in view of the fact that the conditions prescribed by the said circulars have not been satisfied by the Petitioner, inasmuch as the Petitioner has failed to disclose the source of the funding of the said purchases. The learned senior counsel submitted that the Petitioner is not entitled to rely upon the Customs Declaration Form dated 4.4.2008 as the Petitioner on his return to Nigeria on the said day ought to have declared the the currency which he was carrying with him to Nigeria and ought to have filed Customs Declaration Form on his arrival in India on 14.4.2008. CONSIDERATION : 7 The matter can be conveniently dealt with under two Heads, A) Issue of Passport and, B) Challenge to the orders. A) Issue of Passport : It is an undisputed fact that the Petitioner was detained on the night of 19/20th April 2008 whilst he had checked in for boarding the Kenya Airways Flight to Nigeria. It is further an undisputed fact that the Petitioner was carrying 15 pieces of baggages which he had checked in. On examination of the said baggages, it was found that he was carrying huge quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd baggage tags bearing Nos.KQ189286 to KQ189300 placed opp. in an envelope. Also the E.T.C. papers alongwith the panchanama are placed opp. As per the instruction of J.C./A.P., the file along with pax Shri Akpuba may be handed over to A.I.U." 8 In our view the reasons given by the Respondents for retention of the passport of the Petitioner cannot be found fault with. It would be relevant to note that the Respondents were not dealing with any Indian National but a National of a foreign country who was illegally trying to take goods out of India as and by way of personal baggage in commercial quantities. Therefore, the reliance placed by the Petitioner on the judgments of the Apex Court cited (supra), in our view, in the facts of the case, is misplaced. 9 It would also be relevant to note that right from the adjudicating authority to the revisional authority, the Petitioner had never made a grievance about retention of his passport by the customs authorities and in fact had not sought a relief before any of the authorities praying for return of his passport. It would, therefore, have to be understood that the Petitioner had also accepted the position that once the adjudicato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was raised to the effect that in spite of Petitioner having not waived the show cause notice it has been wrongly recorded that the Petitioner had waived the show cause notice. Thereafter before the Revisional Authority also no such grievance was made. It is also required to be noted that from 30th April 2008 when the order of seizure of the goods in question came to be passed, till 22nd May 2008 when the Order in Original came to be passed, no such grievance or letter was addressed by the Petitioner, though he had addressed two letters dated 14th May 2008 and 15th May 2008 as regards the manner in which he had procured the medicines in question. In the light of the aforesaid fact therefore we do not find any merit in the contention of the Petitioner that principles of natural justice have been violated as the Petitioner had himself waived the show cause notice. Reliance of the learned counsel for the Petitioner on the Circulars dated 20/1/1997 and 27/7/2000 does not take the Petitioner's case any further in view of the fact that the said circulars have been issued by the Central Board of Excise Customs for internal guidance. The said circulars cannot be construed to mean t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is anything repugnant in the subject or context ............. ............. (f) `retail sale' means a sale [whether to a hospital, or a dispensary, or a medical, educational or research institute or to any other person] other than a sale by way of wholesale dealing;] (g) `sale by way of wholesale dealing' means sale to a person for the purpose of seeling again and includes sale to hospital, dispensary, medical, educational or research institution.]" "Rule 61 :Forms of licences to sell drugs ( 1) A licence [to sell, stock, exhibit or offer for sale or distribute] drugs other than those specified in Schedules C, C(1) and X and by retail on restricted licence or by wholesale, shall be issued in Form 20, Form 20A or Form 20B, as the case may be : Provided that a licence in form 20A shall be valid for only such drugs as are specified in the licence. (2) A licence [to sell, stock, exhibit or offer for sale or distribute] drugs specified in Schedules C and C(1) excluding those specified in Schedule X, by retail on restricted licence or by wholesale shall be issued in Form 21, Form 21A or Form 21B, as the case may be: [Provided that a licence in Form 21A sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event of any change in the constitution of the firm operating under the licence. Where any change in the constitution of the firm takes place, the current licence shall be deemed to be valid for a maximum period of three months from the date on which the change takes place unless, in the meantime, a fresh licence has been taken from the Licensing Authority in the name of the firm with the changed constitution. Form 21B [See Rule 61(2)] Licence to sell, stock or exhibit [or offer] for sale, or distribute by wholesale drugs specified in Schedules C and C(1) [excluding those specified in Sch.X] 1,................................................ is hereby licensed to sell, stock or exhibit [or offer] for sale, or distribute by wholesale on the premises situated at ................................... the following categories of drugs specified in Schedules C and C(1) [excluding those specified in Sch. X] to the Drugs and Cosmetics Rules, 1945. Categories of drugs 2 This licence shall be in force from................. to .................... 2A [The sale shall be made under the personal supervision of a competent person (Name of the competent person)] 3 This lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , stock, exhibit or offer for sale or distribute the drugs other than those specified in Schedules C, C(1) and X in Form 20, Form 20A and Form 20B as the case may be. The conditions in clause 3 obligates the seller i.e. wholesaler to sell any drug only to a person holding requisite licence to sell, stock or exhibit for sale or distribute the drug. Exceptions are mentioned in the said clause (3) (ii) in which exceptions are included Government authorities or a manufacturer of beverages etc where such drugs are required for processing the products. 12 In the instant case, the Petitioner has laid much store on the circulers governing goods to be carried as and by way of bonafide baggage. The circular dated 1/3/1995 is relevant and the same is reproduced herein under : Baggage---Export of commercial goods Instructions Circular No.17/95Cus., dated 1-3-1995 [From F.No.520/118/93Cus.VI] Government of India Ministry of finance (Department of Revenue) New Delhi Subject : Export of Commercial goods as baggage - Instructions regarding The undersigned is directed by say that in terms of para 129 of the Exim Policy (199297), bona fide personal bagga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner on his arrival in India on 14th April 2008 had not declared any foreign currency. The Petitioner's case is that on his previous visit i.e. on 3rd April 2008 he had declared foreign currency amounting to US $ 52,250 for which he had the currency declaration form. It is required to be noted that the Petitioner had returned to Nigeria immediately on 4th April 2008 and, therefore, when he arrived again on 14th April 2008 he ought to have declared the foreign currency which he had brought with him. It is the case of the Petitioner that he had made purchases i.e. the medicines and other items out of the said amount of US $ 52,250 which he had brought on his earlier visit on 3rd April 2008 and which he had converted into Indian currency in the grey market i.e. unauthorised channels. Therefore, the facts, as emerging from the Petitioner's case, are firstly, that he had not declared any foreign currency on arrival of India on 14th April 2008 and that he had converted the foreign currency into Indian Rupees in the grey market. Though the circular permits export of goods as passenger's baggage but the same would be permissible only if source of funding was legal and inasmuch as it has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner and which were sought to be exported by way of personal baggage cannot be said to have satisfied the conditions mentioned in the Circular dated 1/3/1995, in our view, it is not necessary for us to go into the aspect as regards Petitioner's eligibility to purchase the said medicines in the wholesale market in Mumbai. The submission of the learned counsel for the Petitioner that there is no prohibition in the Drugs and Cosmetics Act or the Rules thereunder for the purchase of the medicines in the quantities purchased by the Petitioner. Assuming it to be so, the said submission cannot be countenanced in the teeth of the fact that the source of funding of the Petitioner for the reasons stated by us herein above cannot be said to be legal and, therefore, the contention of the Petitioner that the confiscation of the goods is illegal cannot be accepted. Though it was sought to be contended on behalf of the Petitioner that the order suffers from non application of mind inasmuch as the order refers to Section 113(m) of the Customs Act which is non existent. In our view, merely because a wrong section is quoted would not make the order illegal as the power of confiscation in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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