TMI Blog1991 (3) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... US $ 6,100 were recovered from one bank account book and from the hand pouch 3 white envelopes were recovered which contained US $ 5,500/-. Moreover from the specially stitched pocket of his black colour undergarment 10 pcs. of gold coins of foreign origin weighing 31 gms. each were recovered. The appellant could not produce any R.B.I permission or any other documentary evidence in support of his lawful acquisition, possession and import of aforesaid goods recovered from him. So the said gold coins and currency were seized. A statement was recorded wherein he admitted his guilt. He waived requirement of issue of Show Cause Notice to him. So the matter was adjudicated and seized gold coins and currency were ordered to be confiscated absolutely and personal penalty of Rs 10,000/- under provisions of Section 112 of Customs Act, 1962 was imposed. The appellant preferred appeal and the Collector (Appeals) dismissed the appeal. The said order has given rise to the present appeal. 2. We have heard Shri D.D. Sharma, learned Advocate for the appellant and Ms. Renuka Mann, learned DR for the respondent. 3. Shri Sharma contended that the Department should have issued Show Cause Notice. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Meantime he was also prosecuted in the Criminal Court and fined Rs. 10,000/- which he had paid on 5-12-1985 (as stated in the adjudication order). So he had sufficient time to contemplate his action and obtain legal advice if he thought fit to do so. So there is no force in this argument also. 5. In final order notification pertaining to ban on importing currency into India is not mentioned and Sub-Section of Section 112 of Customs Act under which penalty is imposed is also not mentioned. 6. In the order in original the adjudicating authority has stated gravaman of charges and therein it has been stated as under further rendered himself liable to penal action under Section 112 of the Act ibid . So neither in the charges nor in the final order specific sub-section of Section 112 is mentioned. In B. Lakshmichand v. Union of India, 1983 (12) E.L.T. 322 (Madras) it has been held that if the penal action is proposed to be taken and proceedings initiated which are likely to culminate in the imposition of penalty, then the authorities must be clear in mind as to whether clause (a) or clause (b) of Section 112 will apply or, both, and the order must make specific reference to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy. He again pleaded for leniency. 14. At the Tribunal stage, these pleadings have been reiterated without making any effort to substantiate the same. On the contrary I note that the learned Collector s had observed that the appellant had waived the requirement of show cause notice and this waiver has not been disputed by the appellant himself even at the appeal stage. 15. In fact the fact of waiver has not been denied even now. 16. In view of the above circumstances the pleading of violation of principles of natural justice cannot be accepted. 17. Furthermore the fact that the gold coins had been concealed and the manner in which they were concealed clearly shows that there was planned action on the part of the appellant to import them in violation of law. Since the fact of concealment has not been (even) contested and the offence had been admitted, therefore the plea of ignorance or innocence does not impress. 18. Furthermore it is well established that if the substance of a charge is duly communicated then, minor error or omission, if any in the mention of the appropriate sub-section (or even incorrect mention, of statement) does not vitiate the proceedings. 19. In m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency, the matter may be re-examined by the original authority in the light of the above observations. The fact that the Court has already imposed a fine could also be kept in view. 27. The appellant may be given another opportunity of being heard in the matter and may be allowed to produce the documentary evidence in support of his contentions. Thereafter the order may be passed by .the adjudicating authority in accordance with law. 28. In view of the diffence of opinion between Member (Technical) and Member (Judicial), the matter is placed before the Hon ble President for reference to a third Member for consideration of the following issues: 1. Whether in the facts and circumstances of the case the omission to mention a sub-section amounted to a serious mistake vitiating the proceedings and the order was liable to be set aside on this ground alone. 2. Whether in the facts and circumstances of the case, non-mention of the sub-section in the order amounted to only a minor technical error/omission which does not vitiate the proceedings and therefore the matter could be considered on merits. 29. I frame following issue for decision : (1) What is the legal effect of non-spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of the show cause notice and also there was a request for early decision. The Assistant Collector had imposed a penalty of Rs. 10,000.00 under Section 112 of the Customs Act, 1962. In the order-in-original there is no mention whether he had imposed penalty under Section 112(a) or 112(b) of the Customs Act, 1962. For the proper appreciation of the correct legal position, Section 112(a) and (b) of the Customs Act, 1962 is reproduced below :- 112. Penalty for improper importation of goods, etc. - Any person - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act, or (b) (b) who acquires possession of or is any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111, shall be liable (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner. Clauses (a) and (b) of S. 112 of the Act read as follows :- 112. Penalty for improper importation of goods etc. - Any person - (a) who, in relation to any goods does or omits to do any act which act or omission would render such goods liable to confiscation under S. 111 or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing , or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under S. 111;...." Clauses (i) to (v) which then follow deal with the classes of penalties, depending on the categories of goods. A plain reading of the above clauses makes it clear that they are distinct and separate. There is a possibility that the act complained of could fall within both the categories; but if the penal action is proposed to be taken and proceedings are prosecuted and if they should culminate ultimately in the imposition of penalty, then the authorities must be clear in their mind as to whether either of the above clauses would apply or both would apply. The Supreme Court with reference to S. 167 (8.a), of the Sea Customs Act, 1878, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , both the clauses could also be attracted. In the absence of such specific allegations and specific findings, it is not possible to sustain the proceedings and the ultimate orders passed thereon. If the Customs authorities take recourse to any of the clauses dealing with the penalty, their order must further indicate the amount of duty payable in respect of the goods in question which was not paid." The Tribunal had followed the said decision of the Madras High Court in the case of Collector of Customs and Central Excise, Chandigarh v. Ajit Sihgh and Another reported in 1987 (32) E.L.T. 769. Para No. 12 from the said judgment is reproduced below :- 12. Coming now to the imposition of penalty, we observe that in the order appealed against, the Additional Collector has failed to mention specifically the clause of Section 112 under which orders are passed. On this issue, the judgment of the Madras High Court in the case of B. Lakshmichand -1983 (12) E.L.T. 322 (Mad.), which has been cited by the learned Advocate, is directly on the point. It has been held by the Madras High Court that if the penal action is proposed to be taken and proceedings initiated which are likely to culmi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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