TMI Blog2014 (2) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... could have been ordered under Section 111(d) and (f) of the Customs Act, 1962. Question of scope & field occupied by Section 8(a) of the Customs Act, 1962, left open for appropriate consideration in future - order set aside - revenue to appropriate amount of duty paid by the petitioners towards duty on imported machine. If on that count, they are entitled to charge any interest in accordance with law, they are permitted to claim the same from the petitioners and recover it. The order of confiscation and penalty is also set aside - Decided in favor of assessee. - Writ Petition No. 312 of 1998 - - - Dated:- 27-1-2014 - B. P. Dharmadhikari And Z. A. Haq,JJ. For the Petitioners : Shri P. N. Kothari, Advocate For the Respondent : Shri S. K. Mishra, ASGI JUDGMENT (Per B. P. Dharmadhikari, J. ) By this petition filed under Articles 226 and 227 of the Constitution of India, the petitioners pray for quashing of an order dated 25.11.1997 passed by Respondent No. 3 Deputy Commissioner of Customs and Central Excise at Nagpur. By said order, Respondent No. 3 confiscated a machine (capital goods) Gravi Mix Magruire WSB 420, valued at Rs.5,21,396/under Section 111(d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02.09.1997 said Manager and petitioner No. 2 visited office of Respondent No. 3 and informed them. Respondent No. 3 thereafter took custody of that machine. After some inquiry, on 05.09.1997, an order detaining the said machine came to be passed. A show cause notice was then issued by Respondent No. 3 to the petitioners on 14.10.1997. The petitioners replied to it on 01.11.1997 and thereafter the impugned order came to be passed on 29.11.1997. Similarly, the fact that Airport at Nagpur came to be declared as Customs Airport on 16.05.1997 as per Section 7(a) of the Customs Act is also not in dispute. The issuance of a notification determining approved place for loading and unloading cargo by Respondent No. 2 on 28.10.1997 is also admitted. 5. In this background, Shri Kothari, learned counsel, submits that in the impugned order, independent operation of provisions of Section 7(a) of the Act has been overlooked. He submitted that the violation of Sections 33, 34 and 36 of the Customs Act, if any, is not by the petitioners but by the carrier i.e. Indian Airlines. He also submitted that the impugned order bases itself upon some material which did not form part of show cause notice and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai Airport first and thereafter upon instructions of the petitioners and after the necessary formalities were fulfilled, the Indian Airlines conveyed the goods to Customs Airport at Nagpur as per the law. This transhipment has been permitted by the Customs authorities at Mumbai. The learned counsel states that because air port at Nagpur was, by said date, already recognized as Customs Airport, Indian Airlines as also responsible Customs Officers at Mumbai allowed this transhipment. He invites attention to the impugned order to show that there is no finding of violation of Sections 33 and 34 by the present petitioners and hence machine is not confiscated in exercise of powers under Section 111(h) of the Customs Act. To show improvements in impugned order, the learned counsel has taken us through show cause notice as also through the impugned order. He contends that Section 111(d) is not attracted and Section 111(f) has been erroneously invoked as machinery is fully and properly described in import manifest. He further points out that for violation of Section 36, no confiscation is provided for in law. He contends that in this situation, the order of confiscation or direction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that identification of a person to be placed in custody of such machine at Nagpur Airport in terms of Section 45 was / is essential. Inviting attention to the provisions of Section 111 of the Act, the learned counsel states that it is not a penal provision and various breaches/ violations noted therein may in some cases overlap. The provisions of Section 111(d), (f) and (h) are rightly found to be violated. Section 124 of the Act is pressed into service to demonstrate that procedure as prescribed therein for confiscation of machine has been followed in the present matter and thereafter an option in lieu of confiscation, in terms of Section 125 , has also been extended to the petitioners. He reads out show cause notice to urge that the petitioners were noticed about violation of Sections 30, 33, 34, 36 and 55 with Section 111(d), (f) and (h) of the Act. Section 112 (a) and (b) which deals with imposition of penalty were also pointed out to the petitioners along with the communication dated 04.08.1997 which reveals knowledge with the Managing Director of Petitioner No. 1, of absence of notification of the approved place. Lastly, the learned counsel states that the provisions of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion dated 04.08.1997 by Petitioner No. 2 was not in his capacity as Managing Director of Petitioner No. 2 but in a different capacity as a representative of an organization of the industrialists. That communication, therefore, cannot be used to the prejudice of the petitioners in present matter. He further contends that important provisions like Section 7(a), Section 8(a) and Section 111 of the Act need to be interpreted by this Court in present matter and hence writ petition has been rightly entertained. 9. We have noted that the provisions of the Customs Act, 1962, prevailing in 201213 were referred to by the Counsel. The attention was also not invited to the question of transhipment permit and the Rules, regulating such transhipment. Both the counsel then read out the Goods Imported (Conditions of Transhipment) Regulations, 1995. We have also taken note of the fact that in the impugned order, no action has been taken against the carrier but then Station Manager of Indian Airlines, Nagpur, has been cautioned to be more careful in future. 10. The communication dated 04.08.1997 sent by Petitioner No. 2 in the capacity of President of Vidarbha's Economic Development Council to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be refused, the Commissioner of Customs has to extend a reasonable opportunity of being heard to the declarant. Clause (d) of Rule requires Transporter like the petitioners to execute a bond in such form and with such surety or security as the Commissioner of Customs may specify. The declarant or the Transporter has to complete the formalities for import at the Customs station of destination. Rule 4 is on terms of bond to be executed. Rule 5 is about payment of fees. Rule 6 is about putting seal on imported goods to be transferred or transhipped. In present facts, issuance of transhipment permission is not in dispute and obviously Indian Airlines, therefore, has to be was the declarant. Phrase conveyance is defined in Section 2(9) of the Customs Act, to include an aircraft. The petitioners, therefore, may have executed necessary bond as agent of the declarant. It, therefore, follows that machine has been permitted to be transhipped to Customs Airport at Nagpur by counter parts of Respondents No. 2 3 at Mumbai Airport. The carrier viz., Indian Airlines accordingly transhipped the machine from Mumbai to Nagpur. This movement, therefore, obviously is within knowledge of and wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act to confiscate the machine or then to proceed to impose penalty under Section 112(a) and (b) of the Act. However, in present matter, we need not dwell on this controversy. 14. Transhipment of machine at Nagpur, its unloading at Nagpur and efforts made by the petitioners on 02.09.1997 may rule out any intention to violate the provisions of either Section 30, Section 33, Section 34, Section 36 or Section 55 of the Customs Act on is part. Section 55 of the Customs Act is about entry of transhipped goods on arrival at Customs Airport. Such entry is presumed to be first entry recording that the machine is liable to duty and has to be entered in like manner as goods are entered on first import thereafter i.e. in terms of Section 46. Section 54 is on transhipment and stipulates that bill of transhipment is to be presented to proper officer in prescribed form. Subsection (3) enables proper officer to allow the goods to be transhipped without payment of duty subject to such conditions as may be prescribed i.e. in 1995 Regulations. The intention of the petitioners 2 3 needed to be gathered in this background. 15. Section 7 is about power of Central Government to notify and appoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 33, therefore, may not be construed as an embargo on unloading of imported goods at Customs airport. Section 111(a) lays down that any goods imported by air which are unloaded or attempted to be unloaded at any place other than customs airport appointed under clause (a) of Section 7 are liable to be confiscated. This has no reference to S. 33 or permission under it. The provisions of clause (h) state that any dutiable goods unloaded or attempted to be unloaded in contravention of the provisions of Section 33 or section 34, are also liable to be confiscated. Thus, contravention of Section 7(a) is not ipso facto contravention of Section 8(a) of the Act. Section 33 will thus get attracted only when in a given case, in customs airport, imported goods are unloaded at a place other than the place approved under Section 8(a) for such unloading without taking prior permission under Section 33 of the proper officer. Section 33, therefore, does not bar unloading at customs airport. 17. If the contention of the respondents about impracticability of implementation of Customs Act, 1962, without mention of approved place in terms of Section 8(a) or without grant of recognition to a perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed by or under the Customs Act or under any other law for the time being in force. Thus, use of Indian customs waters as defined in Section 2(28) of the Act for such import or attempt is an integral part of this clause. In present matter, the petitioners have not made any such effort. We are not in a position to accept the submission of the learned ASGI to the effect that words imported or attempted to be imported used in said clause, cannot be correlated with Indian customs waters. Similarly, clause (f) of Section 111 reads as under : any dutiable or prohibited goods required to be mentioned under the regulations in an import manifest or import report which are not so mentioned Thus, only when the machine is found not mentioned in import manifest or import report, said clause gets attracted. This is not the fact here. Apparently, this provision, therefore, is not applicable at all in present matter. Confiscation ordered under Section 111(d) and (f) of the Customs Act, 1962, in the impugned order is, therefore, unsustainable. 19. Section 112 is about imposition of penalty for improper importation. Its clause (a) is about confiscation under Section 111 while clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and almost after 16 years. In this situation, we are not inclined to refuse to act upon the cognizance taken under Article 226 of the Constitution of India because of availability of alternate and equally efficacious remedy. Had the petitioners raised objection immediately, the situation would have been otherwise. We find the judgment in the case of Durga Enterprises (P) Ltd. vs. Principal Secretary, Government of Uttar Pradesh, (supra), sufficient to answer the objection raised by the learned ASGI. 23. In this situation, we leave the question of scope field occupied by Section 8(a) of the Customs Act, 1962, open for appropriate consideration in future. The impugned order dated 25.11.1997 is quashed and set aside. The respondents to appropriate amount of duty paid by the petitioners towards duty on imported machine. If on that count, they are entitled to charge any interest in accordance with law, they are permitted to claim the same from the petitioners and recover it. The order of confiscation and penalty is also set aside. Writ Petition is accordingly allowed. The undertaking and security / surety or bank guarantee furnished by the petitioners are discharged. The Registr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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