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TMI BlogDISTINCTION AND SCOPE OF SECTIONS 110(2) AND 124 OF CUSTOMS ACT, 1962X X X X Extracts X X X X X X X X Extracts X X X X ..... DISTINCTION AND SCOPE OF SECTIONS 110(2) AND 124 OF CUSTOMS ACT, 1962 - By: - Mr. M. GOVINDARAJAN - Customs - Import - Export - SEZ - Dated:- 6-8-2014 - - Section 110 (1) of the Customs Act, 1962 ( Act for short) provides that if the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods. 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. Section 110 (2) provides that where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. The aforesaid period of six months may, on sufficient cause being shown, be extended by the Commissioner of Customs for a period not exceeding six months. Section 124 of the Act provides that no order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person is given a notice in writing with the prior approval of the officer of Customs not below the rank of an Assistant Commissioner of Customs, informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; is given an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and is given a reasonable opportunity of being heard in the matter. In this article the distinction and scope of the two sections 110(2) and 124 are discussed with reference to decided case laws. In Assistant Collector of Customs V. Charan Das Malhotra 1971 (2) TMI 41 - SUPREME COURT OF INDIA the Supreme Court observed that the Collector was not expected to propose the extension mechanically or as a matter of routine but only on being satisfied that the facts exist which indicate that the investigation could not be completed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bona fide reasons within the time provided in Section 110(2) and that, therefore, extension of the period has become necessary. The Court also emphasized that the Collector cannot extend the time unless he is satisfied on facts placed before him that there is sufficient cause necessitating extension, in which case the burden of proof would clearly lie on the Customs authorities applying for extension to show that such extension was necessary. It was also pointed out that on the expiry of the period of six months, from the date of seizure, the owner of the goods would be entitled as of right to restoration of the seized goods and that right could not be defeated without notice to him that an extension was proposed. In Lokenath Tola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ram V. B.N. Rangwani 1973 (11) TMI 42 - SUPREME COURT OF INDIA it was held that the owner of the seized goods is entitled to notice, because the seized goods on the expiry of period of six months are required to be returned to him, and if that period was to be extended for another period of six months he had the right to be heard. The High Court in the decision under appeal has thus rightly observed that it was not disputed before it that the ex parte order extending the time by another six months as postulated in Sections 110(2) and 124 of the Act, was vitiated. Then comes the question as to what is the fallout of the order extending time under Section 110(2) being vitiated. The appellant contended that in face of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vitiation proceedings under Section 124 get lapsed for they could not be initiated without the aid of Section 110 . The Supreme Court did not accept this contention since it is against the ratio of Charan Das Malhotra s (supra) case. The Supreme Court further observed that Section 124 provides that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing information him of the grounds on which it is proposed to confiscate the goods or to impose penalty. The section does not lay down any period within which the notice required by it has to be given. The period laid down in Section 110(2) affects only the seizure of the goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the validity of the notice. The Constitution Bench in I.J. Rao, Asst. Collector of Customs V. Bhibuthi Bhushan Bagh 1989 (5) TMI 60 - SUPREME COURT OF INDIA while interpreting Section 110(2) proviso of the Act has held that when wanting to extend period beyond six months in respect of seizure of goods, the Collector must service notice on and afford hearing to the owner of goods before deciding grant of extension, as his right to restoration of his goods after six months is defeated by the order of extension. It was also viewed that where rights of a person are adversely and prejudicially affected by an order by an authority in a proceeding, such person is entitled to a pre decisional notice irrespective of whether the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeding is judicial, quasi judicial or administrative in nature. In Harbans Lal V. Collector 1993 (7) TMI 76 - SUPREME COURT OF INDIA the Supreme Court observed that Section 110 covers the subject of search, seizure and arrest. The section operates during the stage of investigation. Section 124 covers the topic confiscation of goods and imposition of penalties. The subject of investigation and that of confiscations and imposition of penalties are ex facie exclusive of each other, the goal of each being different. In clear terms, it has been held that the period angle causing affectation under Section 110(2) would only pertain to the seizure of goods. The validity of notice under Section 124 for which no period has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been laid within which it is required to be given is not affected. The seizure may have, after the expiry of six months or after the expiry of the extended period of six months entitled the owner or the person concerned to the possession of the seized goods. On launching proceedings under Section 124 enjoins issuance of a notice for which no period has been fixed within which notice may be given. The difference is obvious because this goes as a step towards trial. Section 110 and 124 are independent, distinct and exclusive of each other, resulting in the survival of the proceedings under Section 124 , even though the seized goods might have to be returned, or stand returned in terms of Section 110 of the Act , after the expiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the permissible period of seizure. Thus it is well settled that if the notice as required under Section 110(2) of the Act is not served, the goods are liable to be returned, though the same may not affect the proceedings for confiscation of the goods under Section 124 of the Act . - Reply By jayaprakash gopinathan as = Sir Will you be kind enough to explain how the goods can be confiscated when it is returned? g.Jayaprakash Dated: 6-8-2014 Reply By jayaprakash gopinathan as = The paper writer's silence on my query is disturbing. It seems data entry is not what is expected in the papers to be published in esteemed sites. Ignorance of the law is expounded when it is written that Notice is issued under section 110 (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and goods are confiscated under section 124 of the Act. The relevant sections are 110 (2):Where any goods are seized under sub-section (1) and no notice in respect there of is given under Cl. (a) of section 124 with in six months of seizure of the goods, the goods shall be returned to the person from whose possession they were seized; Provided that the afore said period of six months may, on sufficient cause being shown, be extended by the Collector of Customs for a period not exceeding six months . Section 124 :No order confiscating any goods or imposing any penalty on any person shall be made under this chapter unless the owner of such goods or such person :- is given a notice....... is given an opportunity of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king a representation... ....................................... Goods are confiscated under Section(s) 111 or under 112 (import/export violations) and not under Section 124 as written by the paper writer. FURTHER WHEN GOODS ARE RELEASED TO THE PARTY AND IF NOT RE SEIZED HOW IT CAN BE CONFISCATED. BASICS ARE VERY IMPORTANT Dated: 23-8-2014 Reply By MARIAPPAN GOVINDARAJAN as = Dear Sir, Thanks for your comments which help me to study in depth further in this aspect. Goods cannot be confiscated under Section 111 and 112 . Section 111 describes what are the goods, that are improperly imported, liable for confiscation. Section 112 prescribes the penalties for importation of goods liable for confiscation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 110 (1) gives powers to the proper officer to seize the goods which are liable for confiscation. Section 110 (2) provides that where any goods are seized and no notice in respect thereof is given under Section 124 (a) within six months of the seizure of the same shall be returned to the person from whose possession they were seized. Section 124 prescribes the procedure for issue of show cause notice before confiscation. Without issue of show cause notice no goods shall be confiscated. The Supreme Court in Harbans Lal V. Collector held that the seizure may have, after the expiry of six months or after the expiry of the extended period of six months entitled the owner or the person concerned to the possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the seized goods. On launching proceedings under Section 124 enjoins issuance of a notice for which no period has been fixed within which notice may be given. The difference is obvious because this goes as a step towards trial. The Supreme Court emphasized that Section 110 and 124 are independent, distinct and exclusive of each other, resulting in the survival of the proceedings under Section 124 , even though the seized goods might have to be returned, or stand returned in terms of Section 110 of the Act , after the expiry of the permissible period of seizure. As per the Supreme Court judgment in the above said case, if the notice as required under Section 110(2) of the Act is not served, the goods are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be returned, though the same may not affect the proceedings for confiscation of the goods under Section 124 of the Act . Thank you, Sir, Dr. M.Govindarajan Dated: 25-8-2014 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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