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2015 (5) TMI 733 - CALCUTTA HIGH COURT

2015 (5) TMI 733 - CALCUTTA HIGH COURT - 2015 (322) E.L.T. 337 (Cal.) - Validity of order of confiscation - procedure to be followed - seizure was initially made by Railway Protection Force and subsequently handed over to the Customs - Whether the order under challenge is bad because the order of confiscation was passed without considering the provisions of Section 125 of the Customs Act - Held that:- The object of the legislature appears to be that option shall be given under Section 125 in all .....

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Md. Ismail, reported in [1991 (4) TMI 437 - SUPREME COURT] relied upon - Decided in favour of assessee. - GA 2685 of 2009, CUSTA 11 of 2009 - Dated:- 4-5-2015 - GIRISH CHANDRA GUPTA AND ARINDAM SINHA, JJ. For the Appellant : Mr. Arijit Chakrabarti with Mr. N. K. Chowdhury, Advocates For the Respondent: Mr. S. B. Saraf with Mr. K. K. Maiti, Advocates The Court : The subject matter of challenge in the appeal is a judgment and order dated 13th April, 2009 passed by the Customs, Excise and Services .....

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d in 1993(13) E.L.T. 1365. On an earlier occasion when the appeal was taken up for hearing, Mr. Chakrabarti, learned advocate appearing for the appellant, submitted that an additional question of law should be formulated for ends of justice, which is as follows: Whether the order under challenge is bad because the order of confiscation was passed without considering the provisions of Section 125 of the Customs Act. Considering that the additional question was raised by the learned advocate for t .....

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ouse within the last words of the second paragraph of Section 180 are goods which have been seized under the Act within the opening words to Section 178A. In the first place, it would be seen that these three sections which have to be read together, draw a distinction between seizure under the Act and a seizure under provisions of their laws. A seizure under the Act is one for which the authority to seize is conferred by the Act and in the context it could be referred to as a seizure under Secti .....

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er the Act and for this purpose relied on the meaning of the word seize given in Ballantyne s Law Dictionary where it is equated to taking a thing into possession . This, however, might be the meaning in particular contexts when used in the sense of the cognate Latin expression seized while in the context in which it is used in the Act in Section 178A it means take possession of contrary to the wishes of the owner of property . No doubt, in cases where a delivery is effected by an owner of the g .....

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part of sub-section (1) of Section 178A, lays the burden of proving that the goods are not smuggled on the person from whose possession the goods are taken. Assuredly when the goods are delivered to the Customs authorities by the Magistrate they are not taken from the possession of the persons accused in criminal case so as to throw the burden of proof on them and it would lead to an absurdity to hold that the section contemplated proof to the contrary by the Magistrate under whose orders the d .....

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ds continued to be, at that stage, in the possession of the accused does not embody a correct appreciation of the law as regards possession. A seizure under the authority of law does involve a deprivation of possession and not merely of custody and so when the police officer seized the goods, the accused lost possession which vested in the police. When that possession is transferred, by virtue of the provisions contained in Section 180 to the Customs authorities, there is no fresh seizure under .....

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as not on the appellant. He submitted that Section 178A of the Sea Customs Act, 1878 corresponds to Section 123 of the Customs Act, 1962 as has been indicated in the aforesaid judgment itself. Section 123 of the Customs Act provides as follows: 123. Burden of proof in certain cases.- [(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be - (a) in a case whe .....

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ent may by notification in the Official Gazette, specify. Section 178A of the Sea Customs Act, 1878 provided as follows: 178A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized. Mr. Chakrabarti contended that the goods were not seized under Section 123 of the Customs Act. On the contrary the good .....

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oms . Mr. Saraf added that the appellant suppressed the fact that a Seizure List under Section 110 of the Customs Act was prepared by the Inspector, Kaliachak, Customs, Preventive Unit in the presence of witnesses at the time of seizure of the goods. The appellant has also signed the seizure list. Mr. Chakrabarti submitted that the seizure list also contains the signatures of Sri Dilip Kumar Hazra, Officer-in-Charge, Farakka Police Station, Sri Hiren Kumar Sarkar, Officer-in- Charge, Farakka GPR .....

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ursuant to leave granted by the Chief Judicial Magistrate, Malda. The interrogation was made by the Inspector of Kaliachak Customs, Preventive Unit. Based on the evidence, the Commissioner of Customs [Appeals] was of the opinion that the goods were seized by the customs department from the custody of the appellant and not from the custody of the police. The aforesaid finding has been upheld by the learned Tribunal indirectly by observing that the judgment in the case of Gian Chand [supra] does n .....

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anji Bhai, is inconsistent with the statements made by the appellant on 10th September, 1994 and 22nd September, 1994. We do not dilate on the issue considering that the prosecution launched against the appellant is still pending. The correctness of the concurrent finding as regards the goods having been seized by the customs officer is not in challenge in the appeal. Mr. Saraf is correct in his submission that the appellant resorted to suggestio falsi and suppresio veri in formulating the quest .....

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accordingly answered in favour of the respondent/revenue. The second question, indicated above, depends upon construction of Section 125 of the Customs Act, 1962 which provides as follows: 125. Option to pay fine in lieu of confiscation. - (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the .....

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ine in lieu of confiscation of goods is imposed under sub-section (1) the owner of such goods or the person referred to in sub-section (1) shall, in addition, be liable to any duty and charges payable in respect of such goods.] Mr. Saraf, learned advocate appearing for the respondent, submitted that this question was neither raised before the Commissioner nor before the learned Tribunal. He added that gold at the relevant point of time was within the list of prohibited/restricted goods. Therefor .....

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ppears to be that option shall be given under Section 125 in all those cases where the goods are not within the prohibited list. With respect to the prohibited goods, the officer has a discretion. It is well settled that discretion has to be exercised according to rules of reason and justice. The Apex Court in the case of U.P.S.R.T.C vs. Md. Ismail, reported in 1991(3) SCC 239, opined in this regard as follows: The discretion allowed by the statute to the holder of an office, as Lord Halsbury ob .....

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