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2016 (4) TMI 923 - MEGHALAYA HIGH COURT

2016 (4) TMI 923 - MEGHALAYA HIGH COURT - TMI - Seeking release of confiscated goods - Seizure of 26 gold biscuits - Section 110(1) of the Customs act, 1962 - Illegally imported into India - Held that:- the seizure of the gold in this case was not an exception, but on earlier occasions also, such seizure of smuggled gold while being transported by air or train had been carried out. Moreover, the gold items in the instant case were being carried stealthily by the accused persons. Thus, according .....

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se mainly on the basis of case laws

Alternative remedy - Held that:- there is no violation of the principle of natural justice or a fundamental right or there is impugnment of vires of the Act by way of any challenge. Moreover, we also do not find that the proceedings of the case are pending at a stage which could foreclose the right to avail the alternative remedy of filing appeal. In the case like the one in hand, the petitioner cannot be allowed to take recourse to prerogative writ .....

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support of the arguments on the requirement of reason to believe' as contained in Section 110 of the Customs Act, 1962 but it is also not a case where the appeal or any further proceedings under the statute were not or would not be dealt with on merit and may end as a mere idle formality because the administrative authorities under the Customs Act are also a quasi judicial authority and as such, they are under a legal obligation to decide the matter carefully and pass speaking and reasoned order .....

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rities being in the nature of quasi-judicial cannot be quashed lightly. The exercise of prerogative writ jurisdiction is pre-eminently one of discretion and no inflexible rule can be laid. Where the provisions of Customs Act have not been complied with or if the fundamental principles of judicial procedure have been given a goodbye, the High Court can certainly grant relief in exercise of prerogative writ. However, the right of appeal as provided in the Customs Act should not be by passed merely .....

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he inventory of goods (Seizure Memo) dated 27.08.2014 prepared by the Customs Inspector (Preventive) Unit, Shillong under Section 110 of the Customs Act, 1962 and the proceedings initiated by Customs Authorities under provisions of the Customs Act pursuant thereto; (ii) to direct the release of 26 pieces of gold biscuits rectangular in shape and size along with other seized articles as per Seizure Memo; and (iii) to pass any other order/orders as deemed fit and proper in the facts and circumstan .....

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nch Office is at Paona Bazar, Governor Road, Imphal. The business of the petitioner, inter alia, includes sale of gold, jewellery and gold coins. The petitioner purchases gold from the bonafide sources with valid documents. Besides, the petitioner is also engaged in side business of granites, tiles and marbles. 3. The Commissioner of Customs (Preventive), NE Region, Shillong (respondent No. 1) has the jurisdiction over the entire North Eastern Region under the Customs Act, 1962 and the rules mad .....

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ure of contravening goods made by a subordinate Officer like Inspector under the provisions of the Customs Act, 1962 is reported to higher Officers, namely, the Commissioner of Customs (Respondent No. 1) and Superintendent of Customs (Respondents No. 2). 4. The petitioner states that during the course of his business of sale and purchase of gold, between 1st April, 2013 to 17th April, 2014, he purchased 17.340 kg of gold bars amounting to ₹ 13,05,33,419.00 from one authorized dealer namely .....

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d value are as hereunder:- Sl No. Invoice Number &Date Quantity of Goldpurchased Value in Rupees 1. 10885/13-14 dated22.04.2013 2000.000 grams 52,80,000.00 2. 12659/13-14 dated24.04.2013 371.750 grams 10,00,000.00 3. 17602/13-14 dated29.04.2013 6357.740 grams 1,74,52,000.00 4. 21693/13-14 dated03.05.2013 1737.520 grams 47,00,000.00 5. 22281/13-14 dated06.05.2013 5000.000 grams 1,38,50,000.00 6. 30710/13-14 dated16.05.2013 1197.830 grams 32,58,100.00 7. 32910/13-14 dated20.05.2013 277.130 gra .....

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44821/13-14 dated03.07.2013 76.190 grams 2,00,000.00 17. 46827/13-14 dated10.07.2013 701.320 grams 18,55,000.00 18. 46987/13-14 dated11.07.2013 37.740 grams 1,00,000.00 19. 47747/13-14 dated20.07.2013 671.640 grams 18,00,000.00 20. 51189/13-14 dated13.12.2013 101.530 grams 2,99,000.00 21. 522191/13-14dated 17.01.2014 115.940 grams 3,38,547.00 22. 02080/14-15 dated28.07.2014 1960.780 grams 55,00,000.00 23. 02084/14-15 dated28.07.2014 2495.540 grams 70,00,000.00 24. 02083/14-15 dated28.07.2014 17 .....

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ons dispatched 26 (twenty six) pieces of gold bar, with gross weight 4350 grams and average purity between 99.5 to 99.9 through Smti T Santibala Devi and Smti RK Rojita Devi. The said Smti T Santibala Devi and Smti RK Rjita Devi are the wives of the cousin brothers of the petitioner namely Shri RK Semsong Singh and RK Ranjit Singh respectively, who, also accompanied their wives Smti T Santibala Devi and Smti RK Rojita Devi. They decided to travel by bus from Imphal to Dimapur on 25.08.2014 and t .....

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he Kolkata Airport. The transit challan dated 25.08.2014 issued by the petitioner for and on behalf of Radhika Jewellery along with related invoices issued by Magna Project Pvt. Ltd. in respect of the alleged contravening gold items, namely, 26 (twenty six) pieces of gold biscuits were handed over to Smti T Santibala Devi and Smti RK Rojita Devi. The details of invoices issued by the Magna Project Pvt. Ltd. to cover 26(twenty six) pieces of gold biscuits are as follows: (i) 02080/14-15 dated28.0 .....

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carrying the gold bars/biscuits and they also produced 26(twenty six) pieces of gold biscuits along with the transit challan dated 25.08.2014 and the related invoices in support thereof to justify that the gold biscuits are legally carried. The Railway Protection Force prepared a seizure list and after interrogation of all the aforesaid four persons arrested them on 26.08.2014 at Dimapur and produced them before the Special Magistrate, Tinsukia on 27.08.2014. Thereafter, the Special Magistrate, .....

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petition dated 27.08.2014. At about 6.00 PM on 27.08.2014, all the gold biscuits, mobiles, other belongings along with relevant documents (seizure list, arrest report/memo etc) and four accused persons were handed over to the Customs Authority (respondent No.3) by Sub Inspector of Railway Protection Force in the Customs Office, Tinsukia. However, all the four accused persons were later released on bail by the Chief Judicial Magistrate, Tinsukia, District. 7. On 29.08.2014, the Commissioner of C .....

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of the Customs Act, 1962 seized 26 (twenty six) pieces of gold biscuits, yellow rectangular in shape having gross weight 4334.79 grams which were valued at ₹ 1,22,15,438 by the Sub Inspector, Railway Protection Force at CPF Office, Tinsukia believing it to be gold of foreign origin. Three numbers of duplicate bills of Magna Project Pvt. Ltd, Kolkata were also seized by the Customs Authorities but it seems that they did not find any mention about the transit challan dated 25.08.2014 issued .....

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hillong. He recorded the statement of petitioner at 1600 hours on 09.09.2014, at 1030 hours, on 11.09.2014 and also on 12.09.2014. However, the interrogation of the petitioner could not reveal any incriminating information against him. During the course of interrogation, the petitioner submitted the documents supporting the possession and ownership of 26 (twenty six) numbers of gold biscuits and explained all the circumstances whereunder the aforesaid gold biscuits were purchased and sent throug .....

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e proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods. As per the record, the detection of the seized gold biscuits was made at Dimapur Railway Station by Railway Protection Force on 26.08.2014 at about 0330-0345 hours and the same were formally seized by respondent No. 3 at Tinsukia CPF Office on 27.08.2014 on being handed over by Sub Inspector, Railway Protection Force. The impugned seizure memo/inventory of goods seized, on th .....

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for the Customs Inspector to come to the conclusion that the seized gold biscuits are believed to be gold of foreign origin and are illegally imported into India. The action of the Customs Authority itself speaks that the power under Section 110(1) of the Customs Act, 1962 has been exercised for extraneous or irrelevant considerations or reasons. According to the petitioner, it is unquestionably a colourable exercise of power or a fraud on power and the exercise of the power in such a manner has .....

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erms "reason to believe", has to be understood with reference to the Customs Act, and has thus a well known connotation which is the only safeguard available to a person as against otherwise unguided and indiscriminate power of seizure conferred on the Customs Authority. The safeguard has to be strictly followed. In the instant case, it is not understood how respondent No. 3 at the time of making seizure could identify the 26 pieces of gold biscuits, which are rectangular in shape and .....

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to believe" to assume jurisdiction in the matter and then to establish that the gold biscuits were of foreign origin. According to the pleadings of the case, on the facts, it is clear that the Customs Department has been unable to establish any such ground to proceed with. 12. The only safeguard that is available to a person against indiscriminate seizure, which is a serious intrusion into the fundamental and legal rights of individual, has been provided in the expression "reason to b .....

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d it is not a thing that is acquired after the seizure i.e. when the explanation of the person is not found to be correct. Such views have been taken by the Courts in (i) Angou Golmei vs. Smti Vizovolie Chakhsang and another reported in 1994(1)PLJR 800; (ii) Bawa Gopal Das Bedi & Sons and others vs. Union of India and others, reported in AIR 1982, Patna 152; (iii) Yogendra Prasad vs. The Union of India, 2004(4)PLJR 675 and (iv) RG Holdings Pvt. Ltd. Vs. State of Bihar, reported in 2008(2)PLJ .....

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5 SC 1622, wherein their Lordships in para 26 of the judgment have observed as under: "Where power is conferred to achieve a purpose, the power must be exercised reasonably and in good faith to effectuate the purpose and in this context, "in good faith" means for legitimate reasons. Where power is exercised for extraneous or irrelevant consideration or reasons, it is unquestionably a colourable exercise of power or fraud on the power and the exercise of power is vitiated". 14 .....

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e completely missing and totally lacking. Thus, the very foundation of seizure being without jurisdiction, is not sustainable in law and the goods seized are required to be released forthwith. In support of the contention, the judgment of the Apex Court, in the case of Smti Kusum Lata Singhal vs. Commissioner of Income Tax, Rajasthan, reported in (1990) 4 SCC 1998, has been placed reliance. Para 8 of the judgment on reproduction reads as: " .. Our attention was also drawn to the observation .....

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such cases cannot be pleaded as a valid defence. This view has been taken by Hon ble the Apex Court in the case of Wazil Chand & others vs. State of Himachal Pradesh & others, reported in AIR 1954 SC 415, vide para 8. 16. The petitioner also submits that the gold biscuits have not been seized by the Customs Authority either from the possession of the petitioner or from the possession of its employees but the same were handed over by the Railway Protection Force to the Customs Authority, .....

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the Hon ble Apex Court in the case of Gian Chand & others vs. State of Punjab, reported in 1983 (13) ELT 1365(SC). The Hon ble Court has held that if the goods are seized by the police and delivered to the Customs Authorities under Section 180 of the Sea Customs Act, 1978, it is not seizure by the Customs within the meaning of Section 178A of the Sea Customs Act, 1878. This is because when the police officer seized the goods under some other law, such as Code of Criminal procedure, the accu .....

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gold biscuits on 26.08.2014 at Dimapur Railway Station from the aforesaid four persons and seized the same in connection with a complaint of creating disturbance in the Railway Compartment. Later the Customs Authorities took possession of the seized goods under the provisions of Section 110(1) of the Customs Act, 1962. In other words, the Customs Authorities did not seize the goods either from the petitioner or from the said carriers; therefore, the provisions of Section 123 of the Customs Act, .....

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gold biscuit weighed 166.52 gms to 167.05 gms. These biscuits were carried from Imphal through bus and then by sleeper class of train by the carriers without any covering documents like Challan, Invoice, Bill, etc. issued by the consignor to the consignee. Three photocopies of invoices carried by the carriers were also examined. The descriptions of invoices were like (i) Invoice No. 37260/13-14 dated 01.06.2013; (ii) No. 38757/13-14 dated 11.06.2013 and (iii) No. 47709/13- 14 dated 19.07.2013 w .....

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the present consignment (all almost of same weight 166.52 gms to 167.05 gms) and the gold sold under the three Tax Invoices of M/s Magna Projects Pvt. Ltd., Kolkata, could be established, nor could the same be explained by the carriers. According to respondents, when any commercial quantity of goods/gold moves from one State to another State, proper declarations/documentation under the Sales Tax laws of the States passing through, is required to be followed, till it reaches the destination of a .....

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ment of gold. On being questioned the carriers, however, stated that the said gold belonged to Rajkumar Angangbi Singh, Imphal and he will proceed to Kolkata by Flight and receive the gold from them at Howrah, Kolkata. There was a suspicion as to why one will take the risk of sending gold worth more than ₹ 1.22 crores through carriers by bus/train and would himself travel by air to receive the gold there. If the said gold was legally acquired and possessed, the owner would have carried the .....

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ing, keeping, concealing or any other manner dealing with 26 seized gold biscuits which were without proper documents, and believed to be illegally smuggled/procured. One of the accomplices, namely, RK Templer was found to be involved in an earlier case with a different name as RK Swami Singh. The three tax invoices appeared to be just a cover-up, in case of detection by the law enforcing agencies. The identifying particulars mentioned in the three tax invoices were different from the identifica .....

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efying various law enforcing agencies. He appears to be a big time smuggler. Thus, according to the Customs authorities, there is a reasonable belief that the instant goods have been smuggled into India without payment of customs duty and in violation of Section 7(i)(c) and Section 11 of the Customs Act, 1962, and are liable for confiscation under Section 111 of the said Act, hence the same were seized under Section 110 of the Customs Act, 1962. The Customs department has referred to a judgment .....

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ble the Apex Court in State of Gujarat v. Mohanlal, reported in AIR 1987(SC)1321, has also been referred to explain the reasonable belief as required under Section 123 of the Customs Act. In order to argue that the Court will not sit in appeal on the question of reasonable belief, the Court has to accept the Officers belief regardless of fact whether the Court, of its own, might not have entertained the same belief. 19. In rejoinder affidavit sworn by the petitioner Shri RK Anganbi Singh, he has .....

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value of gold were being carried without any covering documents like Challan, invoice, Bill, etc. (c) The description of gold mentioned in the 3(three) seized invoices were different than the description of gold seized by the Custom Authority. (d) The carriers of the seized gold could not explain the aforesaid discrepancies between the description of gold mentioned in the invoices and the description of gold seized by the Custom Authority. (e) The seized gold was being carried contrary to the r .....

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Section 110(1) of the Customs Act, 1962, has taken the aforesaid grounds which, do not constitute a reasonable belief. It is not disputed by the respondents that the gold in question was in the form of rough metal biscuits without any markings, inscriptions or numbers. Regarding the consignment of gold weighing 4.335 Kgs, the petitioner asserts that he was sending the consignment of gold for processing to make Hallmark gold coins at Kolkata for sale during the Nigol Chak Kouba festival in the S .....

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ied by the purchase documents and road challans. Moreover, since the gold was seized by the RPF and not by the Customs Authorities, there was no scope or occasion to produce any document before them. It was not a case of search and seizure by the Customs Department and they had simply received the gold and documents from the RPF. The gold was accompanied by the purchase documents issued by M/s Magna Projects Pvt. Ltd, Kolkata. Thus, it was not justified for the Customs Authorities to hold a view .....

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re melted by mixing other substances so as to make the same suitable for making gold coins. That is why the gold in question did not retain its original shape, size and weight as it was at the time of purchase, and that is the precise reason for having difference in description of the gold seized and the gold purchased, and on that basis, it cannot be said to be a smuggled item and thus, liable to confiscation. The gold was seized by the RPF at Dimapur. The RPF had no expert knowledge regarding .....

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has purchased gold worth ₹ 13 crores from an authorized Bullion merchant, namely, M/s Magna Projects Pvt. Ltd, Kolkata, which is supported by valid purchase documents and moreover all such transaction of purchase were made only through petitioner s Axis Bank Account No. 91302000035118723. Besides, during the course of normal trade practice, the gold bars purchased by the petitioner were transformed by processing (Dhalai) to make them suitable for making gold. Thus, the arguments of Custom .....

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nction as Customs Officer, not being entrusted with any powers under the Customs Act. Moreover, the seizure of gold made by the RPF and the statement alleged to have been recorded were not as per procedure and that apart, they had also taken signatures of the Carriers on blank papers. As regards the question as to why the Carriers of the gold were not carrying Form 61 under the Assam VAT Rules 2005, the petitioner states that the gold was being carried from Manipur and was seized at Dimapur (Nag .....

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lieve that the gold was smuggled and that the said RK Templer Singh was accomplice in this case, rather an accomplice is one who actively participates in the commission of the crime. The petitioner has asserted that, in the instant case, the gold was being transported in a bonafide manner from one place to another alongwith supporting documents by two other persons. Thus, there was no question of Shri R.K Templer Singh being an active participant in the commission of any offence. The case referr .....

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mulate a reasonable belief under Section 110(1) of the Customs Act, 1962. Subsequent developments and statements cannot be considered as the justification to say that the respondent had reasons to believe that the gold was smuggled. Moreover, according to the petitioner, there were sufficient reasons for not transporting the gold in question by himself. It is widely known that the entire North Eastern Region especially the State of Manipur is fraught with criminal activities in the guise of insu .....

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suitcase in a crowded public place or train. The owner is supposed to adopt safety measures to avoid threat or loss in any other manner. The persons from whom the gold was seized by RPF were travelling in an area known as disturbed area having frequent law and order problems. It was, therefore, obvious to carry the gold by concealing the same in their persons for safety. It is a common practice in every part of the world to carry valuables or even a small amount of money with utmost care and se .....

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formation and nothing was seized or recovered in pursuance thereof. Simple intelligence report that there was spur of smuggling of gold in a particular area could not have justified the Customs Department to form a suo motu belief that the gold that was transported under genuine documents was a contraband. It can at the most give rise to a reasonable suspicion but based on that, no inference can be drawn that the gold in question was smuggled for the purpose of exercise of powers of seizure unde .....

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f spur in smuggling activities cannot be a prima facie material to hold that the gold was smuggled. Moreover, the report of smuggling cannot be used as a tool by the Customs officers to interfere with the genuine business transaction supported by purchase documents and challan. It is widely known that there is huge quantity of illicit import of gold into India. Based on intelligence report that there was spur in gold smuggling, the Customs authorities had no right or statutory power to obstruct .....

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er by the Police. The accused and the goods seized were taken to the Police Station and a Panchnama was prepared. Thereafter, the goods were handed over by the Police to the Customs Authority. It is evident that the seizure of the goods was not made by the Customs Authority. The expression, "seize" was defined by the Supreme Court in Gian Chand and State of Punjab, in the context in which it is used in the Act. That word was stated to mean the taking of possession, contrary to the wish .....

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Besides, the seizure must be with the reasonable belief that they are smuggled goods. There is nothing on record to show that the goods were seized by the Police in the reasonable belief that they were smuggled goods." 22. Thus, according to the petitioner, the ratio decidendi of the judgment can also apply in the instant case for the reason that the gold was seized by the RPF personnel under the CrPC (having no power under the Customs Act, 1962) at Dimapur (Nagaland) and handed over to th .....

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ppears that the Customs Officer took possession of gold from the custody of RPF by exercising power of seizure under Section 110(1) of the Customs Act, 1962 without having any reasons to believe that the items that were seized were gold and the same were smuggled and thus liable to confiscation under the Customs Act, 1962. The Customs Inspector, Shillong, while making seizure inventory, recorded "yellow rectangular metal biscuits believed to be gold of foreign origin" and he also recor .....

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g time smuggler, an accusation which according to him is not at all supported by material facts. Rather the Customs Department has exceeded its jurisdiction in making personal allegations against the petitioner who claims to be a law abiding and respectable citizen of the country. He being a genuine businessman also pays a substantial amount of income tax. The facts and circumstances to make a reasonable belief should exist prior to the seizure, which according to the petitioner, were non-existe .....

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Supreme Court has made observation in relation to requirements of guilty knowledge or mens rea under clauses (a) and (b) of sub section 1 of Section 135 of the Customs Act, 1962. Another case sought to be relied upon by the Customs Department, namely, State of Gujarat v. Mohanlal Jeetmalji Porwal is the one where in the burden of proof under Section 123 of the Customs Act, 1962 has been discussed. In the instant case, the petitioner has rather challenged the very basis of this seizure by referri .....

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ty of gold, at the time of return of the articles, it was found that the gold was converted into golden colour articles. On being asked about the custody, it was also told that the custody was given to the Superintendent of Customs. 9. Therefore, we direct the Chairman, Board of Customs and Central Excise that the Department of Custom shall open Bank Account and Locker in the name of department for keeping costly articles, which shall be operated by an Officer not below the rank of Commissioner, .....

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of the case based on records. 2. That on 26.8.2014 at about 0330-0345 hrs, the officials of Railway Protection Force (RPF) Dimapur intercepted four persons namely, Shri RK Templer Singh, Male, aged 45 years, S/o (L) Ketuki Singh, Village-Sagolband, Bijoy Govinda Leikai, P.O/P.S Imphal West, Dist: Imphal West, Manipur. Shri RK Semson Singh, aged 22 years, S/o RK Boysama Singh, Village-Sagolband, Bijoy Govinda Leikai, PO/PS Imphal West Dist: Imphal West, Manipur. Smti T Santibala Devi, aged 26 yea .....

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Coach No. S8. The RPF personnel found that the above mentioned four persons were creating nuisance, causing disturbance to other passengers and when the RPF officials acted, these four passengers resisted and tried to flee, however, the officials overpowered and apprehended them and took them to RPF post, Dimapur at about 1530 hrs. 3. That on search of the belongings and persons, amongst others, 13 pcs of rectangular yellow metal biscuits believed to be gold was recovered from Smti T Santibala .....

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by one RK Anganbi Singh of Village-Sagolband, Bijoy Govinda Leikai, PO/PS Imphal West, Dist: Imphal West, Manipur and were meant to be delivered to the said person at Howrah, West Bengal. Shri RK Anganbi Singh was supposed to go to Kolkata by flight. It was also stated that they came from Imphal to Dimapur by road and were supposed to board Kamrup Express from Dimapur as they were having reservation vide PNR No. A 6133126565 dated 26.8.2014. The RPF personnel also recovered 3 mobile phones cash .....

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by the RPF officials on 26.8.2014 at Dimapur and were produced before the Honble Special Railway Magistrate, Tinsukia, was requested by Customs Superintendent, CPF, Tinsukia to hand over the case to the Customs Formation as they have violated various sections and rules under Customs Act, 1962. The Honble Railway Magistrate forwarded the same to the Honble Chief Judicial Magistrate, Tinsukia, Assam and the prayer of the Superintendent Customs, CPF Tinsukia was allowed. 5. That in Customs CPF (Cus .....

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nts and were smuggled from Myanmar, seized the said 26 gold biscuits. Then, a registered goldsmith was called in the Customs CPF Office, Tinsukia by the officers and the weighment of the seized gold biscuits were taken with the help of digital weighing scale and are serially numbered as 1 to 26. The weights of the Gold bars are (1) 166.82 gm, (2) 166.62 gm, (3) 167.02 gm, (4) 167.00 gm, (5) 166.55 gm, (6) 166.74 gm, (7) 166.58 gm, (8) 166.65 gm, (9) 166.77 gm, (10) 166.82 gm, (11) 166.69 gm, (12 .....

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ers then prepared the inventory incorporating all the details in the presence of independent witnesses and a Claimed Case was booked vide Case No. 06/CL/IMP/CUS/HQRS. PREV/SH/14-15 dated 27.8.2014 totally valued at ₹ 1,22,15,438/- (Rupees One Crore Twenty Two Lakh Fifteen Thousand Four Hundred Thirty Eight) only under the relevant provisions of Customs Act, 1962. Thereafter, the 26 gold biscuits were packed and sealed in the presence of two independent witnesses, 4 accused persons, seizing .....

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/9804(B) dated 01.09.2014 and the report of the same is still awaited. 8. That your deponent humbly submits that the 26 gold biscuits were packed and sealed in the presence of two independent witnesses, 4 accused persons, seizing officer and a gazette officer in a cloth pouch with departmental seal bearing inscription CCP/NER/SHILLONG/No.17, and now the seized gold are under safe custody of this Commisionnerate in the "Strong Room" of Customs House at Shillong, which has been duly reco .....

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m storing valuables such as Gold, Silver, Dimamonds,Gems & Jewellery and precious/semi-precious stones, should invariably have a double lock system, b) Two keys for operating the Strong Room should be entrusted to two separate officers; one of the in-charge of the Strong Room or godown and the other to a superior/supervisory officer of gazette rank; In the instant case, the seized goods has been kept in the strong room having double lock system and one of the key is with the Assistant Commis .....

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proper custody of the Commissioner on behalf of President of India. (Copy of disposal manual is annexed as Annexure A). 9. That the said seized gold along with other seized gold present in the "Strong Room" have been authenticated by Smti RM Kharsyntiew, Lt. Judicial Magistrate Firct Class, Shillong, on 2.12.2014. In view of the disposal of gold arisen out of Crl. Misc. Appln. 24(H) 2014 in connection with disposal of seized gold other than the instant case has been ordered for disposa .....

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h were seized along with the 26 nos. of gold biscuits), followup investigation has been taken up with the Additional Director General, Directorate of Revenue Intelligence, Kolkata to verify the genuineness and authenticity of the same vide letter C . No . 06 / CL / IMP / CUS / HQRS.PREV/SH/14- 15/9800(B) dated 01.09.2014. They have been also asked to provide specifications of gold if at all sold to Shri RK Angangbi Singh. The investigation report is still awaited. The case is still under investi .....

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11.06.13 and 47709/13-14 dt.19.07.13, purportedly issued by M/s Magna Projects Pvt. Ltds., 163, Rabindra Sarani, Kolkata recovered from the carriers along with gold. The discrepancies noticed is shown below: Sl.No Invoice No. Description of gold Quantity (in gm) Quantity (in gm) recovered gold biscuits as per the inventory Fineness per mille as certified by India Govt. Mint Kolkata 1 37260/ 13-14dt. 01.06.1 3 Goldbar fineness 99.5 950 All the recovered 26 gold biscuits weighed in between 166.5 g .....

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5.5 No. 15 - 995.3 No. 16 - 996.1 No. 17 - 996.2 No. 18 - 996.1 No. 19 - 995.7 No. 20 - 995.3 No. 21 - 995.2 No. 22 - 995.5 No. 23 - 996.1 No. 24 - 995.8 No. 25 - 995.1 No. 26 - 996.5 055605 172.35 055606 1000.00 Goldbar fineness 99.5 1000.00 L-06976 1000.00 Goldbar fineness 99.5 801.63 SO-B45576 801.63 Total 7123.98 4334.79 It is clearly evident from the above that gold biscuits physically recovered from the carriers do not match with the description written in the recovered invoices. 2. Furthe .....

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sued by M/s Magna Projects Pvt. Ltd., Kolkata as covering documents for transporting the gold biscuits while he also claimed that said biscuits were reprocessed by him though no Invoice/Challan of his own business establishment was issued. 4. That no intimation is required to be made to Customs for change of shape/character of gold bars or gold items. 5. In terms of section 123(2) of the Customs Act, 1962, Gold is declared as notified item and the burden of proving that the said gold are not smu .....

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d. 7. That as case is still under investigation and the Writ Petition with its prayer inter alia for release of the goods is premature." 25. There is a further affidavit filed by Assistant Commissioner dated 25th February, 2015 reiterating the points highlighted in affidavit in opposition with certain further details on behalf of the respondents. Thereafter, yet another detailed affidavit has been filed by the Assistant Commissioner of Customs in furtherance of earlier affidavits. The Assis .....

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itioner has stated that during the period commencing from 1st April 2013 to 17th April 2014 he purchased a huge quantity of gold bars as entered into sales invoices with dates and numbers. He has also submitted that the "Ningol Chak Kouba festival" is a very important festival in the State of Manipur and the people over there spend huge amount in purchasing gold according to their financial status. That festival was being celebrated on 28th October, 2014. Thus, the petitioner being the .....

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y Shri RK Semsong Singh and RK Ranjit Singh respectively, who, also accompanied the two ladies. They decided to travel by bus from Imphal to Dimapur on 25.08.2014 and then by 15960 DN Kamrup Express Train from Dimapur to Howrah on 26.08.2014. The reservation and the payments were also made from the account of the petitioner. As a security measure, the gold biscuits/bars were instructed to be carried while being concealed in their clothes and not in a bag etc. The petitioner travelled by air and .....

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and the related invoices in support thereof to justify that the gold biscuits are legally carried. The Railway Protection Force prepared a seizure list and after interrogation, arrested all the aforesaid four persons on 26.08.2014 at Dimapur. Thereafter, they were produced before the Special Magistrate, Tinsukia on 27.08.2014. On request by the Customs Superintendent, CPF Tinsukia to hand over the case to the department as the accused persons seemed to have violated various provisions of the Cus .....

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ner of Customs, Shillong issued search warrant No. 04/14-15 and searched the residential premises of the petitioner. According to the petitioner, the Railway Protection Force handed over the seized gold items at 6PM on 27.08.2014 to the Customs authority which the authority received in purported exercise of the power under Section 110 of the Customs Act, 1962. The description of the gold items were recorded as yellow rectangular in shape having gross weight 4334.79 grams and valued at ₹ 1, .....

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hority at Imphal on the said date 09.09.2014 where respondent No. 3 Customs Inspector had also gone from Shillong. He recorded the statement of the petitioner at 1600 hours on 09.09.2014, at 1030 hours, on 11.09.2014 and also on 12.09.2014. However, according to the petitioner, the interrogation could not reveal any incriminating information. The petitioner has also claimed to have produced the documents required in support of the possession and ownership of 26 gold biscuits, and explained the c .....

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ny number. Each gold biscuit weighed 166.52 gms to 1637.05 gms. The gold biscuits were carried from Imphal through buses and thereafter in sleeper class of the train by the carriers without any valid covering documents like challan, invoices, bills, etc., issued by the consignor to the consignee. The three photo copies of invoices carried along with the gold biscuits were like (i) Invoice No. 37260/13-14 dated 01.06.2013; (ii) No. 38757/13-14 dated 11.06.2013 and (iii) No. 47709/13-14 dated 19.0 .....

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no nexus between the present consignment and the gold sold under three Tax Invoices of M/s Magna Projects Pvt. Ltd., Kolkata, could be established, nor could the same be explained by the carriers. Moreover, when any commercial quantity of goods/gold moves from one state to another, a proper declaration/documentation under the Sales Tax laws of the states through which such goods are to pass is required to be carried, up to the place of destination. One person alleged to be with carriers was RK .....

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on and could be the smuggled goods. Though the carriers disclosed that the gold items belong to Mr. RK Angangbi Singh, Imphal, but they also informed that he was to proceed to Kolkata by flight and receive the gold at Howrah, Kolkata. It also created a strong suspicion: for, why one will take the risk of sending gold biscuits worth more than ₹ 1.22 crores through carriers by bus/train while he himself would travel by air to receive the gold only at the destination point. If the gold biscui .....

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orted by air or train had been carried out. Moreover, the gold items in the instant case were being carried stealthily by the accused persons. Thus, according to Customs authorities, there was a reasonable belief that the instant goods have been smuggled into India without payment of customs duty in violation of Section 7(1)(c) and Section 11 of the Customs Act, 1962 and were liable for confiscation under Section 111 of the Act after seizure under Section 110 of the customs Act, 1962. The reason .....

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faith, but for extraneous consideration; a reason to believe must exist prior to the exercise of seizure, and the reason to suspect can not form a reason to believe. Gold biscuits were covered by the Tax Invoices while being carried by the carriers and there was no valid ground to seize such items. Thus according to the petitioner, there is violation of the fundamental right under Article 19 (i)(g) of the Constitution of India. 28. This Court can certainly exercise the powers under Article 226 o .....

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her point that needs to be noticed is that the petitioner instead of invoking the powers of this Court under Article 226 of the Constitution of India should have exhausted alternative remedy in the nature of being a substantive and unfettered right to file statutory appeal. Hon ble the Apex Court in the case of Gulabdas & Co. V. Assistant Collector of Customs and Another reported in AIR 1957 SC 733 has held that; ".......................Unless the provisions relating to the imposition o .....

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on facts, there is really no question of the infraction of a fundamental right. If a particular decision is erroneous on facts or merits, the proper remedy is by way of an appeal." 30. This is not a case where despite existence of an efficacious alternative remedy in the nature of substantive right this Court has to exercise its discretionary jurisdiction. There is no violation of the principle of natural justice or a fundamental right or there is impugnment of vires of the Act by way of an .....

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ation, payment of Court fee, or deposit of some amount for entertaining the appeal. It is also not a case where there is arbitrary exercise of powers by statutory authority in clear violation of the provisions of statute. Though the petitioner has tried to offer some explanations in support of the arguments on the requirement of reason to believe' as contained in Section 110 of the Customs Act, 1962 but it is also not a case where the appeal or any further proceedings under the statute were .....

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he Apex Court in the case of A.V. Venkaeswaran, Collector of Customs v. Ramchand Sobhraj Wadhwani and Ors. Reported in AIR 1961 SC 1560: 1962 SCR(1) 753 while dealing with a case where the Central Board of Revenue had issued a ruling to the effect that fountain-pens with nibs or caps being gold-plated fell within item 61(8), has held that, the basis of the rule by which Courts insist upon a person exhausting his remedies before making application for the issue of a prerogative writ is that the C .....

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do the act and the subject opposing it, the final determination of the authority will yet be a quasi-judicial act provided the authority is required by the statute to act judicially." Now the Sea Customs Act empowers the Customs authorities to impose a certain duty on goods imported and this no doubt prejudicially affects the importer. The Act, further clearly requires the authorities to proceed judicially in imposing that duty when a dispute arises, that is, after giving a hearing to the .....

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other remedies open to him under-the law, is not one which bars the jurisdiction of the High Court to entertain the petition or to deal with it, but is rather a rule which Courts have laid down for the exercise of their discretion. The law on this matter has been enunciated in several decisions of this Court but it is sufficient to refer to two cases: In Union of India v. TR Varma (1), Venkatarama Ayyar, J, speaking for the Court said: Ït is well-settled that when an alternative and equally .....

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v. The Income Tax Investigation Commission (). And where such remedy exists, it will be a sound exercise of discretion to refuse to interfere in a petition under Article 226 unless there are good grounds therefore." 32. In the case of Babu Ram Prakash Chandra v. Antarim Zila Parishad Muzaffar, reported in AIR 1969 SC 556, the Honble Supreme court has ruled that the High Court can entertain a writ petition even in the case where alternative remedies have not been exhausted provided a tribuna .....

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f the High Court to issue a prerogative writ. It is true that the existence of a statutory remedy does not affect the jurisdiction of the High Court to issue a writ. But, as observed by this Court in Rashid Ahmed v. The Municipal Board, Kairana [(1950)SCR 566] "the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs and where such a remedy exists it will be a sound exercise of discretion to refuse to interfere in a writ petition un .....

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e Court, observed: "In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will like only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute (Halsburys Laws of England, 3rd Ed., Vol. II, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate .....

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convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies. In the King v. Postmaster General Ex parte Carmichael (1928)1)K 291) a certiorari was issued although the aggrieved party had and alternative remedy by way of appeal. It has been held that the superior court will readily issue a certiorari in a case where there has been a denial of natural just .....

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sed exceptions to the doctrine with regard to the exhaustion of statutory remedies. In the first place, it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to Move the High Court under Article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course (See the decisions of this C .....

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