Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (9) TMI 879 - MADRAS HIGH COURT

2016 (9) TMI 879 - MADRAS HIGH COURT - 2016 (344) E.L.T. 1154 (Mad.) - Redemption of gold seized on payment of redemption fine - Section 125 of the Customs Act 1962 - provisional release of goods under Section 111(d) of the Customs Act, 1962 - prohibited goods - discretionery power of competent authority in taking a decision - whether the competent authority correct in denying the release of goods, thereby imposing absolute confiscation in exercise of its discretionery power? - Held that: - .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mission [2009 (5) TMI 904 - SUPREME COURT] referred where it was held that the exercise of discretion has to be in conformity with the purpose for which, it is conferred, object sought to be achieved and reasons to be recorded. - When discretion is exercised under Section 125 and if any challenge is made under Article 226 of the Constitution of India, the twin test, to be satisfied is "relevance and reason". In the light of the judgments of the Hon'ble Apex Court and applying the same to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an For the Respondent : Mr.M.Abdul Nazeer JUDGMENT ( Judgement of this Court was made by S. Manikumar, J. ) Civil Miscellaneous Appeal is directed against the Final Order No.455 of 2007, dated 20.04.2007, passed by Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Chennai 600 006. The Tribunal, while setting aside the Order-in-Original No.31 of 2000, dated 31.03.2000, passed by the Commissioner of Customs, Madras-1, directed him, to give option to the 1st respondent .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, as to whether, he was carrying any gold, his answer was 'No'. However, on examination of his baggage, 111 broken bits of gold biscuits, totally weighing 2548.3 grams, were found and recovered from certain folding scissor boxes and stapler pin boxes. In addition to other miscellaneous items, they were seized. Gold was valued at ₹ 10,34,355/- and other goods were valued at ₹ 41,117/-. All the above, were in excess of the declared items. 3. The Commissioner of Customs (Air), C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pondent was arrested on 18.09.1999 and remanded to judicial custody. A show cause notice was issued to the 1st respondent, calling upon him, to show cause, as to, (i) Why 111 broken bits of gold biscuits totally weighting 2548.3 grams valued at ₹ 10,34,355/- (M.V.) should not be confiscated under Section 111(d)(i)(l) and (m) of the Customs Act, 1962. (ii) Why the material objects such as aluminum foil, black gum tape, rose brand folding scissors packets, MAX stapler pin packets, and the su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he show cause notice on 03.01.2000, no reply was received till 02.03.2000, and hence, the adjudicating authority granted, personal hearing on 15.03.2000. After hearing the 1st respondent and considering the material on record, Clause 3 of the Foreign Trade (Exemption from application of rules in certain cases) Order, 1993, issued under Foreign Trade (Development and Regulation) Act, 1992, r/w. Customs Notification No.171/94, dated 30.09.1994 (as amended), provisions of the Customs Act, 1962, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 41,117/- (CIF), under Section 111(d)(i)(l) and (m) of the Customs Act, 1962, r/w. Section 3(3) of the Foreign Trade (Development and Regulations) Act, 1992. 7. However, the Commissioner of Customs has allowed the 1st respondent to redeem the same, on payment of ₹ 20,500/-, within 30 days of receipt of the Order in Original, dated 31.03.2000. He has also ordered that the duty at the appropriate rate, would be chargeable, on redemption of goods, stated supra. 8. The Commissioner of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

10. Being aggrieved by the Order-in-Original No.31 of 2000, dated 31.03.2000, the 1st respondent has filed Appeal No.C/589/2000, before CESTAT, Chennai. After hearing the parties, by observing that there is no need for absolute confiscation of the goods, and under Section 125 of the Customs Act, 1962, option for redemption against payment of fine is available to the 1st respondent, in respect of gold also, and that there is no bar against such option, by reason of the goods, being an item notif .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ine. Being aggrieved by the same, instant Civil Miscellaneous Appeal is filed. 11. Record of proceedings shows that while entertaining the appeal, this Court has framed the following substantial question of law, Whether the Tribunal finding that under Section 125 of the Customs Act, 1962, the appellant ought to have been given the option of redemption against payment of fine, when Section 125(1) of the Act, also incorporated a word, Maypertaining prohibited goods, an option of confiscation power .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Customs (Airport), Chennai reported in 2011 (266) ELT 167 (Mad.), submitted that, on the facts and circumstances of the instant case, when gold is attempted to be smuggled, and when violations of Notification No.171/94, dated 30.09.1994 (as amended), was apparent on the face of record, gold seized is liable to be confiscated. He further submitted that when the adjudicating authority, has considered the provisions of the Customs Act, 1962, and Notification, stated supra, order of the Tribunal, g .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unal cannot direct the said authority, to exercise discretion, in favour of the respondent, in which case, there is nothing for the competent authority to exercise his discretion. He further submitted that use of the word, may in Section 125 of the Act, confers discretion on the adjudicating authority to pass appropriate orders, depending upon the facts and circumstances of each case. 14. Placing reliance on a decision of the Calcutta High Court in Commissioner of Customs (Preventive) v. Uma Sha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(being prohibited), option, as to whether to release the same, on payment of redemption fine or order for absolute confiscation, is with the exclusive jurisdiction of the concerned authority and on the facts and circumstances of the instant case, when after considering Section 125 of the Customs Act, 1962, a detailed order of confiscation has been passed, on merits, it would not be appropriate to CESTAT, Madras, to remand the matter once again, to consider option. 15. Taking this Court through .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the department that the intention of the 1st respondent was to smuggle gold bits, prohibited under law, besides commission of offences, directions of CESTAT, Madras, to exercise discretion under Section 125 of the Customs Act, 1962, in favour of the 1st respondent, amounts to the Tribunal, exercising the jurisdiction, which the Customs Act, 1962, has conferred on the adjudicating authority. Inasmuch as there is a categorical allegation of attempt to smuggle gold and to that effect, there are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld bits and other assorted goods, has been retracted and therefore, the same cannot be treated as admission. Referring to Section 2(33) of the Customs Act, 1962, which defines "prohibited goods", he submitted that import of gold, is not prohibited and therefore, order of CESTAT, Madras, does not require intervention. 18. Learned counsel for the 1st respondent further submitted that the observation of the Tribunal that under Section 125 of the Customs Act, 1962, option for redemption ag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ustoms Act, 1962 and for the abovesaid reasons, prayed for dismissal of the appeal. Heard the learned counsel appearing for the parties and perused the materials available on record. 19. Earlier in W.A.No.377 of 2016, dated 28.07.2016, on similar lines, we have considered a case, under Section 111(d) of the Customs Act, 1962, dealing with provisional release. Instant case deals with Section 125 of the customs act, 1962. On the scope and powers of the customs authority, under the provisions of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ect to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. 39. Positively, prohibited goods are defined, as goods, import or export of which, should be subject to any prohibition under this Act or any other law for the time being in force. Negatively, Section 2(33) of the Act, also states that goods are not pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ords, prohibited goods. 40. Literal interpretation of the words, prohibited goods and the contention that gold is not notified and therefore, to be released, would cut down the wide ambit of the inbuilt prohibitions and restrictions in the Customs Act, 1962 and any other law for the time being in force. (i) In Poppatlal Shah v. State of Madras reported in AIR 1953 SC 274, the Supreme Court held that, It is settled rule of construction that to ascertain the legislative intent all the constituent .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n a Section or other parts of the statute. [Ref. Raj Krishna v. Bonod Kanungo reported in AIR 1954 SC 202]. (iii) In The State of Bihar v. Hira Lal Kejriwal reported in AIR 1960 SC 47, the Supreme Court, at Paragraph 6, held that, To ascertain the meaning of a section it is not permissible to omit any part of it: the whole section should be read together and an attempt should be made to reconcile both the parts. ......The first part gives life to that Order, and, therefore, the acts authorised u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

v. Dr.Vijay Anand Maharaj reported in AIR 1963 SC 946, the Hon'ble Supreme Court held as follows: The fundamental and elementary rule of construction is that the words and phrases used by the Legislature shall be given their ordinary meaning and shall be constructed according to the rules of grammar. When the language is plain and unambiguous and admits of only one meaning, no question of construction of a statute arises, for the Act speaks for itself. It is a well recognized rule of constr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Among them is the rule that that sense of the words is to be adopted which best harmonises with the context and promotes in the fullest manner the policy and object of the legislature. The paramount object, in construing penal as well us other statutes, is to ascertain the legislative intent and the rule of strict construction is not violated by permitting the words to have their full meaning, or the more extensive of two meanings, when best effectuating the intention. They are indeed frequentl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

function of a court is to interpret it "according to the intent of them that made it". From that function the court is. not to resile. It has to abide by the maxim, ut res magis valiat quam pereat, lest the intention of the legislature may go in vain or be left to evaporate into thin air." (viii) If the words are precise and unambiguous, then it should be accepted, as declaring the express intention of the legislature. In Ku.Sonia Bhatia v. State of U.P., and others reported in 19 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny part of it. For, the principle that the statute must be read as a whole is equally applicable to different parts of the same section. .......It also provides for the manner of the exercise of such power. .......... Sub-section (1) of Section 36 is made subject to the fulfilment of the conditions prerequisite, (x) In the case of Reserve Bank of India v. Peerless G.F., & Co., Ltd., AIR 1987 SC 1023, the Hon'ble Apex Court held : "Interpretation must depend on the text and the conte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

text of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tter. The rule of "ex visceribus actus" should be resorted to in a situation of this nature. (xii) In State of Gujarat v. Salimbhai Abdulgaffar Shaikh reported in 2003 (8) SCC 50, the Supreme Court held that, Broadly speaking, therefore, an appeal is a proceeding taken to rectify an erroneous decision of a Court by submitting the question to a higher Court....... ........It is well settled principle that the intention of the legislature must be found by reading the Statute as a whole. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pose that it may express. (xiii) In A.N.Roy Commissioner of Police v. Suresh Sham Singh reported in AIR 2006 SC 2677, the Apex Court held that, It is now well settled principle of law that, the Court cannot change the scope of legislation or intention, when the language of the statute is plain and unambiguous. Narrow and pedantic construction may not always be given effect to. Courts should avoid a construction, which would reduce the legislation to futility. It is also well settled that every s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

upon the Court to avoid a construction, if reasonably permissible on the language, which will render a part of the statute devoid of any meaning or application. The Courts always presume that the legislature inserted every part thereof for a purpose and the legislative intent is that every of the statute should have effect. The legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the legislature will not be accepted except for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oms Act, 1962. Section 2(39) of the Act, defines Smuggling in relation to any goods, which means, any act or omission which will render such goods liable to confiscation under section 111 or section 113. Chapter IV of the Act, deals with prohibition on importation and exportation of goods. Section 11 deals the power to prohibit importation or exportation of goods and the said Section is extracted hereunder: (1) If the Central Government is satisfied that it is necessary so to do for any of the p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ling; (d) prevention of shortage of goods of any description; (e) conservation of foreign exchange and the safeguarding of balance of payments; (f) prevention of injury to the economy of the country by the uncontrolled import or export of gold or silver; (g) the prevention of surplus of any agricultural product or the product of fisheries; (h) maintenance of standards for the classification, grading or marketing of goods in international trade; (i) establishment of any industry; (j) the preventi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e or partial, of citizens of India; (q) the fulfilment of obligations under the Charter of the United Nations for the maintenance of international peace and security; (r) implementation of any treaty, agreement or convention with any country; (s) the compliance of imported goods with any laws which are applicable to similar goods produced or manufactured in India; (t) prevention of dissemination of documents containing any matter which is likely to prejudicially affect friendly relations with an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rt" means the import of any goods in contravention of the provisions of this Act or any other law for the time being in force. 43. Chapter XIII deals with searches, seizure and arrest. Section 110 of the Act, deals with seizure of goods, documents and things and the same reads as follows: SECTION 110. Seizure of goods, documents and things. - (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Official Gazette, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (1), be disposed of by the proper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified. (1B) Where any goods, being goods specified under sub-section (1A), have been seized by a proper officer under sub-section (1), he shall prepare an inventory of such goods containing such details relating t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch goods, in the presence of the Magistrate, and certifying the correctness of any list of samples so drawn. (1C) Where an application is made under sub-section (1B), the Magistrate shall, as soon as may be, allow the application. (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized : Provided tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

...... 45. Chapter XIV deals with the confiscation of goods and conveyances and imposition of penalties. Section 111, dealing with confiscation of improperly goods, etc., read as follows: "The following goods brought from a place outside India shall be liable to confiscation: - (a) any goods imported by sea or air which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such goods; ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ition imposed by or under this Act or any other law for the time being in force; (e) any dutiable or prohibited goods found concealed in any manner in any conveyance; (f) any dutiable or prohibited goods required to be mentioned under the regulations in an import manifest or import report which are not so mentioned; (g) any dutiable or prohibited goods which are unloaded from a conveyance in contravention of the provisions of section 32, other than goods inadvertently unloaded but included in th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h permission; (k) any dutiable or prohibited goods imported by land in respect of which the order permitting clearance of the goods required to be produced under section 109 is not produced or which do not correspond in any material particular with the specification contained therein; (l) any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under section 77; (m) any goods whi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer; (p) any notified goods in relation to which any provisions of Chapter IVA or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened." 46. Section 112 d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g, 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 not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

burden of proof in certain cases and the same is extracted hereunder: (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 where such seizure is made from the possession of any person, - (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the person from whose possession the goods were seized, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f 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 case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit : Provided that, with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on confiscation, property to vest in Central Government. The said Section reads thus, (1) When any goods are confiscated under this Act, such goods shall thereupon vest in the Central Government. (2) The officer adjudging confiscation shall take and hold possession of the confiscated goods. ............ 53. ..........One of the important aspects to be taken note by the authorities while exercising their powers under Section 125 of the Act is whether, import of goods is prohibited, within the mea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ere is prohibition or restriction, in the Customs Act, 1962 or any other law for the time being in force. ............. 55. In the light of the above, let us consider the decisions, relied on by the learned counsel appearing for both parties. 56. In N.K.Bapna v. Union of India reported in 1992 (60) ELT 13 (SC), the petitioner therein was the Managing Director of Company, engaged in the business of manufacture and production of plastic compounds, plastic films and sheets and plastic chemicals. A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd Section 2(39), which defines, Smuggling, the Hon'ble Apex Court held that, The third point made by Sri Sen is that once goods are cleared by the customs authorities, they are not liable to confiscation unless the order granting clearance is reversed in appropriate proceedings. He places reliance for this proposition on Union of India v. Jain Shudh Vanaspathi [1992 (1) Scale 34], affirming the decision of the Delhi High Court in Jain Shudh Vanaspati Ltd., and Anr. v. Union of India & O .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the goods were not liable to confiscation. We are here concerned with the question whether the goods are liable to confiscation under s.111(j) and this question has to be answered in the affirmative in view of the language of the section. The conclusion here that the goods are liable to confiscation does not go behind or ignore the effect of the order of clearance, as in that case. It accepts the fact of clearance and proceeds on the footing that the goods, rightly cleared under s.59, have been .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by the revenue, a Hon'ble Division Bench directed export of the goods, during the pendency of adjudicatary proceedings. While testing the correctness of the same, the Hon'ble Supreme Court, at Paragraphs 2 and 3, held as follows: 2. We fail to appreciate how this intervention could have been made by the High Court in a matter of this kind at that particular stage. Sri Chidambaram, learned senior counsel, however, submitted that respondents would in any event be entitled to have the goods .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

proceedings in rem. Until the culmination of the adjudication it is difficult to envisage any right on the part of the respondents from whom they are seized to export them on the basis of a future title they expect to acquire by payment of fine. Learned Counsel, however, says that it would earn foreign exchange for the country. But sanctity of legal proceedings cannot be whittled down on grounds of such expediency. 4. In the circumstances, we set aside both the orders of the learned Single Judg .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

roceedings in the matter. The claim of the respondents to entitlement to redeem the goods by payment of fine in lieu of confiscation may be considered by the authority at the appropriate stage and in accordance with law. If the goods are so returned to the respondents, then respondents may become entitled to export them. Against the adjudication the respondents shall, of course, be entited to pursue their statutory appeals etc. ............ 59. In Om Prakash Bhatia v. Commissioner of Customs, De .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Section 113(D) of the Act would be attracted, which states that, any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force. and with reference to the word, prohibition imposed by or under the Act or any other law for the time being in force and also taking note of Section 2(33) of the Act, which defines prohibited goods, with the openi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notif .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus: "What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to "any prohibition imposed by any law for the time being in force in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

quot;, "restricting" or "otherwise controlling", we cannot cut down the amplitude of the word "any prohibition" in Section 111(d) of the Act. "Any prohibition" means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition. From item (I) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But nonetheles .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mport and Export Control Act, 1947. Though in the above case, a contention was raised by the respondent that the gold is not a prohibited item and it was only a restricted item and therefore, there is a mandatory duty, on the part of the proper officer to give option to the person, guilty of adjudicatory proceedings to pay fine, in lieu of confiscation, taking note of the judgment in Shaik Jamal Basha v. Government of India reported in 1997 (91) ELT 277 (AP), the Hon'ble Division Bench of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and in paragraph No.10 of the said judgment the Supreme Court held as follows: 10. From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Sheikh Mohd. Omer v. Collector of Customs, Calcutta and others [(1970) 2 SCC 728], wherein it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibition and that the expression do .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

quot;. That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression "any prohibition" in Section 111(d) of the Customs Act, 1962 includes restrictions. Merely because Section 3 of the Imports and Exports (Control) Act, 1947, uses three different expressions "prohibiting", "restricting" or "otherwise controlling", we cannot cut down the amplitude of the word "any prohibition" in Sec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

certain conditions. The relevant paragraphs of Import trade control order are extracted as follows: Import of Gold permitted as Baggage. Import of gold in any form, including ornaments but excluding ornaments studded with stones or pearls, is allowed to be imported as part of baggage by passengers of Indian origin or a passenger holding a valid passport issued under the Passport Act subject to the following conditions: that the passenger importing the gold is coming to India after a period of n .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that the national of Pakistan or Bangladesh shall be deemed to be not of Indian origin. A spouse (not being a national of Pakistan or Bangladesh) of a person of Indian origin shall also be deemed to be of Indian origin. 8. ............ 9. In view of meaning of the word prohibition as construed laid down by the Supreme Court in Om Prakash Bhatia case we have to hold that the imported gold was prohibited goods since the respondent is not an eligible passenger who did not satisfy the conditions. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

orted in 2012 (275) ELT 300 (Ker)(DB), there was an attempt by the appellant therein to smuggle gold, weighing over 8 Kgs, by concealing the same, in emergency light, mixie, grinder and car horns, etc. The authorities seized the same. Adjudicatory proceedings ended in confiscation. Contention of the appellant therein, before the High Court, was that Section 125 of the Customs Act, 1962, does not provide for confiscation of goods, other than prohibited goods. Repelling the said contention and fol .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ictions including the necessity to declare the goods on arrival at the Customs Station and make payment of duty at the rate prescribed. There is no need for us in this case to consider the conditions on which import is permissible and whether the conditions are satisfied because the appellant attempted to smuggle out the goods by concealing the same in emergency light, mixie, grinder and car horns etc. and hence the goods so brought is prohibitory goods as there is clear violation of the statuto .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Court in Abdul Razak's case (cited supra), is that even though gold is not an enumerated prohibited item and thus, can be imported, but when such import is subject to restrictions, including the necessity to declare the goods on arrival at the Customs Station and make payment of duty at the rate prescribed, release of the smuggled goods cannot be ordered. 64. Dictum of the Hon'ble Supreme Court and the High Courts makes it clear that gold, may not be one of the enumerated goods, as prohi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

omplied with. When there is a violation of statutory prohibitions, mentioned in Sections 11 and 11A of the Customs Act, 1962 or any other law, for the time being in force or restrictions imposed, such restrictions would also encompass the expression, any prohibition. .................... 66. In Commissioner of Customs, Chennai v. Brinda Enterprises reported in 2010 (262) ELT 239 (Mad.), the company mis-declared the goods and there was no specific licence or certificate of registration. The adjud .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the respondent is not an eligible passenger as he did not satisfy the conditions. The impugned order deserves to be set aside. In view of the above decision, the order, dated 30.04.2008 consequent to the order of remand also is set aside. Since we are of the opinion that the conclusion of the Tribunal was wrong and the order of remand was also erroneous. 67. From the decisions in Samyanathan Murugesan's case (cited supra), Abdul Razak's case (cited supra) and Brinda Enterprises's cas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that there was a false declaration, a Hon'ble Division Bench of this Court held that when the condition is violated, the authorities can definitely have the recourse under law. 69. In Ashish Kumar Chaurasia v. Commissioner, CESTAT reported in 2015 (325) ELT 250 (All.), 79 silver ingots of foreign orgin, were recovered from the premises of the appellant therein. On the facts and circumstances of the case, the Allahabad High Court held that the appellant therein has failed to prove that the se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

umes and two samsung mobiles. A search was conducted by the Officers of Directorate of Revenue Intelligence, Trivandrum, in the baggages of the petitioner therein. Thereafter, statements were recorded. On completion of the investigation, a show cause notice was issued, under Section 124 of the Customs Act, 1962, proposing as to why, the seized goods should not be confiscated and penalty should not be imposed. He sent a reply, disputing the allegations. A Writ Petition has been filed, seeking for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

toms Act, 1962 and hence, cannot be released provisionally under Section 110 of the Customs Act, 1962, at Paragraphs 13 and 14, a learned single Judge of this Court held as follows: 13. Further, when the goods were confiscated under Section 111(d) and 111(I) of the Customs Act, 1962, the question of provisional release under Section 110 of the Customs Act, 1962, does not arise. Therefore, this Court is of view that only after the completion of adjudication process, the adjudicating authority wou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Commissioner of Customs (Prev.), Mumbai v. M.Ambalal & Co., reported in 2010 (260) ELT 487 (SC), after referring to the expression, dutiable goods, duty, import, imported goods, importer and smuggling, etc., the Hon'ble Supreme Court explained the object of the Act and as to how, the words, smuggled goodsshould be read within the definition of imported goods' for the purpose of the Customs Act, 1962. At Paragraphs 6 to 8, 10, 13 and 14, the Hon'ble Supreme Court held as follows: .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

#39; means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. Importer' means in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer. Smuggling', in relation to any goods, means any act or omission which will render such goods liable to confiscation under Section 111 or Sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The rate of duty is fixed by the Customs Tariff Act, 1975. "Import" and "Imported Goods" means that if goods are brought into India, meaning thereby into the territory of India from outside, there is import of goods and the goods become imported goods and become chargeable to duty upto the moment they are cleared for home consumption. The word importer' has been defined in the Act as importer in relation to any goods at any time between their importation and the time whe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

any specified description. Section 11A to 11G speaks of detention of illegally imported goods and prevention of the disposal thereof. Section 12 of the Act is the charging Section. Under this Section, the duty is leviable on all imported goods. Valuation of the imported goods is done as provided under Section 14 of the Act. Section 25 of the Act empowers the Central Government to issue notifications exempting generally either absolutely or subject to such conditions as specified in the notifica .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force, shall be liable for confiscation. Section 112 of the Act provides for penalties for improper importation of goods. ........... 10) It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgements at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances. ............ 13) In short, question before us is whether goods that are smug .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ated as the same, then there would be no need to have two different definitions. 14) In order to understand the true meaning of the term imported goods' in the exemption notification, the entire scheme of the Act requires to be taken note of. As noted above, imported goods' for the purpose of this Act is explained by a conjoint reading of Section 2(25), Section 11, Section 111 and Section 112. Reading these Sections together, it can be found that one of the primary purposes for prohibiti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me light, it would be contrary to the purpose of exemption notifications to accord the benefit meant for imported goods on smuggled goods. 72. Following an earlier decision of this Court in W.P.No.21194 of 2013, dated 08.10.2014, in a decision in R.K.Enterprises v. The Commissioner of Customs reported in 2015-TIOL-2733-HC-MAD-CUS, a learned single Judge held that while considering the prayer for provisional release, the following factors have been considered, viz., (i) whether the goods are proh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ated supra, require consideration. 73. In City Office Equipments v. Commissioner of Customs (Seaport-Import), Chennai-I reported in 2015 (316) ELT 199 (Mad.), a Writ of Mandamus was sought for, directing the respondents therein to assess and permit the clearance of 129 packages of the so called second hand Digital Multifunction Print and Copying Machines, forming the subject matter of the Bill of Entry dated 26.5.2014, upon payment of applicable duties of customs. Insofar as the second hand good .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ds, the import or export of which is subject to any prohibition under the Customs Act or any other law for the time being in force, but it does not include any such goods in respect of which, the conditions subject to which the goods are permitted to be imported or exported have been complied with." 13. Unfortunately, the Act does not define the expression "Restricted Goods". But the definition of the expression "Prohibited Goods" itself contains an indication as to how .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

only two types of goods namely: (1) those that are prohibited; and (2) those that are not prohibited. The Act also recognizes the fact that even prohibited goods could be imported or exported subject to certain conditions. If those conditions are fulfilled, prohibited goods would automatically become non-prohibited goods. While considering Sections 111 and 125(1) of the Customs Act, 1962, the Court held thus, 15. Section 11 of the Act empowers the Central Government, by Notification in the offic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lt out in Chapter XIV. Section 111, which makes certain goods liable for confiscation, states that any prohibited goods brought into any bay or any goods which are imported contrary to any prohibition imposed or under the Customs Act, 1962 or any other law for the time being in force, are liable for confiscation. Under Section 112, the person guilty of improper importation of goods is also made liable for a penalty. But before confiscation, an adjudication is to take place in terms of the proced .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the enumerated subject matters in chapters IV and IV-A of the Customs Act, 1962, which deal with prohibition on importation and exportation goods and detection of illegally imported goods prevention and disposal thereof, morefully described in Sections 11 and 11A of the Act, are also to be treated as prohibited. Goods imported from outside of the territory waters of the country, against any prohibition or restriction under the Customs Act, 1962 or any other law, time being in force, are to b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the Customs Act, 1962 or any other law for the time being in force, then such goods should fall within the definition of Section 2(33) of the Act. 76. A conjoint reading Sections 2(33), 11 or 11A of the Act and other provisions in the Customs Act, 1962, and any other law, for the time being in force, would also make it clear that importation of goods, defined as illegal or prohibited or without complying with the conditions, or in violation of statutory provisions in the Customs Act, 1962 or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he other provisions in the statute, dealing with prohibition/restriction, the same are to held as, "prohibited goods" and liable for confiscation. 77. .........under Section 123 of the Customs Act, 1962, if the importer fails to discharge the burden that the goods seized from him, were not smuggled, then there is a strong reason for the proper officer to seize such goods. Smuggling is nothing but importing goods clandestinely, without payment of duty and such goods would squarely fall .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mporter. If the conditions for import are not complied with, then such goods, cannot be permitted to be imported and thus, to be treated as prohibited from being imported. 79. In Om Prakash Bhatia v. Commissioner of Customs, Delhi reported in 2003 (155) ELT 423 (SC), the Hon'ble Apex Court held that if there is intentional over-invoicing of the goods imported, then such goods imported, fall under the category, prohibited goods, as per Section 2(33) of the Customs Act, 1962. Smuggling under t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ay, in the context, in which, such words appear in an enactment, are reproduced hereunder: (i) In P.T.Rajan v. T.P.M.Sahir reported in 2003 (8) SCC 498, the following conclusions are relevant, 45. A statute as is well known must be read in the text and context thereof. Whether a statute is directory or mandatory would not be dependant on the user of the words shall or may. Such a question must be posed and answered having regard to the purpose and object it seeks to achieve. 46. .. 47. The const .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ow well known that use of the expression shall or may by itself is not decisive. The court while construing a statute must consider all relevant factors including the purpose and object the statute seeks to achieve. (see P.T.Rajan v. T.P.M.Sahir and U.P.SEB v. Shiv Mohan Singh). 85. If Section 125 of the Customs Act, 1962 has to be interpreted in the manner, as contended by the learned counsel for the appellant, to confer powers on the proper officer to release of the goods, pending orders of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ctions, Customs Act, 1962, provides for machinery, by means of search, seizure, confiscation and penalties. Act also provides for detection, prevention and punishment for evasion of duty. 87. The expression, subject to prohibition in the Act and any other the law for the time being in force. in Section 2(33) of the Customs Act, has wide cannotation and meaning, and it should be interpreted, in the context of the scheme of the Act, and not to be confined to a narrow meaning that gold is not an en .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Customs Act, 1962. To add, while interpreting Section 2(33) of the Customs Act, 1962, as to what is prohibition, imposed in other laws, for the time being in force, one cannot ignore, the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, rules framed by way of delegated legislation, like the Baggage Rules, 1998, framed in exercise of the powers conferred under Section 79 of the Customs Act, 1962 or for the matter, Section 77 of the Customs Act, 1962, which mand .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d. ............... 92. Objective satisfaction, at the stage of provisional release or on culmination of adjudication proceedings, casts a duty on the authority, to consider, as to whether, there are prohibitions/restrictions in the Customs Act, 1962, or any other law for the time being in force and whether he is bound to exercise his discretion, satisfying principles of fairness, reasonableness and whether, it is in accordance with the objects sought to be achieved. At the time of provisional re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

djudication or after adjudication, and in that context, the role of the Courts, in exercise of the powers, under Article 226 of the Constitution of India, should be confined only to test such satisfaction, arrived at, by the competent authority, with regard to the objects of the Customs Act, 1962 and any other law for the time being in force. 94. Though the argument of the learned counsel for the appellant is that since gold is not notified, as one of the prohibited goods, by way of any notifica .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d for confiscation and imposed a penalty on the appellants therein. The said order was confirmed by the Tribunal. Before the Hon'ble Apex Court, three questions were raised by the appellant, as to the (1) Validity of the order confiscating the goods. (2) Validity of the order imposing penalty. (3) Failure to give option to the appellants for redeeming the goods on payment of such fine as may be determined by the Collector of Customs in lieu of confiscation. Placing reliance on Section 125(1) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f Customs had assumed that he was bound to confiscate the goods and because of that, he had not adverted to the aspect of exercising his discretion to give an option to the appellant's therein, to pay a fine, in lieu of confiscation. On the facts and circumstances of the reported case, the Hon'ble Supreme Court ordered as hereunder: 4. We therefore direct that the matter be remitted to the Collector of Customs for this limited purpose to this limited extent as to whether or not to give a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of counsel for the appellants that the goods in question, zip fasteners can at present be imported freely, for whatever it is worth. 22. Though in Hargovind Das K.Joshi's case, the Hon'ble Apex Court has remitted the matter to the Commissioner of Customs, for the limited purpose, as to whether or not, to give an option to the appellant therein, to redeem the confiscated goods on payment of such fine, as may be considered appropriate by him, in lieu of confiscation and further directed t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ting authority, directed the adjudicating authority, to release gold, by exercising option in favour of the respondent. 23. When it is the case of the appellant that 2548.3 grams of gold were concealed and not declared, in contravention of Section 77 of the Customs Act, 1962 and that there was a violation of Section 111(d)(i)(l) and (m) of the Customs Act, 1962, r/w. Section 3(3) of the Foreign Trade (Development and Regulations) Act, 1992 and when reference has been made to the Custom Notificat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the 1st respondent was also detained under the COFEPOSA Act, for six months and when the Commissioner of Customs (AIRPORT), had imposed a penalty of ₹ 50,000/- (Rupees fifty thousand only), with Section 112(a) of the Customs Act, 1962, it is unfortunate that without due consideration to the above facts and statutory provisions and the categorical finding of the adjudicating authority, the Tribunal has observed that there is no need for absolute confiscation of the goods. At this juncture, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation was ordered. Referring to Section 125 of the Customs Act, 1962, release of goods was sought for. After considering the manner, in which, goods were sought to be imported, at Paragraph 5, the Hon'ble Supreme Court held as follows: "Under Section 125 a discretion has been conferred on the officer to give the option to pay fine in lieu of confiscation in cases of goods, the importation or exportation whereof is prohibited under the Act or under any other law for the time being in for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rect absolute confiscation of the goods which indicates that he did not consider it a fit case for exercise of his discretion to give an option to pay the redemption fine under Section 125 of the Act. The Tribunal also felt that since this was a case in which fraud was involved, the order of the Additional Collector directing absolute confiscation of the goods did not call for any interference. We do not find any reason to take a different view." 25. In Commissioner of Customs (Preventive) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s only on the suggestion of the learned Counsel appearing on behalf of the appellant that the learned Trial Judge passed the said order although no affidavit-in-opposition had been filed by them. In fact the writ application was disposed of with the consent of the parties. The learned Trial Judge was given the impression by the counsel for the appellant that the gold is not a prohibited item. Had the intention of the appellant been that no discretion should be exercised in favour of the writ pet .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

prohibited item and therefore, there can be an order to release the same, on payment of redemption fine. In the above reported case, while adverting to the substantial question of law, "Whether gold is a prohibited item within the meaning of the provisions of the Customs Act, 1962?" and after considering the statutory provisions under the Customs Act, 1962 and Foreign Trade (Development and Regulations) Act, 1992 and public notices in No.51, dated 27.10.1997 and No.54, dated 04.09.199 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

opment and Regulation) Act, 1992. Section 3 of the said Act reads thus - "3. (1) The Central Government may, by Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. (2) The Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

export and import policy and may also in like manner amend that policy. Pursuant to and in furtherance of the said provisions Export Import Policy for the year 1997-2000 had been taken, Clause 4.1 whereof reads thus - "4.1 Exports and Imports shall be free except to the extent they are regulated by the provisions of this Policy or any other law for the time being in force. The itemwise export and import policy shall be, as stated in columns 3 to 5 of the book, titled "ITC (HS) Classif .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Central Government to prohibit importation and exportation of goods. 8. Section 111 which deals with the power of the Commissioner to confiscate the goods inter alia provided for confiscation of improperly imported goods. Section 111(d) of the Customs Act, 1962 reads thus - "111. The following goods brought from a place outside India shall be liable to confiscation - (d) any goods which are imported or attempted to be imported or are brought within the Indian Customs water for the purpos .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eing in force, and shall, in the case of any other goods, give to the owner of the goods an option to pay in lieu of confiscation such fine as the said officer thinks fit: Provided that, without prejudice to the provisions of the proviso to subsection (2) of Section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable therein. (2) Where any fine in lieu of confiscation of goods is imposed under subsection (1), the owner .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o pay a fine in lieu of confiscation. 11. The principal question which, thus, arises for consideration is as to whether gold is a prohibiited item ? A Public Notice No. 51, dated 27th October, 1997 was issued which reads thus - "Attention is invited to Public Notice No. 214/(PN)/92-97, dated 1st June, 1994 vide which import of gold and silver was allowed without licence by Reserve Bank of India or any other agency to be designated by the Ministry of Finance (Deptt. of Economic Affairs). In .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2002 :- Gold: 710812 00 Other unwrought forms." 12. The same was further amended by a Public Notice No. 54 dated 4th November, 1997 which is to the following effect :- "Attention is invited to Public Notice No. 51/(PN)/97-02 dated 27th October, 1997 on the above subject. In partial modification of the above Public Notice, it is hereby notified that the import of gold and silver shall be permitted to the nominated and authorised agencies by the Reserve Bank of India (RBI)/Ministry of Fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ised by the Reserve Bank of India. 14. The entire case of the writ petitioner/respondent is that they have purchased gold from Standard Chartered Bank which was meant for sale. The said question is essentially a question of fact and as such we need not consider the same in this proceeding as such a question will have to be determined by the statutory authority. 15. Having regard to the provisions of the Customs Act as also the 1992 Act, we are of the opinion that keeping in view the fact that a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n case of legal fiction the court believes something to exist which in reality does not exist. It is nothing but a presumption of the existence of the state of affairs which in actuality is non-existent. The effect of such a legal fiction is that a position which otherwise would not obtain is deemed to obtain under the circumstances." 16. In Commissioner of Income Tax, Madras v. Urmila Ramesh [1998 (3) SCC 6], the Apex Court observed :- "Even though the word "deemed" is not u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ic case where (at ITR p. 93) it was observed as under : (SCC p. 654, para 7) "It is true that by a legal fiction created under Section 41(2) a balancing charge arising from sale of old machinery or building is treated as deemed income and the same is brought to tax; in other words, the legal fiction enables the Revenue to take back what it had given by way of depreciation allowance in the preceding years since what was given in the preceding years was in excess of that which ought to have b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se of computation of assessable income of the assessee under the head 'Business Income' and under Section 80-E(1), in order to compute and allow the permissible special deduction, computation of total income in accordance with the other provisions of the Act is required to be done and after allowing such deduction the net assessable income chargeable to tax is to be determined; in other words, the legal fiction under Section 41(2) and the grant of special deduction in case of specified i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fect of Section 41(2) of the Act in that case, which it did. The two provisions namely Section 10(2)(vii) second proviso of the 1922 Act and Section 41(2) of the Act both create a legal fiction, difference in language notwithstanding." 17. In Aluminium Industries Ltd., v. Collector of Central Excise [1998 (99) ELT 486 (SC) = 1998 (9) SCC 404, it has been held as under: - "4. By virtue of this proviso a legal fiction has been created. The price fixed under any law for time being in forc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ich comes within the first part of Section 125 of the Customs Act." 27. In Punnilathu Bappu Navas v. Union of India reported in 2006 (202) ELT 430 (Bom.), 10,144.20 gms. of gold was seized under Panchanama. Statement under Section 108 of the Customs Act, 1962, was recorded. Taking note of the policy adopted by the Central Government that import of gold beyond 5 Kgs., was not permissible, revisional authority therein, under the Customs Act, 1962, while exercising discretion, allowed gold, we .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9;ble Division Bench of the Calcutta High Court, has negatived the challenge of the petitioner therein. 28. Facts of the reported case is inapposite to the case on hand. That was a case, where the discretion was exercised, having regard to the policy prevailed, at that point of time. Whereas, in the case on hand, the appellant has contended that there was a deliberate attempt to smuggle gold. Merely because, discretion has been exercised by the revisional authority, in the reported case, it cann .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent therein, to redeem prohibited goods, even though they were liable for confiscation, was right or not? The Tribunal upheld the order of the adjudicating authority. By observing that there is discretion on the authority and as the Tribunal had upheld the same and taking note of the word, May under Section 125(1) of the Customs Act, the Bombay High Court, declined to interfere with the discretion exercised by the adjudicating authority. 30. On the facts and circumstances of the instant case, be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

redemption fine amount. When exercise of discretion is conferred on the adjudicating authority to decide, as to whether, such discretion should be exercised in favour of the importer or any other person, falling under Section 112(b) of the Customs Act, 1962 and when in the case of smuggling or attempted smuggling, goods have been imported, in contravention of the provisions of the Customs Act, 1962 or any other law, for the time being in force, and when a prima facie case of attempt to smuggle t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

goods, within the meaning of the Customs Act, 1962 but was only dutiable goods, within the meaning of the said Act, and under such circumstances, the adjudicating authority ought to have exercised his discretion, to allow redemption of the gold seized, upon payment of redemption fine, to be fixed by the adjudicating authority, in terms of Section 125 of the Customs Act, 1962. On the above facts and submissions, the Calcutta High Court, having found that the adjudicating authority has not offere .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rt-Import Policy 2002-07, during the relevant period that import of gold was allowed free and answered the issue. 33. In T.Elavarasan v. Commissioner of Customs (Airport), Chennai reported in 2011 (266) ELT 167 (Mad.), a learned single Judge of this Court considered a case, where gold chain was brought from Singapore, without due declaration. Contending inter alia that the gold was not a prohibited item, provisional release was sought for. Writ Court directed release of gold, on payment of custo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndent therein. Review filed against the Division Bench order, came to be dismissed on 25.04.2011. With due respect, in the decision of the Hon'ble Division Bench, the issue, as to whether, prohibited goods and other miscellaneous goods, attempted to be smuggled, can be released or not, has not been argued in the light of Section 2(33) of the Customs Act, 1962 and decided. 35. In Aiyakannu v. Joint Commissioner of Customs reported in 2012 (281) ELT 223, holder of a Srilankan Passport, was fou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

jected the same. Thereafter, a writ petition was filed. Following the decision of the Hon'ble Division Bench of this Court in Commissioner of Customs v. Samynathan Murugesan reported in 2009 (247) ELT 21 (Mad.), a learned single Judge, at Paragraphs 8 and 9, held as follows: "8. In the present case, the petitioner being a foreign national is not entitled to import the gold in terms of the 1993 order as it will apply only to the passenger of Indian origin or a passenger holding a valid p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itioner's statement given to the Customs Officer referred to supra." 36. In Fortis Hospital Ltd., v. Commissioner of Customs, Import reported in 2015 (318) ELT 551 (SC), show cause notice issued under Section 124 of the Customs Act, 1962 was for confiscation and penalty. Nothing was stated about the payment of duty. But ultimately, final order was passed, including a direction to pay the customs duty. The department attempted to justify the order under Section 125 of the Customs Act, 19 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

adjudicating authority has exercised his option under Section 125 of the Customs Act, 1962, according to the rules of reasons and Justice. After considering the decision of the Hon'ble Supreme Court in UPSRTC v. Md. Ismail reported in 1991 (3) SCC 239 and on the facts and circumstances of the reported case, the Hon'ble Division Bench of Calcutta High Court, held that whenever discretion is vested, the administrative authority shall do well to atleast briefly record the reasons, why they .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the mahazar and he wanted cross-examination of mahazar witnesses and Officers who recorded his statement. 9. On 21.03.2000 Shri Abdul Nazeer, counsel for the accuscd cross-examined Shri.A.Elumalai, Mahazar witness, who interalia staled that there was only one passenger by name Shri.Sinnasamy alongwith the baggage at the Table; that he did not remember the passenger disowning the goods; that the mahazar was read over to him and he has not affixed his signature out of fear. Shri.K.P.H.Paul Moh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

omas Augustian, Intelligence Officer, Directorate of Revenue Intelligence, Chennai stated that he identified Shri.P.Sinnasamy when the passengers were coming out after immigration clearance; that none of the officers brought any person by name Shri Babu Chinasamy; that the Officers were looking for Shri.P.Sinnasamy only and nobody else. The counsel submitted that Shri.P.Sinnasamy is undergoing COFEPOSA detention and is very poor and requested for leniency. 39. After careful consideration of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ods whereas thorough search of his baggage in the presence of witnesses has resulted in the recovery of 111 gold bits totally weighing 2548.3 Grams valued at ₹ 10,34,355/- (MV) and other assorted goods valued at ₹ 41.117A (CIF). 11. In his voluntary statement dated 18-09-99 Shri.P.Sinnasamy narrated the sequence of events that subsequently led to the seizure of 111 gold bits and other assorted goods and he admitted having committed the offence knowingly only for the monetary consider .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted the seizure that there was only one passenger viz., Sinnasamy at the Table and the officers did not bring any other passengers. In view of the above, the contention that he is innocent is not acceptable. It is therefore clear that Shri P.Sinnasamy was knowingly concerned in the import of the aforesaid goods without any valid permit/licence and by way of concealment and non-declaration in violation of Section 77 of the Customs Act 1962 with a view to evade Customs Duty. 12. As per Clause 3 of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ition that the passenger importing the gold is coming to India after period of not less than six months of stay abroad and the import duty on the gold shall be paid in convertible forcing currency. In this case, the passenger stayed abroad a week only. Further he had deliberately attempted to smuggle in 2548.3 gms of gold by concealing and without declaration to Customs, for a monetary consideration. Therefore the said gold bits are liable for confiscation under section 11 l(d),(i),(l) and (m) o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

izen calculators etc., totally valued at ₹ 41,117/- (CIF) are clearly in commercial quantity. Moreover the passenger himself confessed in his voluntary statement that he brings electronic goods from Singapore for sale in India. Hence the aforesaid assorted goods cannot be considered as items of his bonafide baggage. Further the passenger had not made a proper declaration of the goods as required by Section 77 of the Customs Act, 1962 and his intention to evade payment of Customs duty is ev .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er absolute confiscation of the 111 gold bits weighing 2548.3 grams value ₹ 10,34,355/- (MV) under Section 111 (d), (i), (1) and (m) of the Customs Act, 1962, read with Section 3(3) of the Foreign Trade (Development & Regulation) Act 1992. I also order confiscation of the other assorted goods valued at ₹ 41,117/- (CIF) under Section 111 (d), (1) & (m) of the Customs Act 1962 read with the Foreign Trade (Development & Regulation) Act 1992. However, under Section 125 of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Customs Act 1962. Keeping in mind intcralia the submission that the passenger has been detained under the COFEPOSA Act for 6 months, I impose on Shri P.Sinnasamy & penalty of ₹ 50,000/- (Rupees Fifty Thousand Only), under Section 112(a) of the Customs Act, 1962. 40. Thus, after recording a categorical finding of attempted smuggling of 2548.3 gms., of gold, by concealment and without declaration to the customs, the adjudicating authority has exercised his discretion to order absolute co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xercised his discretion in the matter of release of goods seized, and liable for confiscation. Moreover, while exercising the discretion in the abovesaid manner, for two sets of goods, the adjudicating authority, in the forgoing paragraphs, in the Order-in-Original No.31 of 2000, dated 31.03.2000, has given reasons, as to why, gold seized is liable for confiscation. On the facts and circumstances of the case, we are of the view that it cannot be contended that there is any failure on the part of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gold and other goods, used for import and released certain goods on payment of fine and duty. Exercise of discretion has been interfered with by the Tribunal, with a specific direction to give option for redemption, in which event, there is no choice left to the adjudicating authority to act. He has no freedom or liberty to act, according to own will and that he has been compelled to exercise discretion and his power, without control, other than his own judgment and in this context, let us consi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

humour. It is to be not arbitrary, vague and fanciful but legal and regular and it must be exercised within the limit to which an honest man to the discharge of his office ought to find himself. Discretion means sound discretion guided by law. It must be governed by rule, not by humour, it must not be arbitrary, vague and fanciful. 43. In Fasih Chaudhary v. Director General, Doordarshan and others reported in 1989 1 SCC 89, the Hon'ble Supreme Court held that exercise of discretion should b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Supreme Court in Bangalore Medical Trust v. B.S.Muddappa and others reported in (1991) 4 SCC 54, held that "discretion is an effective tool in administration. It provides an option to the authority concerned to adopt one or the other alternative. But a better, proper and legal exercise of discretion is one where the authority examines the fact, is aware of law and then decides objectively and rationally what serves the interest better. When a statute either provides guidance or rules or re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat a particular act should be done' then it is implicit that it should be done objectively, fairly and reasonably. In a democratic set up the people or community being sovereign the exercise of discretion must be guided by the inherent philosophy that the exercise of discretion is accountable for his action. It is to be tested on anvil of rule of law and fairness or justice particularly if competing interests of members of society is involved. Decisions affecting public interest or the nece .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d by the statute itself. The authority exercising discretion must not appear to be impervious to legislative directions. The action or decision must not only be reached reasonably and intelligibly but it must be related to the purpose for which power is exercised. No one howsoever high can arrogate to himself or assume without any authorisation express or implied in law a discretion to ignore the rules and deviate from rationality by adopting a strained or distorted interpretation as it renders .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e power and therefore it is coupled with a duty to shun arbitrariness in its exercise and to promote the object for which the power is conferred which undoubtedly is public interest and not individual or private gain, whim or caprice of any individual." 47. In Indian Railway Construction Co. Ltd. v. Ajay Kumar reported in (2003) 4 SCC 579, at paragraph 13 to 15, the Hon'ble Supreme Court explained the manner in which discretionary power has to be exercised, while discharging administrat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

troops, entering into international treaties etc. The distinctive features of some of these recent cases signify the willingness of the courts to assert their power to scrutinize the factual basis upon which discretionary powers have been exercised. One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is illegality, the second irrationality, and the third procedural impropriety. These principles wer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and Mahindra Ltd.) The effect of several decisions on the question of jurisdiction has been summed up by Grahame Aldous and John Alder in their book Applications for Judicial Review, Law and Practice thus: There is a general presumption against ousting the jurisdiction of the courts so that statutory provisions which purport to exclude judicial review are construed restrictively. There are, however, certain areas of governmental activity, national security being the paradigm, which the courts r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited by the subject-matter of a particular power, in that case national security. Many prerogative powers are in fact concerned with sensitive, non-justiciable areas, for example, foreign affairs, but some are reviewable in principle, including the prerogatives relating to the civil service where national security is not involved. Another non-jus .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arizing the substance of the principles laid down therein we shall refer to the passage from the judgment of Lord Greene in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. (KB at p.229 : All ER pp.682 H-683 A). It reads as follows: It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretions often use the word unreasonable in a rather comprehensive sense. It has frequen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

omething so absurd that no sensible person could even dream that it lay within the powers of the authority. ... In another, it is taking into consideration extraneous matters. It is unreasonable that it might almost be described as being done in bad faith; and in fact, all these things run into one another. Lord Greene also observed: (KB p.230 : All ER p.683 F-G) ... it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body can come to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

easonably arrived at, having regard to the above principles, and must have been a bona fide one. The decision could be one of many choices open to the authority but it was for that authority to decide upon the choice and not for the court to substitute its view. 48. In National Insurance Co. Ltd., v. Keshav Bahadur reported in 2004 (2) SCC 37 = AIR 2004 SC 1581, the Hon'ble Supreme Court held that, The word discretion standing single and unsupported by circumstances signifies exercise of jud .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot;discretion" signifies unrestrained exercise of choice or will; freedom to act according to one's own judgment; unrestrained exercise of will; the liberty or power of acting without control other than one's own judgment. 50. In the reported judgment, the Hon'ble Supreme Court while testing the correctness of a judgment rendered under the Narcotic Drugs and Psychotropic Substances Act, 1985, and the discretion to be exercised by the High Court, explained the principles governin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

control other than one's own judgment. But, when applied to public functionaries, it means a power or right conferred upon them by law, of acting officially in certain circumstances according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others. Discretion is to discern between right and wrong; and therefore, whoever hath power to act at discretion, is bound by the rule of reason and law. 21. Discretion, in general, is the discernment of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ections of persons. 22. The word "discretion" standing single and unsupported by circumstances signifies exercise of judgment, skill or wisdom as distinguished from folly, unthinking or haste;evidently therefore a discretion cannot be arbitrary but must be a result of judicial thinking. The word in itself implies vigilant circumspection and care; therefore, where the legislature concedes discretion it also imposes a heavy responsibility. "The discretion of a judge is the law of ty .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eld as follows: the word 'discretion' connotes necessarily an act of a judicial character, as used with reference to discretion exercised judicially, it implies the absence of a hard and fast rule, and it require an actual exercise of judgment and a consideration of the facts and circumstances which are necessary to make a sound, fair and just determination and a knowledge of the facts upon which discretion may properly operate. When it is said that something it to be done according to t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that falls for determination is the scope for judicial interference in matters of administrative decisions. Administrative action is stated to be referable to broad area of governmental activities in which the repositories of power may exercise every class of statutory function of executive, quasi-legislative and quasi-judicial nature. It is trite law that exercise of power, whether legislative or administrative, will be set aside, if there is manifest error in the exercise of such power or the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e authority in which discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it; it must not act under the dictates of another body or disable itself from exercising discretion in each individual case. In the purported exercise of its discretion, it must not do what it has been forbid .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of discretionary power. The two classes are not, however, mutually exclusive. Thus, discretion may be improperly fettered because irrelevant considerations have been taken into account, and where an authority hands over its discretion to another body it acts ultra vires. 53. In Reliance Airport Developers Pvt. Ltd., v. Airports Authority of India reported in 2006 (10) JT 423 (SC), the Hon'ble Apex Court held that the discretion must be governed by rule and not by humour or fanciful, but by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of exercise of such power has to be gathered from the object of conferment of such power. Non-consideration or non-application of mind to the relevant factors, renders exercise of discretion manifestly erroneous and it cause for judicial interference. In Global Energy Limited and another v. Central Electricity Regulatory Commission reported in 2009 15 SCC 570, the Hon'ble Supreme Court held that the exercise of discretion has to be in conformity with the purpose for which, it is conferred, o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version