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TMI Blog1967 (5) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... of documents produced, 87 watches were released and the balance 181 watches were seized. On that date, a statement was taken from the appellant, a copy whereof is set out at page 12 of the paper book. In that statement he inter alia said as follows: "I have produced Bills against some of the watches for your Inspection. I am however, very unwell and I am not in a position to produce further vouchers or receipts against watches shown in the Inventory. I shall however, produce the same for your inspection as early as possible. I do state that I purchased twenty four watches from the Custom House Sales in the year 1957 or 1958. Out of this quantity I have sold all except two watches which I have produced to you and which I surrender herewith to you." On the 28th March, 1963 the appellant wrote to the Assistant Collector of Customs etc. asking him as to when he could attend with the necessary documents for verification and release of the seized articles As there was no reply to this, a reminder was given on the 8th April, 1963 complaining that owing to seizure of the watches normal business could not be resumed. To this also there was no reply, and on the 17th April. 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut had asked the sellers to look up their record. A request was made that the customs authority should contact the seller for certification as to whether in fact the watch was sold to the appellant by them. On the 18th of September. 1963, 11 more watches were released and on the 27th of February, 1964, 10 more watches were released. Ultimately, a show cause notice dated the 6th March, 1964 was issued upon the appellant which is the subject matter of this application. Before we deal with the show cause notice, it will be necessary to deal with certain provisions of the Customs Act, 1962 (Central Act 62 of 1962) (hereinafter referred to as "said Act") The said Act is an Act to consolidate and amend the law relating to customs. Under Section 160(1) of the said Act, several statutes were repealed, including the whole of the Sea Customs Act, 1878 and the Land Customs Act, 1924. Section 111(d) of the said Act provides that any goods which are imported or attempted to be imported or are brought within the Indian Customs waters for the purpose of being imported, contrary to any prohibition imposed by or under the said Act or any other law for the time being In force, from a place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reports of enquiry and to draw up the show cause Notice within the said period As such a further extension of time for a period of further two months was sought which was granted by the Additional Collector of Customs thus extending the time till 17th March, 1964." 3. What happened was that on the 18th September, 1963 an ex parte application was made for extension of time for four months without any reference to the appellant and on the 19th September, 1963 the prayer was granted by the Additional Collector of Customs The four months' extension would have expired on the 19th January 1964 On the 3rd January 1964 a second extension for two months was applied for by Shri S N Gupta This was also done ex parte and without reference to the appellant On the 20th February, 1964 the Collector of Customs granted a further extension of two months With regard to the second extension. Shri Sachhidananda Banerjee in his affidavit affirmed on 16th December 1965 states as follows in paragraph thereof. "As the enquiries could not be completed within the said extended time, a further four months' time was prayed for on 3rd January 1964 and on 20-2-64 the Additional Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 1962, the burden of proving that the watches are not smuggled shall he on the person from whose possession the watches were seized M/s. Wall-Ion Watch Co have failed to prove the legal Importation of the remaining 110 pcs of watches. 5 M/s Wallton Watch Co are accordingly directed to explain within a week from the date of receipt of this Notice why the aforesaid 110 pcs of watches should not he confiscated under Sec. till(d) of the Customs Act. 1962 read with Section 3(2) of the Imports & Exports (Control) Act and the notifications Issued thereunder. They should also explain within the same period why penal action also should not be taken against them in accordance with provision of Sec. 112 of the Customs Act, 1962." 4. The points argued before us are as follows: The first point relates to the extension of the dates for issuing the show cause notice under the proviso to Sub-section (2) of Section 110 of the said Act. From a plain reading of Sub-section (2), it appears that a notice under Section 124(a) of the said Act must be given within six months of the seizure of the goods If no such notice is issued, then upon the expiry of six months from the date of the seizure, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Collector of Customs, and he merely endorsed his approval In the present case, even if the first extension on the 18th September 1963 was justified, the ex parte order made on 20th February 1964 cannot be justified Notice under Section 124 must be given within six months of the seizure of the goods If it is not so given then the goods have to be returned Upon the expiry of the six months, or any extended time under the proviso, a right for the return of the goods vests in the person from whose possession they were seized The learned Judge in the Court below has held that the extension can be made even after the prescribed time has expired Assuming that this can be done, what is the position with regard to the second extension ? It will be remembered that the goods were seized on the 19th March 1963. The six months' time would expire on the 19ih September 1963 when it was extended for another four months This extension would expire on the 19th January 1964. The application for extension is said to have been made on 3rd January 1964 Since, on the 19th January 1964 no extension order had been made, the right devolved on the appellant to receive back the seized goods. The actua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Government It was held that these proceedings dealt with the question of the rights of the landlord and tenant and therefore, the District Magistrate as well as the Commissioner and the State Government were required to adopt a judicial approach Speaking about the position of the State Government as a judicial authority. the learned Chief Justice said as follows: "It is true that the State Government is authorised to call for the records sun motu, but that cannot alter the fact that the State Government would not be in a position to decide the matter entrusted to its juris-diction under Section 7-F. unless it gives an opportunity to both the parties to place their respective points of view before it is the ends of justice which determine the nature of the order which the State Government would pass under Section 7-F, and it seems to us plain that in securing the ends of justice, the State Government cannot but apply principles of natural justice and offer a reasonable opportunity to both the parties while it exercises is jurisdiction under Section 7-F " The position was recognised in its broad sense in the classical Judgment of Atkin L. J in R. v. Electricity Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted the appellant is entitled to the return of the goods. That by itself may not invalidate the notice itself For that purpose we have to travel to the next point taken, namely the nature of the notice which has been issued under Section 124 of Ihe said Act The point taken is that the notice that has been issued is so vague and uncertain that the appellanl had no reasonable opportunity of defending himself I have already set nut above Section 124 of the said Act. The notice is therefore a statutory notice and conditions laid down in Ihe seclion must be strictly followed If it is necessary to inform a person whose goods are being confiscated, or who is sought to be penalised, of the grounds upon which it is done, it follows that such grounds must be clear and specific so that the person to whom notice in given may have a proper opportunity of defending himself In this connection reference has to be made to Section 123 of the said Act which is in the following terms : "123 (1) where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were found. It is said that he was able to satisfy authorities about the source of some of the watches but not of the others and consequently a number of watches were seized and taken away He then delivered to the authorities a number of documents. His case was that these watches were of old stock. He had been carrying on another business in the name of Welcon Watch Go at 170 Mahatma Gandhi Road. Calcutta which had been closed in the year 1965 and its stock-in-trade was transferred to the Ghowringhee shop. He said that it is very difficult for him to produce documentary evidence of the purchase of each watch. But he gave certain names of dealers in watches from where he had purchased and asked the Customs authorities to enquire of them directly. The notice under Section 124. the relevant part whereof has been set out above, states that on the completion of enquiry, 21 pieces of watches have been released but in case of "most" of the remaining watches parties or firms from whom watches in question were bought by the appellant either did not exist or they staled that they had destroyed their old records and were therefore not in a position to furnish legal importation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o him to combat the charge of conspiracy The principles laid down may well be applied to the facts of the present case. The watcthes seized from the possession of the appellant are sought to be confiscated and a penalty is sought to bt Imposed upon him on the basis that the goods are smuggled goods In evidence thereof it is said that the appellant cannot satisfactorily discharge the onus under Section 123 of the said Act by showing that the goods were not smuggled. He has given reference to the names of various dealers from whom he had purchased the watches many years ago If upon investigation ft is found that some of them do not exist or if others said that they are no! in a position to furnish particulars, then the appellant has to be given details there of. He must be told as to which of the firms cannot be traced at the given address so that he may prove either that they existed at the time of the purchase or that they had shifted to some other address. The statements by the firms concerned must be made available to the appellant. If they have stated that their old records have been destroyed, that is a matter that is not the direct responsibility of the appellant. It is not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requires such knowledge Thus, whereas confiscation can be ordered irrespective of knowledge of the person in whose possession goods are found, the imposition of a penalty requires deliberate action and knowledge. There is. however, no fact stated in the notice, nor is it alleged that the appellant did or omitted to do anything which he was required to do under the law and/or he had any knowledge that the watches seized had been smuggled into the country For all we know, the watches may have been smuggled but the appellant did not know of it. In such circumstances, he would not be liable to penalty. The result is that he has been asked to show cause why he would not be penalised in accordance with the provision of Section 112 of the said Act, without charging him with the ingredients of the offence which would expose him to a penalty. He therefore, can neither give a proper answer nor adequately defend himself. 11. In our opinion, for the reasons set out above the notice under Section 124 dated 6th March, 1964 is not in accordance with law and must be quashed and/or set aside 12. Before I conclude, I must notice an argument put forward on behalf of the appellant and it is as follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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