TMI Blog2017 (2) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... illment of certain conditions, when so imported without fulfilling or satisfying such conditions amount to importing prohibited goods in terms of Section 11 read with Section 125 of the Act. Therefore, we find no merit in the contention canvassed that such of those clandestinely imported cosmetics and toiletries goods should also be permitted to be redeemed by the Commissioner of Customs and failure to do so vitiates the order is without any merit or substance. The Commissioner of Customs has no power to waive the conditions subject to which such cosmetic products can be imported as he is not the Competent Authority but someone else. Hence, the exercise of discretion has been properly carried out by the Commissioner of Customs. There are no valid mitigating factors or compelling circumstances warranting the exercise of discretion to offer payment of redemption fine in lieu of confiscation. Neither are there any special equities calling for such an exercise. Appeal dismissed - decided against appellant. - Writ Appeal Nos. 821 and 822 of 2016 - - - Dated:- 31-1-2017 - Nooty Ramamohana Rao And Anita Sumanth, JJ. For the Appellant : Mr.Vijay Narayanan, Sr. Counsel, for Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 was filed on 22.10.2013 with the Customs House Chennai, declaring therein the import of 2070 cartons of Air-fresheners for a value of ₹ 6,50,208/-. This valuation of the goods was not accepted by the Customs House and the value of goods were assessed by enhancing it to ₹ 12,09,386/- and the Duty payable thereon was assessed as ₹ 4,26,981/-. The writ petitioner, has paid this amount of Duty. 6. Thereupon, instead of clearing the goods, the Customs Department has taken up the Bill of Entry for second check appraisement and examination. During the said course, certain difference in the weight of the consignment was noticed and accordingly the cargo was detained on 28.10.2013. Necessary entry is made in the discrepancy register. On 06.11.2013, a communication was lodged by the writ petitioner with the Customs House that due to an inadvertent mistake the overseas supplier has despatched the entire quantity of supplies which were initially negotiated by the importer, though he asked for only room fresheners to be despatched for the present. Hence, a revised invoice dated 29.10.2013 was filed showing the total value of goods at USD 52339 for 3463 cartons, out of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtending the time for issuance of show cause notice for adjudication, till 03.12.2014. It is this order dated 02.06.2014, which is challenged in W.P.No.30789 of 2015. The entire case of the petitioner in this writ petition revolves around the fact that the consignment having been detained on 28.10.2013 and was sealed by drawing the necessary mahazar nama on 11.11.2013 and thus access and possession of the goods having effectively been denied to the writ petitioner effective from the said dates and hence such an act of the Customs House, Chennai, amounts to 'seizure'. And time has to be reckoned latest from the date 11.11.2013, for purposes of application of Section 110 of the Act. The writ petitioner derives support for the above plea from a Judgment rendered by the Calcutta High Court, to which we would advert to in detail a little later on. 10. A show cause notice dated 02.12.2014, under Section 124 of the Act, came to be issued as to why the value declared as well as the value mentioned in the revised invoice dated 29.10.2013, should not be rejected and the value of the goods imported be not redetermined at ₹ 1,00,04,680/- in terms of Rule 9 of the Customs Valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms House have undertaken a detailed examination of the container by de-stuffing the cartons contained therein and prepared a detailed mahazarnama on 11.11.2013 and the container was once again sealed. Thus, the writ petitioner/appellant has been successfully and effectively prevented from gaining access, control and or possession of the goods imported in spite of payment of necessary Duty thereon. Therefore, the 'act of detention of goods' by the customs amounts to seizure of the goods. When once the goods are seized and if no show cause notice was drawn within a period of six months thereafter, such goods become liable to be released unconditionally. In spite of making such a specific request on 19.05.2014, the Commissioner of Customs has drawn necessary show cause notice the next day on 20.05.2014 proposing to extend the time limit to commence the adjudication proceedings by a further period of six months. It is contended that when once the six months period has elapsed, the question of invoking the proviso to sub-section (2) of Section 110 of the Act would not arise. The goods ought to have been unconditionally released. Learned Senior Counsel places strong reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny specified description. Section 12 is the charging section for levy of Duties of Customs on goods imported into India. Sub-section (1) of Section 17 obliges an importer to self assess the Duty leviable on such goods. Whereas sub-section (2) thereof authorized any proper officer to verify self assessment of such goods and for that purpose examine or test any imported goods as may be necessary. Sub-section (4) thereof empowers, where it is found on verification, examination or testing of the goods imported that the self assessment is not done correctly but re-assess the Duty leviable on such goods without prejudice to any other action which may be taken under the Act. Sub-section (5) enables the proper Officer to pass a speaking order of reassessment within 15 days from the date of reassessment of the Bill of Entry. Where reassessment has not been done or a speaking order has not been passed, the proper Officer may audit the assessment of the Duty of the imported goods. Section 18 provides for revisional assessment of Duty in certain contingent circumstances. 17. Chapter VII of the Act dealt exhaustively with clearance of imported goods and export of goods. Section 45 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y third parties. Section 46 obliges the importer of goods, other than goods intended for transit or transshipment, to make an entry thereof by presenting electronically to the proper Officer a Bill of Entry for home consumption or warehousing in a prescribed form. Sub-section (2) thereof further mandates that the Bill of Entry shall include all the goods mentioned in the Bill of Lading or other receipt given by the carrier to the consignor. Sub-section (4) makes it clear that the Importer while presenting a Bill of Entry shall make and subscribe to a declaration as to the truth of the contents of such Bill of Entry and in support of such declaration produce the invoice, if any, relating to the imported goods. Section 47 deals with clearance of goods for home consumption. Sub-section (1) empowers a proper Officer, upon being satisfied that the goods entered for home consumption are not prohibited goods and that the importer has paid the import Duty, if any leviable thereon may make an order permitting clearance of the goods for home consumption. Sub-section (1) of Section 47 also, thus allows examination/inspection of the goods for being satisfied that the goods imported are not pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of their detention as urged. It is wholly proper to note that in law there is a well marked distinction between Detention and Seizure . While every detention does not amount to seizure, but every seizure automatically encompasses detention. Further, while seizure can lead to the consequential confiscation, every detention need not necessarily lead to any such inevitable result. (See. Gian Chand V. State of Punjab 1983 (13) ELT 1365 SC.) 20. It is also to be noticed that under the proviso to sub-section (2), the Commissioner of Customs has been empowered to extend the aforesaid period of six months if there is sufficient cause shown for not issuing the show cause notice under Section 124. 21. Learned Senior Counsel placing reliance upon sub-section (2) of Section 110, has contended that the goods have been seized in the instant case on 11.11.2013 and the show cause notice has not been drawn under Section 124 of the Act within the period of six months reckoned therefrom and hence the goods are liable to be returned to the importer. For the failure of the Customs Officials to adhere to this requirement of law, compelled the importer to institute the first writ p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94 was cut open and the container was de-stuffed. The carton boxes were found serially numbered as mentioned in the mahazar drawn on 12.11.2013. It was also recorded that Shri Mahesh Kumar Singh and Shri C.S.Ibrahim have vouched that the goods were the same that were examined and inventoried on 12.11.2013. Since the importer had imported goods which were not declared in the Bill of Entry, and thus attempted to smuggle the undeclared goods by way of concealment behind some of the declared goods at the rear portion of the container, the consignment was seized for further action under the provisions of the Act. At the end of the mahazar so drawn, it is clearly recorded before applying the seal once again, as under mahazar drawn seizure effected by me . Thus the seizure of the imported goods in the instant case has been effected only on 03.12.2013 at 15 hours. What was really undertaken on 11.11.2013 and 12.11.2013 is mere examination of the imported goods and inventorisation of the entire goods imported, by de-stuffing of the cartons contained in the container, to verify that they tally exactly with the disclosure made in the Bill of Entry. 24. We are clearly of the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large number of goods undisclosed and concealed in the container as many as 2741 cartons which are not declared did the occasion arise for consideration as to whether the goods are liable to be confiscated or not. Under Clause (i) of Section 111, goods found concealed in any manner in any package either before or after unloading are liable for confiscation. Unless the goods become liable for confiscation, they cannot be seized. Hence, the exercise carried on on 11th and 12th November, 2013 is only an ascertainment exercise as to whether the goods imported tally with the details found mentioned in the import manifest delivered or in that guise any clandestine import of undeclared goods is attempted at. Unless a correct factual finding is arrived at, the occasion for application of mind as to whether such goods are liable to be cleared for Home Consumption or liable to be confiscated under Section 111 of the Act, would not arise. Hence, the examination and inventorisation undertaken on 12.11.2013, does not amount to effecting seizure of such goods. 26. It will be relevant to notice in this context that the Commissioner of Customs has drawn a show cause notice under the provisio t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said goods were kept and which has been made Annexure 'X' collectively to the affidavit-in-reply affirmed on behalf of the appellants. 8. In support of his submission Mr. Panja firstly referred to a Bench decision of this court in Collector of Customs and Central Excise, West Bengal and Ors. v. Hindustan Motors Ltd. and Anr., 1979 (4) E.L.T. Page J 313, where the same question as to the distinction between seizure of goods and prohibitory order within the meaning of Section 110(1) of the Customs Act and the proviso thereto, fell for consideration. Mr. Panja submitted that, as in the instant case, in the said case also, the goods in question were sealed by the Customs authorities. In such context, the court observed that if the goods were sealed with the seal of the Assistant Collector of Customs, such an overt act of sealing the packed and re-packed drums amount to exercise of dominion over the goods. In other words, it is an act of seizure of the goods within the meaning of Section 110(1) of the Customs Act, 1962 and not a prohibitory order in terms of the proviso thereto. 20. Having considered the submissions made on behalf of the respective parties we are i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such goods to be removed from the Customs area or otherwise deal with them except and in accordance with the permission obtained in writing from the Proper Officer, it becomes clear that the goods imported shall continue to remain in control and custody of the Customs Officer and they remain to be so till they are cleared. Any such retention of custody of the goods and their control does not, in law, amount to passing of dominion over the same from the owner to the Customs. Hence, the goods are merely subjected to examination first in this case on 11.11.2013 before contemplating their seizure. 30. It is manifestly clear that the imported goods which have been unloaded in a Customs area shall remain in the custody of the Officer to whom their custody was entrusted under Section 45 of the Act and they continue to be remain under his custody till they are cleared for home consumption under Section 47 of the Act. There is no doubt that no such order clearing the goods has been passed in the present case. Consequently, the access or control or right of usage of the imported goods is not available at all to the importer, except under an express permission granted by the Proper Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 114 of the Act. 33. At the outset, it will be appropriate to notice that under Clause (m) of Section 111 of the Act, any goods which do not correspond in respect of value or in any other particular with the entry made under the Act, are also liable to be confiscated. Whereas Section 119 renders any goods used for concealing the smuggled goods also liable for confiscation. The finding of fact recorded by the Commissioner of Customs in the course of his order, is that the cosmetic items which have not been disclosed in the import manifest delivered to the Customs, were found concealed behind the Cartons containing the declared goods (air fresheners). He therefore, observed that it negates the importers augment that the shipper had sent these cosmetics without their knowledge and that the mistake was unintended. The subsequent filing of revised invoice on 06.11.2013 has been found as a clear after thought, having been lodged after the goods were detained on 28.10.2013. Therefore, the Commissioner of Customs has arrived at a finding of fact that the importer with willful intent attempted to clear the consignment by smuggling cosmetics in the guise of importing air fres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is commonly understood, the expression may clearly indicates vesting of discretion while the expression shall has the ring of the mandate to do a particular thing provided thereunder. The first part of sub-section (1) of Section 125 clearly dealt with the situation arising out of confiscation of goods, the importation or exportation whereof is prohibited under the Act or under any other law for the time being in force. Thus, in cases the importation or exportation of goods is prohibited, a discretion is vested in the competent authority to provide for an option to pay a fine in lieu of such confiscation. Whereas the latter part of sub-section (1) of Section 125 dealt with importation or exportation of other goods obviously meaning those which are not prohibited from being imported or exported. In such a case, the option for payment of redemption fine has to be necessarily extended by the adjudicating officer. It is only appropriate to remind that the adjudication process under both Sections 124 and 111 is only in relation to the goods, the object of the Customs Act primarily being to ensure that there is no illegal importation of goods. The expressions prohibited under this Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he formulation of the export and import policy and shall be responsible for carrying out that policy. Under Section 7 of the said Act, no person shall make any import or export except under an Importer-exporter Code Number granted by the Director General or the officers authorized by the Director General in that behalf, in accordance with the procedure specified. There is no denying the fact such an Import Code Number was obtained in the present case. Under Section 11(1) of the said Act, no export or import shall be made by any person except in accordance with the provisions of this Act, the rules and orders made thereunder and the export and import policy for the time being in force. Under sub-section (2) of Section 11, where any person makes or abets or attempts to make any export or import in contravention of any provision of this Act or any rules or orders made thereunder or the export and import policy, he shall be liable to a penalty, which can be five times the value of the goods in respect of which any contravention is occurred. Under sub-section (5) of Section 11, in contravention of any provision of this Act and its rules or orders made thereunder or the export and import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the licensing authority. Rule 129A dealt with the Form and manner of application for Registration Certificate for importing cosmetics referred to above. Such application shall be made for Registration of cosmetics intended to be imported into India in Form 42 by every importer and shall be accompanied by a fee of 250/- US dollars or its equivalent to Indian rupees for each brand of cosmetics. Under Rule 129(C), the licensing authority was required to issue a Registration Certificate in Form 43 subject to the conditions contained therein. There is no material available on record to vouch for any such Registration Certificate in Form 43 has been obtained by or on behalf of the importer. Under Rule 129(D), the Registration Certificate so issued shall be valid for a period of three years from the date of its issue unless it is sooner suspended or cancelled. Under Rule 129(G), no cosmetic shall be imported unless it complies with the specifications prescribed under Schedule S and Schedule Q or any other standards of quality and safety applicable to it and other provisions under the rules. Under Rule 129(H), no cosmetic shall be imported unless it is packed and labeled in conformity with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istration certificate from the Central Drug Standard Control Organization and therefore, it is found that the importer did not possess necessary permission/registration certificate from the competent authority under the Drugs and Cosmetics Rules, 1945. In other words, goods which are liable to be imported subject to fulfillment of certain conditions, when so imported without fulfilling or satisfying such conditions amount to importing prohibited goods in terms of Section 11 read with Section 125 of the Act. Therefore, we find no merit in the contention canvassed that such of those clandestinely imported cosmetics and toiletries goods should also be permitted to be redeemed by the Commissioner of Customs and failure to do so vitiates the order is without any merit or substance. The Commissioner of Customs has no power to waive the conditions subject to which such cosmetic products can be imported as he is not the Competent Authority but someone else. Hence, the exercise of discretion has been properly carried out by the Commissioner of Customs. 40. Further, in the present case there are no valid mitigating factors or compelling circumstances warranting the exercise of discretion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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