TMI Blog1974 (9) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... y carrying on the business of road transport. The consignment note of that consignment was No. 6872. The consignment was purported to contain readymade garments. Both the consignor and the consignee were ultimately found to be non-existent fictitious firms and the consignment was found to contain 347 pieces of foreign watches. In the adjudication proceeding that subsequently followed none turned up to claim the watches. ( 2. ) On September 2, 1967 the Customs authorities acting on an information searched the business premises of the petitioner at Calcutta and recovered the consignment under suspicious circumstances in spite of a determined attempt on the part of the employees of the petitioner company to secret the actual consignment and mislead the authorities conducting the search by interpolating the same consignment number to another package. When recovered under such circumstances the customs authorities seized the goods on a reasonable ground for believing that the goods were smuggled goods. ( 3. ) On April 26, 1968 the Collector of central Excise and Customs served on the petitioner a show cause notice calling upon them to show cause why penalty should not be imposed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, two orders dated May 30, 1970 and November 7, 1970 of the Board and the one dated February 1, 1972 of the central Government the petitioner has moved this Court on a writ petition and has obtained the above Rule. The Rule is being contested by the respondents who have filed an affidavit-in-opposition. ( 8. ) Mr . Sen appearing on behalf of the petitioners has first contended that the entire proceeding is illegal and without jurisdiction inasmuch as the show cause notice itself was issued on an extension of time granted on an ex parte order of the Collector dated February 24, 1968 made under the proviso to section 110 (2) of the said Act. Secondly, Mr. Sen has challenged the order imposing the penalty on merits. Lastly, Mr. Sen has contended that the petitioner's appeal to the Board had wrongly been dismissed for nonfulfilment of an obligation imposed as a result of an ex parte order refusing the petitioner's prayer for relief under the proviso to section 129 (1) of the Act. ( 9. ) Mr . Das, learned Counsel for the respondents has contested each of the points so raised by Mr. Sen. So far as the first point raised by Mr. Sen is concerned, Mr. Das has not disputed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the customs authorities can hold back goods seized even beyond the prescribed period of six months without issuing a show cause notice under section 124 (a ). The ex parte order of extension of time to show cause was held to have invalidated the continued seizure and detention of the goods. In that case there was no direct issue before the Supreme court as to what would be the effect of such an extension on a proceeding for confiscation or imposition of penalty for which the statute has provided no limitation. Unlike the contention of mr. Sen now before me nobody pleaded in that case that the time prescribed by proviso to section 110 (2) is really a limitation prescribed for a proceeding under section 124 and the initiation thereof on a notice to show cause. ( 11. ) No doubt the Allahabad decision relied on by Mr. Sen may be said to be incidentally supporting him in his contention in so far the learned Judge held that the show cause notice under section 124 itself was rendered illegal because of ex parte extension of time under proviso to section 110 (2 ). The learned Judge relied on the decision of the Supreme Court in the aforesaid case of Assistant Collector Customs v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper perspective. It was an appeal from a Bench decision of this Court reported in A. I. R. (1968)Cal. 28. The decision of this Court was affirmed by the Supreme Court. In a. I. R. (1968) Cal. 28 one of the prayers made before this Court was return of the goods seized and in considering such a claim, this court held that the notice under section 124 (a) not having been issued within six months and the extension having been illegally obtained exparte, the goods are liable to be returned. Notice under section 124 (a)was also independently challenged in that case and was set aside by this court not on the ground that it was not issued within six months as prescribed by the proviso to section 110 (2) but on a totally different ground, namely, that the notice was materially vague. This court specifically considered the question as to what would be the effect of nonissue of a notice under section 124 (a) within six months on the proceedings for confiscation and imposition of penalty and this Court held: the next question is as to what is the effect of the second extension being invalidated. So far as section 110 is concerned it deals, not with the issue of notice but with the seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed for non-compliance with the requirement of section 129 (1) after the petitioner's application for the relief contemplated by the proviso thereto was rejected ex parte on an ex parte report. The undisputed facts on the points as they appear from records produced by Mr. Das are as follows:- ( 16. ) The petitioner preferred an appeal against the order imposing the penalty on October 3, 1969. They made a separate application on the ground of hardship as made out in the application itself praying for an order that prior deposit of the amount of penalty as required under section 129 (1) may be dispensed with. On receipt of the petition of appeal an officer of the Board by an interdepartmental correspondence dated October 10, 1969 forwarded the appeal petition to the Collector for report and therein asked for the following three informations: (i) Whether the appellant has paid the duty and or the penalty payable according to the order appealed against; (ii) the exact date of the receipt of the order appealed against by the appellant; (iii) the financial conditions of the appellant . ( 17. ) The Collector on his own enquiries submitted a report to the Board on May ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that when the section itself contemplates no entertainment of an application or of hearing being given to parties to support thereof, it would not be proper for this court to read into the section any such liability. ( 19. ) I am, however, unable to accept this contention of Mr. Das Section 129 (1) of the Customs Act with its proviso is set our here under : (1) Where the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Customs authorities or any penalty levied under this Act, and person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied; provided that where in any particular case the appellate authority is of opinion that the deposit of duty demanded or penalty levied will cause undue hardship to the appellant, it may in its discretion dispense with such deposit, either unconditionally or subject to such conditions as it may deem fit. (2) If upon any such appeal it is decided that the whole or any portion of such duty or penalty was not livable, the proper officer shall return to the appellant such amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the board on the issue involved in exercise of such discretion may-if decided against the appellant-adversely affect him, it is incumbent for the Board to hear the appellant on the application and dispose of the same on contest. This position, in my view, follows from the very same principles as have been laid down by the Supreme Court in malhotra's case referred to hereinbefore. ( 21. ) That apart, in my considered opinion, there is an additional ground for thinking that disposal of a prayer made for relief claimed under sec. 129 (1)proviso requires a hearing. As pointed out herein before, disposal of such a claim involves determination of objective tests namely either the hardship to the appellant or such other relevant facts as may enter into consideration for exercise of judicial or quasi judicial discretion vested by the said provision. In the matter of such determination, it is but necessary that the parties who are likely to be affected by such determination of facts should be heard. Reference may be made to the decision of the Supreme Court in the case of Daud Ahmed v. District Magistrate, Allahabad, A. I. R. 1972 S. C. 896. It was observed by His Lordship ..... X X X X Extracts X X X X X X X X Extracts X X X X
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