TMI Blog2019 (1) TMI 1806X X X X Extracts X X X X X X X X Extracts X X X X ..... 124 of the Customs Act in such a case was held to be a must relying upon the various judgments referred as above. Relying on these judgments, we find that the seized goods are required to be returned to the person from whom the seizure has been made of fact of expiry of six month under Section 110 of the Act without extension of time - Regarding the Revenue contention that with effect of the amendment carried out in Section 110(2) of the Customs Act, the requirement of issuance of Show Cause Notice is dispensed with is without any basis - Careful analysis of the provision makes it clear that the right of issuance of the Show Cause Notice for the extension of the period of six months as prescribed under said sub-Section of Section 110(1) remains same from which the emanate right of Show Cause Notice to the affected party in furtherance of Principle of Natural Justice as his rights are being prejudicially affected. The amendment will not obliterate the aforesaid position of issuance of Show Cause Notice has discussed above, even after insertion of with new sentence in the provisions of Section 110(2) of the Act. In fact, after amendment not only the Show Cause Notice is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce. However, the consignment was not cleared at the instance of DRI which was subsequently seized on 06/01/2018, 12/01/2018, 18/04/2018 and 20/04/2018, under Section 110 of the Customs Act, for pending further investigation. The investigation could not be completed within 6 months from the date of seizure i.e. 06/01/2018 and the Commissioner of Customs(Port) Kolkata, on account of being as Adjudicating Authority extended the time of issuance of Show Cause Notice by six months on the request of DRI, without affording the personal hearing to the appellant on the ground of amended provisions to Section 110(2) of the Customs Act 1962. 4. On behalf of the appellant Ld. Advocate would submit that the extension of Show Cause Notice by invoking the amended provision of sub-Section(2) of Section 110 of Customs Act, would not be applicable in their case as the amendment has been brought with effect from March, 29, 2018. The seizures in these cases were affected on 18/01/2016, 06/01/2018, 12/01/2018, 18/04/2018 and 20/04/2018, and hence the amended provision is not applicable under the present proceedings for the seizure made prior to amendment of Section 110(2) of the Act. The amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also prayed that Ld. Respondent Commissioner also failed to appreciate that the dominion of the said goods imported by the appellant was passed to the Customs Authority with effect from October 13, 2017, and detention of the said goods tantamount to seizure, thereof, hence it was incumbent upon the Customs Authority to issue the Show Cause Notice under Section 124 of the Customs Act, within six months on and from October 13, 2016, or get the said period of six months extended by further period of another six months before expiry thereof, which has not been done in this case. 8. Ld. Advocate further submits that the certain legal proposition that owner of the goods has right of restoration of their seized goods in the event of no Show Cause Notice being issued within six months from the date of seizure of the goods which has obviously been not done in this case. Considering the detention of goods with effect from 13/10/2017. 9. Ld. Advocate hence prayed that goods should be returned to the appellant in the aforesaid circumstances in terms of provisions of Section 110(2) of the Customs Act. 10. Ld. AR on behalf of the Revenue supports the impugned order. Further he says that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the notice referred to in clause (a) and the representation referred to in clause (b) may at the request of the person concerned be oral. After amendment Section 110(2) of the Customs Act reads as follows; 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 be person from whose possession they were seized: Provided that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform the person from whom such goods were seized before the expiry of the period of specified: Provided Further that where any order for provisional release of the seized goods has been passed under Section 110A, the specific period of six months shall not apply. 13. It is seen from the amendment that has been substituted with word. It is the contention of the Revenue that by this change the need for issuance of Show Cause Notice is not required. The only thing which is required to be done under the amended provision is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 19, 1964 and no further extension having been granted by that date, he became entitled to restoration-of the said watches and the second order extending the period by two months more granted a month after the expiry of the first extended period would be of no avail to the Customs authorities. This contention too was rejected on the ground that where there is a prescribed time for doing a thing but an express power is given to an authority to extend that time, such power can be exercised even after the prescribed time has expired unless there is an express provision prohibiting to, do so. There was no such provision. The learned Single Judge also held that there was no need to give to the respondent any notice of the applications for extension, the only requirement being that a sufficient cause had to be shown to the satisfaction of the Collector. The learned Judge also rejected a third contention by the respondent that in the absence of any information with the Customs officers as regards the watches save that they were of foreign manufacture, they could not have 'entertained any reasonable belief that their importation was contrary to or in violation of any statutory provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hears the parties affected. Even after the supplementary affidavits were filed in this case, it is extremely doubtful whether a sufficient cause has been shown. According to the- Division Bench, even if the Collector's function, tinder the proviso were to be treated as an administrative, function, his authority being to determine the question affecting the, rights of the citizen, there was an implied duty to act judicially. On this reasoning, the Division Bench held that in any event the second order of extension was bad. It also found that the show cause notice issued under Section 124(a) was vague, gave no opportunity to the respondent to explain the allegations contained therein, and therefore, was bad, with the result that the appellant would be required to give a fresh notice. For the reasons above stated the Division Bench reversed the judgment of the Single Judge and allowed the writ petition. The correctness of this judgment is the subject matter of this appeal. 15. Thereafter this issue reached the Supreme Court and Supreme Court upheld the order of Division Bench of the High Court wherein it was held that as under; 17.The other decisions, which takes a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any rate, one requiring a judicial approach, Consequently, an opportunity of being heard ought to have been given to the respondent before orders for extension were made. The High Court, consequently, was justified in ordering restoration of the watches in question to the respondent. 16. Similar issue has been held in case of I J Rao Assistant Collector of Customs vs Bibhuti Bhushan Bagh [1989 (42) ELT 338 (SC)]. Wherein after examining the various case laws it has been held as under; 13 . There is no doubt that the words on sufficient cause being shown in the proviso to Section 110(2) of the Act indicates that the Collector of Customs must apply his mind to the point whether a case for extending the period of six months is made out. What is envisaged is an objective consideration of the case and a decision to be rendered after considering the material placed before him to justify the request for extension. The Customs Officer concerned who seeks the extension must show good reason for seeking the extension, and in this behalf he would probably want to establish that the investigation is not complete and it cannot yet be said whether a final order confiscating the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or private need, and that any delay in restoration would cause material damage or injury or hardship either by reason of some circumstance special to the person or of market conditions or of any particular quality of requirement for the preservation of the goods. But it will not be open to him to question whether the stage of the investigation, and the need for further investigation, call for an extension of time. It is impossible to conceive that a person from whose possession the goods have been seized with a view to confiscation should be entitled to know and to monitor, how the investigation against him in proceeding, the material collected against him at that stage, and what is the utility of pursuing the investigation further. These are matters of a confidential nature, knowledge of which such person is entitled to only upon the investigation being completed and a decision being taken to issue notice to show cause why the goods should not be confiscated. There can be no right in any person to be informed midway; during an investigation, of the material collected in the case against him. Consequently, while notice may be necessary to such person to show why time should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of goods, and having regard to consideration of the damage to economic policy underlying the formulation of import and export planning, it seems necessary to reconcile the need to afford an opportunity to the person effected with the larger considerations of public interest 15 . Our attention has been drawn to Ganeshmul Channilal Gandhi and Another v. Collector of Central Excise and Assistant Collector, Bangalore - A.I.R 1968 Mysore 89 where the High Court of Mysore has held that no notice is necessary to the person from whose possession the goods are seized when the Collector proceeds to consider whether the original period of six months should be extended. Reliance has also been placed on Sheikh Mohammed Sayeed v. Assistant Collector of Customs for Preventive and Others - A.I.R. 1970 Calcutta 134 which proceeds on the view that the Collector has to satisfy himself only subjectively on the point whether extension is called for. In Karsandas Pepatlal Dhineja Others v. Union of India and Another - 1981 E.L.T. 268 the High Court defined the implications of the use of the words on sufficient cause being shown in a statutory proceeding. None of these cases convince u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice irrespective of whether the proceeding is judicial, quasi-judicial or administrative in nature. Earlier in point of time in The Asstt. Collector of Customs and Others v. Charan Das Malhotra [1971 (1) SCC 697 = 1983 (13) E.L.T. 1477 (S.C.)], this Court observed that the Collector was not expected to propose the extension mechanically or as a matter of routine but only on being satisfied that facts exist which indicate that the investigation could not be completed for bona fide reasons within the time provided in Section 110(2) and that, therefore, extension of the period has become necessary. The Court also emphasized that the Collector cannot extend the time unless he is satisfied on facts placed before him that there is sufficient cause necessitating extension, in which case the burden of proof would clearly lie on the Customs authorities applying for extension to show that such extension was necessary. It was also pointed out that on the expiry of the period of six months, from the date of seizure, the owner of the goods would be entitled as of right to restoration of the seized goods, and when right could not be defeated without notice to him that an extension was proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the order is passed unless the statute under which the order is passed specifically excludes such opportunity. Even where the statute specifically excludes the opportunity of being heard, Courts would be entitled to consider the legality and constitutional validity of such a provision but, in any event, where the statute does not exclude their observance, the authority passing the order affecting civil rights of a person must follow the principles of natural justice which include giving of a reasonable opportunity of being heard to the person affected. It is in this light that we must interpret the provisions of Section 110(2) read with Section 124 of the Act. Where an importer of goods transfers the goods, may be in violation of a condition of import, the transferee may not necessarily know that the goods are being transferred in breach of any condition prohibiting the transfer. The transferee, who has bona fidely purchased the imported goods for consideration without notice of any breach of condition of import or violation of any prohibition, may be in possession of the goods. Though Section 110 confers a power on the customs authorities to seize the goods from possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(1) of the Act is illegal. The reliance was placed on the Charan Das malhotra s case(supra). 11 . Wherein the Supreme Court held that on failure to issue show cause notice within 6 months, a civil right accrued to the respondent to have possession of the goods and since the order granting extension sought to defeat the right, the order for extension of time could not be passed without giving an opportunity of being heard to the respondent from whose custody thee goods were seized. Indeed as the Supreme Court has held that a notice is required to be given to the person from whose custody the goods were seized even for granting extension of time to issue show cause notice, obviously a notice is required to be given to the person from whose custody the goods are seized before passing an order of confiscation. 12 . As in the present case, the notice has not been given to the petitioner within the statutory period of 6 months, the continued seizure of the machine is bad in law and is hereby quashed. Rule is accordingly made absolute in terms of prayer clause (a). We make it clear that this order would not prevent the respondents from taking any other action against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment is as identical but for on sufficient cause being shown has been replaced with reasons to be recorded in writing extends such period , for a period not exceeding six months and inform the person from whom such goods were seized before expiry of the said period. Careful analysis of the provision makes it clear that the right of issuance of the Show Cause Notice for the extension of the period of six months as prescribed under said sub-Section of Section 110(1) remains same from which the emanate right of Show Cause Notice to the affected party in furtherance of Principle of Natural Justice as his rights are being prejudicially affected. The amendment will not obliterate the aforesaid position of issuance of Show Cause Notice has discussed above, even after insertion of with new sentence in the provisions of Section 110(2) of the Act. In fact, we are of the view that after amendment not only the Show Cause Notice is required to be issued by the Adjudicating Authority, but he has also to give a reasoned order after hearing the Investigation Officer and also taking view of the affected party from whom seizure has been made as his personal right is being deprived of which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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