TMI Blog1975 (3) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant facts of the case. On December 15, 1967, an import licence was issued in favour of Hindustan Motors Ltd, for importing primary nickel. Items Nos. 1 and 2 of this licence are (1) 'Country from which consigned' and (2) 'Country of origin'. Against the aforesaid items there are blank spaces and thereafter the words 'All countries excluding Union of South Africa and South West Africa' have been printed. In the first blank space against 'Country from which consigned' the following countries have been type-written "USSR, Poland, GDR, Czechoslovakia, Yugoslavia, Rumania, Hungary, Bulgaria". In the blank space against `Country of origin' the word `do' has been typed in. From a plain reading of the licence, therefore, there can be no doubt that the goods are to be consigned from one of the countries the names whereof have been typed out and the goods must have as their origin one of the same countries. 2. In March, 1969, 21 drums of primary nickel were shipped from Bulgaria against orders placed by Hindustan Motors Ltd. They also opened the letter of credit in terms of the licence. The goods were cleared by them from the Bonded Warehouse after full payment of customs duty from tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice by a period of six months from May 6, 1970 in the matter of seizure of 9 drums of nickel as aforesaid. This order extending the time was challenged in the application before Sabyasachi Mukharji, J. On May 8, 1970 P.K. Banerjee J. discharged the Civil Rule No. 7477(W) of 1969, but his Lordship stayed the operation of the order for a period of six weeks and the ad-interim order of injunction previously made was also continued. Extensions of the said order were subsequently granted till July 2, 1970. On May 13, 1970 Hindustan Motors Ltd., wrote to the Collector of Customs and Central Excise for release of the seized consignment of primary nickel on execution of bond. In July, 1970 an appeal was prepared against the order of P.K. Banerjee J. dated May 8, 1970 in Civil Rule No. 7477 (W) of 1969. The appeal was marked as FMA 280 of 1970. On July 9, 1970 the Deputy Director, Enforcement Directorate, wrote to the Assistant Collector of Customs informing him of the dismissal of the writ petition in Civil Rule No. 7477(W) of 1969 and of the appeal pending in this court, as well as of the interim order of injunction that was passed. The Deputy Director suggested that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July 13, 1972. By this judgment Sabyasachi Mukharji, J. has (1) upheld the order of seizure dated November 7, 1969; (2) set aside the order dated May 4, 1970 and directed the respondents to return the goods seized and to withdraw the prohibitory order; (3) upheld the show cause notice dated October 28, 1970 as being not without jurisdiction. The respondents i.e., the Customs Authorities were given liberty to proceed with the show cause notice and the petitioners it was stated, would be entitled to take any valid defence in respect of the same. It was stated further that the respondents would decide the show cause notice in accordance with law. Writs in the nature of Mandamus and Certiorari were issued accordingly. The Rule was made absolute in part to the extent indicated above. Appeal No. 47 of 1973 by the Collector of Customs and Central Excise, West Bengal and others is directed against the order of Sabyasachi Mukharji, J. setting aside the order of the Collector of Customs and Central Excise dated May 4, 1970 extending the time for issue of the show cause notice by a period of six months. Appeal No. 72 of 1973 by Hindustan Motors Ltd., and Jhunjhunwala is directed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial approach. Consequently, says the Supreme Court, an opportunity of being heard ought to have been given to the respondent before orders for extension were made. 5. If we apply this decision of the Supreme Court to the facts of this case there can be no doubt that the ex parte order of May 4, 1970 was invalid; but learned counsel for the Customs Authorities relied on a Division Bench judgment of this court in Appeal No. 122 of 1969 to which I was a party. The Division Bench held that under certain circumstances an ex parte order could be made but in view of the Supreme Court's judgment referred to above it is not necessary to go into this question. The next argument of Mr. G.P. Kar, learned counsel for the Customs Authorities is that Hindustan Motors Ltd. and the other petitioner have waived their right to contend that the notice under Section 110(2) was not served. In support of this contention Mr. Kar says that during the pendency of the present appeal his clients made an application for stay of the order of Sabyasachi Mukharji J. setting aside the ex parte order of May 4, 1970. An order for stay was passed ex parte on February 19, 1973. On April 4, 1973 the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk. 8. The third point decided by the Supreme Court is not relevant for our purposes. But Mr. G.P. Kar strongly relies on the first two points mentioned above and urges that on the facts of the present appeal also there has been a waiver by reason of the order that the respondents herein obtained for the release of the goods. The second case of the Supreme Court referred to above does not appear to us to be relevant at all. We shall refer to this case in another connection in this judgment. We do not agree with Mr. Kar that the principles which the Supreme Court enunciated in Lokenath Tolaram's case (AIR 1974 SC 150) can be applied to the facts of this case. Here Mr. Justice Sabyasachi Mukharji passed an order setting aside the order of extension granted on the 4th May, 1970, and directing the release of the goods. The Customs Authorities felt aggrieved by this order. They came up in appeal. In the appeal they asked for an order that the operation of the Trial Court's order be stayed. The respondents resisted this application for stay and insisted on the release of the goods. The Appeal Court put the respondents on terms. The effect of the Appeal Court's order is that the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. It is not, therefore, a prohibitory order in terms of the proviso to Section 110(1). There is no dispute that when goods have been seized a notice to show cause under Section 124(a) is to be served within six months provided that the period may be extended on sufficient cause being shown. 10. The last argument of Mr. G.P. Kar is that by reason of the order of injunction against the Enforcement Directorate which we have discussed above the time for issuing the Show Cause Notice did not run at all. Mr. Kar relies on the Supreme Court judgment in the Director of Inspection of Income-tax (Investigation) New Delhi v. Pooran Mall Sons, A.I.R. 1975 SC 67. In that case the Supreme Court has said that it is a well established principle of judicial procedure that where any proceedings are stayed for a period by an order of Court or by injunction issued by any Court that period should be excluded in computing any period of limitation laid down by law. There can be no question that when an order of injunction is passed against one of the parties to the litigation, the aforesaid principle would apply. But in the instant case no order of injunction was ever passed against the Customs au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara in Hooghly District and detected a consignment of 9 drums of primary nickel all of foreign or U.S.A. origin and weighing about 6210 kgs. valued at Rs. 2,16,428 (approximately). 3. That when I asked the factory authorities to produce the documents as to the actual source of supply of the goods and lawful importation of the consignment of primary nickel they could not produce any. Thus the fact of this prior information and my detection of the goods admittedly of foreign or U.S.A. origin, the illicit importation of which could not be established by the Factory Authorities, were sufficient reasons for me to believe that goods were illegally imported and were liable to confiscation under the Customs Act, 1962. 4. That upon forming this belief I seized the said goods on that date namely the 7th November, 1969 under Section 110 of the Customs Act, 1962 and served an order on M/s. Hindustan Motors Ltd. not to remove, part with or otherwise deal with the said goods except with my permission." The order of seizure is at page 21 of the paper book which also says that the officer concerned had reason to believe that the goods specified in the schedule were liable to confiscation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of this Court, it has not been taken before us. But the appellant's counsel made it clear that he was not making any concessions. We accept the view of Mr. Justice Sabyasachi Mukharji that if the seizure was good, a notice to show cause could be given. 15. The next argument is that a distinction should be maintained between goods imported in breach of the conditions of a Licence and those imported without any licence. If goods are imported in breach of the conditions of licence, the Customs Authorities have no jurisdiction to adjudicate on the same, vide, A.I.R. 1971 SC 170 (Additional Collector of Customs, Calcutta Others v. M/s. Best Co.) affirming a judgment of a Division Bench of this Court reported in AIR 1965 Calcutta p. 478. If, however, the goods have been imported without any licence, the relevant provisions of the Customs Act would be attracted. They would be attracted by reason of the provisions of the Imports and Exports (Control) Act 1947, the Imports (Control) Order, 1955 read with the Customs Act of 1962. Section 3(1)(a) of the Imports and Exports (Control) Act, 1947 provides as follows :- "3. Powers to prohibit or restrict imports and exports. — (1) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to set out the relevant portions of this notice. These are as follows :- "It appears that the goods mentioned in the Schedule below have been imported into India ....... without a valid import licence, as required under Notification No. 17/55, dated 7-12-1955, issued under Section 3(1) of the Imports and Exports (Control) Act, 1947, for the following reasons : "(i) That an information was received from a reliable source to the effect that some of the conditions of the Import Licence No. P/RM/ 2161212 dated 15-12-1967 under which a consignment of 21 drums of primary nickel imported had not been complied with by M/s. Hindustan Motors Ltd. Uttarpara, Hooghly ....." "(ii) It appears that the Import Licence No. P/RM/2161212 dated 15-12-1967 was not valid to cover the importation of 21 drums of primary nickel valued at Rs. 5 lakhs which were from U.S.A. and the seized goods, therefore, appeared to be liable to confiscation under Section 111(d) of the Customs Act, 1962 and would also appear liable for personal penalty under Section 112 of the Customs Act, 1962." 18. Learned Counsel for the appellants has submitted to us that it clear from the terms of the show cause notice that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation at the Port of Calcutta the subject consignment was warehoused by them in their Bond at Uttarpara Factory under W.R. Bill of Entry No. 1, dated 1-4-1969 and that the goods were ultimately cleared for home consumption in four instalments as under : ***** In paragraph 11 of the petition at page 6 of the paper book it is stated inter alia that : "The Customs authorities after satisfying themselves that everything was in order allowed the said goods which were 21 drums in all to be cleared for home consumption in 4 instalments on payment of customs duty." In paragraph 14 of the affidavit of Kamakshya Ranjan Ghose, Assistant Collector of Customs, West Bengal, affirmed on the 15th September, 1911, it is stated that the goods were allowed to be cleared through mistake and ignorance of facts which were subsequently discovered after clearance. Counsel for the appellants has strongly urged that the goods were allowed to be cleared for home consumption after the proper officer was satisfied that those were not prohibited goods. If the order permitting clearance under Section 47 had been revised under Section 130 the matter might have been different. But so long as that order s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an order under Section 47 the notice to show cause is bad. Since this point is being taken for the first time in appeal without mentioning the same either in the grounds of the petition or in the grounds of appeal we are of opinion that the appellants should not be allowed to take it at this stage. But assuming that the argument can be entertained, we are unable to sustain it. Section 89 of the Sea Customs Act, 1878 provides as follows: "89. Clearance for home consumption. - When the owner of any goods entered for home consumption, and (if such goods be liable to duty) assessed under Section 87, has paid the import duty (if any) assessed on such goods and any charges payable under this Act in respect of the same the Customs Officer may make an order clearing the same; and such order shall be sufficient authority for the removal of such goods by the owner." This section came up for consideration in the case of Lakshminarayan Ramniwas v. Collector of Customs and Others reported in AIR 1961 Cal. 616 before D.N. Sinha J. as his Lordship then was. The learned Judge held that it was not the scheme of the Sea Customs Act that a personal penalty could not be imposed under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
