TMI Blog1982 (6) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... llery from various places, for the purpose of repairing and/or sale on commission basis. It has also been categorically stated by the petitioners that the parties, from whom they used to receive materials for sale and on the basis as mentioned above, do not like to disclose their names prior to completion of final transaction, for avoiding disclosure or exposure of their financial position and as such, some of the names of those parties, were not entered into the books of accounts of the said Firms and such transactions were carried on with mutual trust and confidence. 2. It has been stated that on or about 2nd/3rd August, 1966, officers attached to the Preventive and Intelligence Unit of the Customs Department, conducted a search, which was claimed by the petitioners to be a roving one, from 4 p. m. on 2nd August, 1966 to 6 p.m. on the next day, at the residence of the petitioners, as well as their business place as mentioned above. The petitioners have alleged further that those officers did not find anything at their residence for seizure and in course of search at the business place as mentioned above and they seized several jewelleries fitted with precious stones, which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain informed by the Superintendent concerned, that the Collector of Customs, West Bengal had again extended the time of issue show cause notice by three months from 3rd May, 1967 i.e. time was extended to 3rd August, 1967. This extension, was also claimed by the petitioners, to have been made again, behind their back and in contravention of the provisions of Section 110(2) of the said Act. The Customs Authorities, who are Respondents herein, however on or about 29th July, 1967, issued a show cause notice to the petitioners, asking them to show-cause as to why penalty should not be imposed upon them and why, the goods and the currency notes as mentioned above and which were seized, should not be confiscated under the provisions of the said Act. The petitioners have stated that they duly replied to the said show-cause on 5th March, 1968, claiming the action as taken, to be improper, irregular, unauthorised, void, apart from being without jurisdiction and claimed that they be exonerated from the charges forthwith. It has also been stated by the petitioners that they had asked for opportunities to cross-examine the seizing and investigating officers and such prayer was refused, by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in Annexure `I' the Central Board of Excise and Customs, issued a show cause notice under section 128(2) of the said Act, calling upon the petitioners to show cause why the Collector's order in respect of the goods which were released, should not be modified and personal penalities should not be enhanced to Rs. 50,000/- as those diamonds and jewelleries collectively valued at Rs. 54,630/-, were not available for confiscation. Section 128 of the said Act makes provisions for appeals and sub-section (2) thereunder lays down that the Appellate Authority may, after giving an opportunity to the appellant to be heard, if he so desired and making such further enquiry as may be necessary, pass such order as it thinks fit, confirming, modifying or annulling the decision or order appealed against, provided that an order enhancing any penalty or fine in lieu of confiscation of goods of greater value shall not be passed (a) by an Appellate Collector of Customs; (b) by the Board, unless the appellant has been given reasonable opportunity of showing cause against the proposed order and with the further proviso that where the Appellate Authority is of opinion that any duty of customs has been s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... release of the petitioners on bail by the learned Chief Metropolitan Magistrate, Calcutta. 9. It was also stated by the said deponent that the precious stones were duly appraised by the competent authority and then, further enquiries were initiated in respect of the seized goods and currency notes. It has also been stated that to complete the enquiry, much time was lost and such the Collector concerned had to extend the time twice, for issuance of the show-cause notice. The deponent has stated that after two extensions, on 29th July, 1967, show cause notices were issued and to which the petitioners duly replied. That apart, it has been stated that petitioners were given personal hearing on their exceptions as taken. The deponent has further stated that the order as made by the Collector of Customs, was under section 111(d) of the said Act. Section 111 deals with confiscation of improperly imported goods and sub-clause (d) thereunder, lays down 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 bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 22nd May, 1976 and was filed, through the petitioner No. 1. The material allegations in the affidavit-in-opposition as mentioned above, have been denied and the deponent has stated that there was no licit importation of any foreign goods of articles, for the contravention whereof, the poceedings as sought to be initiated, could be maintained against the petitioners. In any event, it was claimed that the authorities concerned were wrong and they had acted illegally and with material irregularity, in initiating the concerned proceedings and it was further claimed that since such proceedings was absolutely without jurisdiction and unauthorised, the writ petition at the stage when the same was moved, was maintainable. 13. Mr. Ghosh, appearing in support of the Rule, sought to impeach the impugned action, firstly on the ground of irregularity of extension of time as the same was done without notice on both the occasions as mentioned above. He, secondly contended that the impugned search and the ultimate seizure of the currency notes at least, was bad, as there was no authorisation for the same and thirdly, it was claimed that the entire action was bad, irregular and unauthoris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 128(2) and the second one at the stage of Clause (b) to the first proviso to the said Section 128(2). Mr. Ghosh claimed further that the hearing as contemplated under Section 128(2) should be, as mentioned above, in respect of the scope of the appeal and not outside the same viz. 10 items as involved in the concerned appeal in this case and as since the initiation as made, related to items outside the scope of the appeal or in respect of the goods as released, so, such initiation was bad, void and without jurisdiction. Mr. Ghosh of course claimed that under the proviso as mentioned above, proceedings for enhancing the penalty or fine in lieu of confiscation or confiscating goods could be made. But he claimed that such steps should also have been taken after opportunities as mentioned in clause (b) to the first proviso to section 128(2), and as no such opportunity was given, the action as taken, was also bad, improper and unauthorised. In view of the above and on the basis of his submissions, that no opportunity was afforded at any stage, Mr. Ghosh claimed the initiation, as made, to be void. 15. In support of his submissions on the illegality and irregularity of the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he object of notice under section 124, is to give the person affected, an opportunity to prove legal importation and not to disprove a conclusion already arrived at by the authorities. The next case on which reliance was placed on behalf of the petitioners, was the one which was made in appeal by the Supreme Court against the above mentioned Calcutta Judgment and in the case of The Assistant Collector of Customs and Superintendent, Preventive Service Customs, Calcutta Ors. v. Charan Das Malhotra, A.I.R. 1972 S.C. 689, wherein it has been observed that the power under the Proviso to section 110(2) is quasi-judicial and at any rate one requiring a judicial approach. While the power of seizure under sub-section (l) of Section l 10 can be exercised on basis of reasonable belief on part of the concerned officer the power of extending the period to give notice under Section 124(a) is to be exercised only on "sufficient cause being shown." This expression envisages at least some sort of inquiry on facts placed before the authority and determination by him of those facts. Extension order is not to be passed mechanically. The power under sub-section (1) cannot be equated with the power un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that because of the pendency of the concerned appeal, no interference was either possible or permissible as required. In that case, it has been laid down that when there is an alternative remedy, the existence of such remedy is not an absolute bar to the entertainment of an application under Article 226, but for difference in the case when the party moving the court under Article 226 has already availed himself of the alternative remedy and whether or not he is entitled to any relief in that claim has not yet been decided. The case under consideration was under the provisions of Sea Customs Act and it has also been observed that, where a party has preferred an appeal under Section 188, Sea Customs Act, against the order of the Collector of Customs imposing penalty under the Sea Customs Act and that appeal is pending, the party cannot be allowed to move the High Court under Article 226 of the Constitution of India. While on the question of interference by this court in the facts of this case, Mr. Roy Chowdhury, further referred to the determinations in the case of Sheo Nath Singh v. Assistant Commissioner of Income-Tax (Central Range), Calcutta Ors., A.I. R. 1967 Cal. 382, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative remedy, and as such also, no interference, as indicated above, should be made in this jurisdiction now. Mr. Roy Chowdhury further claimed that the goods in question could be lawfully and in fact they were so and duly confiscated under the provisions of Sections 110 and 111(d) of the said Act. He also referred to the determinations in the case of M/s. Mohanlal Devandabhai Choksey Ors. v. M.P. Mondker Ors. (Supra). Apart from the initial findings in that case, the particulars, whereof have been mentioned hereinbefore, it has also been observed that object underlying Section 110 is not initiation of proceedings for confiscation of goods or for imposition of personal penalty, but is to indicate, what will happen if such initiation has not taken place within the time prescribed by the section itself. The consequences of non-initiation of proceedings within the prescribed time, are that the goods shall be returned to the person from whose possession they were seized. All the provisions of Chapter-XIII are steps to facilitate investigation machinery and failure to issue show cause under Cl. (a) and section 124, within the prescribed time, will only result in an obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings under Sections 130 and 131 and not in respect of proceedings under Section 128 of the said Act. He further claimed that the pendency of the concerned appeal, automatically attracted the provisions of Section 128(2) of the said Act. 18. On the question of maintainability of this proceedings and his submissions as mentioned hereinbefore, Mr. Roy Chowdhury placed reliance on the determinations in the case of Geep Flash Light Industries Ltd. v. Union of India Ors., A.I.R. 1977 S.C. 456, wherein it has been observed that a prayer against prayers of Writ or Certiorari and Mandamus were misconceived on the facts of this case as there was no order either judicial/quasi-judicial which could attract Certiorari. No Mandamus could go because there was nothing which were required to be done or …… under the Act. The issue of the notice required the parties to represent their case. There was no score for Mandamus to do any duty or act under the statute. A Writ or Prohibition could not be issued for the obvious reasons that the Central Government had jurisdiction to revise. The above determinations were made in a case, where the question arose, whether a notice under Section 131 (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrao Patra v. Union of India Others, 1977 (2) C.L J. 266, since there were no due and appropriate compliance with the provisions of or under Sections 110 and 124 of the said Act, the petitioners were and still are entitled to return of the goods as seized. The observations in the case as mentioned above were to the following effect :- 21. Section 110(2) of the Customs Act has been incorporated in the 1962 Act. No such provision was there in the Old Sea Customs Act of 1878. Upon a reasonable belief that certain goods are liable to confiscation, the Customs officer is empowered to seize such goods from any person. The power of seizure founded on the mere reasonable belief is however an extraordinary power. Six months time has been provided to complete the enquiry and to collect materials in support of the officer's reasonable belief that the seized goods are liable to confiscation. If within the said period, prima facie evidence for confiscation is not available, and at the same time, if the officer concerned thinks that further investigation into the matter is necessary, the Collector of Customs, an officer superior in rank, under proviso to Section 110(2), may extend a further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice of confiscation of the goods and the retention of the seized goods. 25. In the instant case, it appears that no notice under Section 124 of the Act was issued within six months from the date when the goods were siezed. The Collector of Customs also did not extend the six months time after affording the owner of the goods a reasonable opportunity of being heard. Undoubtedly where seized goods are be retained, the authority concerned must take recourse to the two conditions mentioned in Section 110 of the Act. The two conditions are: (a) when notice under Section 124 is given within the period of six months from the date of seizure of the goods; (b) when the Collector after hearing the owner of the goods seized extends the said period of six months. Apart from these two conditions, there is no other provisions in the Act which empowers the Customs to retain the seized goods. The provisions of Section 110 (2) are mandatory-the goods "shall" be returned to the person from whose possession they were seized. Where under the law the goods "shall be returned", such goods retained unlawfully, cannot be confiscated under the provisions of the Act. The goods which ought to have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the decision or order as mentioned in Section 188 of that Act, would mean a real and not purported determinations by taking into considerations which the officers had no right to do. On a reference to such determinations, it was also contended on behalf of the petitioners that since, because of the irregularity in the initiation of the proceeding in the instant case, the officer concerned had no jurisdiction or authority to continue with the proceedings, so the petitioners had the right to move this Court, even without availing of the alternative remedy in the statute or even after purporting the......of the same. 27. In terms of the determinations in the case of The Assisstant Collector of Customs and Superintendent, Preventive Service Customs, Calcutta others v. Charan Das Malhotra (Supra), which has upheld the views of this Court in the case of Charandas Malhotra v. Assistant Collector of Customs etc. Others (supra), there is no doubt that under the proviso to section 110(2), time can be extended for as many times as is deemed to be necessary, provided that in such case, sufficient and necessary cause for such extension was shown and established and further overall per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t succeed, then the petitioner would be entitled to the return of the goods. The dates relevant in this ease are 2nd/3rd August, 1966, when the search was conducted and the seizure was made. Then, after the letter dated 8th October, 1965 from the petitioner, on 28th January, 1967, first extension for three months from 3rd February, 1967 was obtained and as such, according to the petitioner's such extension, even though the same was obtained without opportunities to them, was to expire on 3rd May, 1967. Then came the second extension to 3rd August, 1967, which was also, claimed by the petitioner to have obtained behind their back and without any notice or opportunities to them. The petitioners were asked to show cause, on the question of imposition of penalty on 29th July, 1967 and they had filed their reply to the same on 5th January, 1968, whereupon the adjudication was commenced on 2nd February, 1968 and after personal hearing, on 18th August, 1969, the order of penalty and confiscation of 10 items as indicated hereinbefore was passed. That order was received by the petitioners on 17th June, 1969. The appeal by the petitioners was preferred on 2nd August, 1969 and according to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning appropriate and necessary reliefs. The availability of appropriate remedy, as indicated hereinbefore, under Article 226 of the Constitution of India, would be available in appropriate cases and under special circumstances. 31. Section 130 of the said Act has replaced section 180A of the Sea Customs Act, 1878, with an amendment which categorically provides that the time limit laid down in Section 28 of the said Act, for issuing notice of short levy, etc. will apply even where an order claiming short levy is made in revision. Section 130 confers power of revision on the Board and postulates that the Board may of its own motion or on the application of the person aggrieved, call for and examine the records of any proceedings in which a customs officer has made any decision or passed an order under the said Act (not being an order passed in Appeal under Section 128 of the said Act), for the purpose of satisfying itself to the legality, propriety or otherwise of any such decision or order and may pass such order thereon, as he thinks fit. In terms of the first proviso to the said section, no order, enhancing a penalty or fine in lieu of confiscation or confiscation of goods of gr ..... 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