9911796707
TMI Blog1991 (8) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... officer from an exporter of Singapore by name K. Ramanlal & Co., Private Limited. Accordingly, it is said that 500 metric tonnes of stainless steel scrap, were agreed to be supplied by K. Ramanlal & Co. Private , Limited of Singapore, who offered to ship 120 metric tonnes out of which, 90 metric tonnes would be coil-ends and the remaining 30 metric tonnes would be general scrap and shipped the said goods under its invoice dated 14-2-1991 by six containers from Singapore to Madras. The said goods arrived at the Madras port per Vessel WASPADA VOY 9012, covered by a Bill of Lading dated 14-2-1991. On landing of the said goods, the petitioner/appellant company filed the Bill of Entry for home consumption for the clearance of the goods. The said goods were thereafter examined by the officers of the respondents as per the normal practice of 20% check, who, after necessary examination, assessed the goods for duty by an order .under Section 47 of the Customs Act, 1962 (hereinafter referred to as 'the Act').After the order, four out of the six containers were cleared from the port premises and were stored at a godown belonging to one Gemini Warehousing. It was at this stage that respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake or an omission due to circumstances beyond his control made by the proper Officer. The argument that such mistakes can be Corrected only by resorting to Section 129-D of the Customs Act does not appeal to me, because we are only concerned with seizure of goods. The question is whether the proper officer has jurisdiction to seize the goods. In most of these revenue matters relating to Customs and Central Excise, once the goods go out of the hands of the officers then the chances of recovery are either remote or nil. It is in this view of the matter, I am upholding the seizure of the goods in the instant case. The respondents are permitted to initiate action in accordance with law, but I direct that such action should be expedited, because the goods had once been cleared under Section 47 of the Customs Act and the petitioner cannot wait for eternity to have custody of their goods..." 2. Before we deal with the contentions that have been raised before us on behalf of the petitioner/appellant company, since detailed arguments have been advanced as to the meaning, extent and reach of the provisions in Sections 24, 47,110 and 111 of the Act, we propose to extract them in full: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared; or (b) taking in the presence of the Magistrate, photographs of such goods, and certifying such photographs as true; or (c) allowing to draw representative samples of such goods, in the presence of the Magistrate, and certifying the correctness of any list of samples so drawn. (1-C) Where an application is made under sub-section (1-B), the Magistrate shall, as soon as may be, allow the application. (2) 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 the person from whose possession they were seized: Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Collector of Customs for a period not exceeding six months. (3) The proper officer may seize any documents or things which, in his opinion, will be useful for, or relevant to, any proceeding under this Act. (4) The person from whose custody any documents are seized under subsection (3) shall be entitled to make copies thereof or take extracts therefrom in the presence of an officer of customs. 111. Confiscation of impr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er particular with the entry made under this Act or in the case of baggage with the declaration made under Section 77 in respect thereof; (n) any dutiable or prohibited goods transitted with or without transhipment or attempted to be so transitted in contravention of the provisions of Chapter VIII; (o) any goods exempted, subject to any condition, from duty or any prohibition m respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer; (p) any notified goods in relation to which any provisions of Chapter IV-A or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened." It may be relevant to notice that with regard to confiscation of improperly imported goods, besides confiscation of improperly imported goods as defined in Section 111 of the Act, there are provisions for penalty for improper importation of goods, etc., as prescribed under Section 112 of the Act, including a provision for penalty for contravention, etc., not expressly mentioned, as provided under Sec. 117 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid the import duty, if any, as well as any other charges payable under the Act in respect of the same. The language in Section 110 of the Act, however, should not be mistaken to give some sort of an administrative power to the proper officer to seize any goods because the words therein are, "has reason to beliieve that any goods are liable to confiscation under this Act". Unless the goods are liable to confiscation and there is some basis to believe that such goods liable to confiscation under the Act were in the hands of some one or some where, it is obvious that there can be no seizure. Amongst the goods liable for confiscation, as in Section 111 of the Act, are : "any dutiable or prohibited goods required to be mentioned under the regulations in an import manifest or import report which are not so mentioned" and "any dutiable or prohibited goods found concealed in any manner in any package either before or after the unloading thereof. It is not disputed before, us that the goods seized from the custody of the petitioner/appellant are dutiable. It is disclosed in the counter-affidavit: "....Measurement of the sheets clearly described at the beginning of page 5 of Mahazarnama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid disputed goods the appellants-respondents shall comply with the interim order by 4.0 p.m. on 15th December, 1986, unless proceedings are taken under Sec. 129D of the Customs Act before that time and appropriate orders to the contrary are passed therein." We have been informed that faced with the order as above, the Customs officials preferred a revision under Section 129D of the Act forthwith and in fact, the order under Section 47 of the Act was reversed, but when the revisional order was challenged again before the Bombay High Court, it found that the respondents therein had acted in violation of the principles of natural justice in utter haste only to defeat the direction of the Court. Thus, even that attempt of the Customs authorities to get the order under Section 47 of the Act reversed in revision failed and the goods which were cleared as plastic scraps were released as such goods, even though according to the Customs authorities, they were serviceable plastic articles and thus chargeable to duty under a separate head. As the Bombay High Court stated an omnibus rule that once it is found in respect of any goods that it had been released after clearance under Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was rendered on interpretation of Section 89 of the Sea Customs Act which is different from Section 47 of the Customs Act, 1962, in material particulars. So also the Sea Customs Act did not contain any provision of revision similar to Section 130 of the Customs Act. Section 89 of the Sea Customs Act can be noted in this context:" After referring to the objects and reasons of the Customs Bill, 1962, which read : "Clause 47 corresponds to existing Section 89 with an amendment which provides specifically that the officer shall allow clearance of the goods, if he is satisfied that the import of the goods is not prohibited." the Court observed as follows: "Considering Section 47 of the Customs Act in the light of the legislative history, we are clear that the section attaches finality to the satisfaction of the officer that the goods are not prohibited. The finality cannot be disturbed unless the department successfully shows that there was fraud or deliberate suppression. The respondents have alleged that the containers were painted and thus the original identity of the drums was suppressed by the petitioners. This allegation is on the assumption that stainless steel drums was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the current policy, there was no restriction whatsoever regarding the export of Bone Meal to overseas countries. He thereafter entered into correspondence with overseas buyers for the export of this material and ultimately, entered into a contract with Messrs J.C. Gilbert Ltd., London, for the supply of Bone Meal, subject to the specifications laid down in the contract. Having entered into the contract, he exported the goods and necessary documents were presented to the Customs authorities for clearance. The Assistant Collector of Customs passed the "Let Export" order, meaning that he permitted the export of the goods in question. When the goods were, however, loaded into the steamer, but before the steamer actually sailed, the Assistant Collector of Customs changed his mind and gave a direction to the shipping agents to unload the cargo on the ground that the goods in question were really fertilizers which could not be exported without a licence. Dealing with that matter, the learned Judge held : "....The original order passed by the Assistant Collector of Customs, namely, "Let Export" order dated 8-9-1973, clearly falls within the scope of Section 51 of the Customs Act, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd., Calcutta, also actively helped in the matter of export of the above 11 consignments by issuing bearer cheques in favour of fictitious and non-existing suppliers of bismuth citrate, which goods were subsequently alleged to have been exported to M/s. Modist Corporation, as was evidenced by relative stock book and accounts register. By virtue of the amendment of Foreign Exchange Regulation Act, 1947, it was necessary for the exporter to submit the G.R. 1 Forms declaration true in all material particulars under the provisions of Section 12(1) of the said Act. Since this was not done, the export of the goods were liable to prohibition under the above Notification No. G.S.R. 2641 dated 14-11-1969. By virtue of Section 23A, the prohibition also came under Section 11 of the Customs Act, 1962, and hence the goods were liable to confiscation under Section 113 (d) and (i) of the Customs Act, 1962. The validity of the said notice was challenged in a writ petition. The matter finally came before a Full Bench to consider the following questions : "(I) Whether, by virtue of Section 23A of the Foreign Exchange Regulation Act, 1947, the provisions of Sections 113 and 114 of the Customs Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 113(d), as soon as the goods are attempted to be exported and the attempt to export the goods necessarily precedes the actual export of the goods. Goods become liable to confiscation as soon as the attempt is made. There is no provision in the Act to suggest that this accrued liability is wiped out or extinguished with the exportation of the goods. It may be that after the goods had in fact been exported the liability of the goods to be confiscated may not be enforceable by actual confiscation of the goods. Personal penalty of any person who, in relation to the goods, does or omits to do any act which act or omission renders the goods liable to confiscation under Section 113 or abets the doing or omission of such an act has been provided in Section 114. This provision is attracted as soon as the goods incur the liability to confiscation under Section 113 and such liability, as we have earlier held, arises when the goods are attempted to be exported contrary to any prohibition. It is to be noted that at the time when the goods are sought to be exported they are undoubtedly 'export goods' within the meaning of Section 2(19) of the Customs Act. The liability of personal penalty pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed by a Special Bench of the Customs Tribunal in the case of N. Devidas and Company v. Collector of Customs, Bombay [1987 (29) E.L.T. 247] and by the North Regional Bench of the Customs Tribunal in the case of R.K. Industries v. Collector of Customs and Central Excise [1989 (39) E.L.T. 316]. They have stated in no uncertain words that clearance under Section 47 of the Act cannot oust the jurisdiction of the Customs authorities to confiscate goods under Section 111 of the Act, if later on it is found that the conditions, subject to which the goods were permitted to be imported were not fulfilled or complied with. Consensus of judicial opinion thus is; (1) that an order for clearance of the goods for home consumption is a quasi-judicial order and some sort of finality has to be attached to it. Ordinarily, no action to confiscate such goods which are cleared for home consumption will be taken but there may be exceptions to it, such as those indicated in the Delhi Court judgment in the case of Jain Shudh Vanaspati Ltd. and Others v. Union of India and Others [1982 (10) E.L.T. 43] supra; and (2) that an action to confiscate goods does not depend on clearance of the goods for home con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi Court judgment in the case of Jain Shudh Vanaspati Ltd. and Others v. Union of India and Others [1982 (10) E.L.T. 43], on their peculiar facts, are good for taking notice of the order under Section 47 of the Act and saying accordingly that unless that order was set aside, no proceeding for confiscation should have been taken. It is difficult, however, to accept this as a law, as once there is a clearance under Section 47 and/or Section 51 of the Act is ordered, unless that order is set aside, the proper officer cannot act on his reasonable belief under Sections 110, 111 or 113 of the Act. The Calcutta Full Bench judgment in the case of Euresian Equipments & Chemicals v. Collector of Customs [AIR 1980 Calcutta 188 = 1980 (6) E.L.T. 138 (Cal.)] has, in substance, pronounced that such proper officer's satisfaction for confiscation proceedings shall remain unaffected by the order of the proper officer permitting the clearance of goods under Section 51 of the Act. That view is in consonance with the basis of the belief that good's have been improperly imported or exported and such belief being in relation to the goods and in rem, it will not be correct to read in the orders under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material can also be re-rolled sheet by sheet to thinner gauges and proceeded further in re-rolling Units for utensil or any other non-critical application." It is not disputed before us that stainless steel melting scrap has a specific identification as per Para 26(2)(viii) of the Import and Export Policy AM 90-93 Vol. I (page No. 10). According to this, a stainless steel melting scrap means such waste and scrap of stainless steel with the following dimensions : Length 153 cms. (6") Maximum Width 102 cms. (I") Maximum Thickness 6.5 cms. (1/4") Maximum According to the respondents, and it seems there is nothing in the hands of the petitioner/appellant to dispute this fact, the goods seized were sheets having an assorted thickness in the range 1.05.5 mm. approximately, the width in the range of 1220 to 1275 mm and a few sheets around 1000 mm. and the length varying from approximately 1750 to 5000 mm. The respondents, however, appear to concede in the counter-affidavit that the materials cannot be classified as primes or seconds, but they can also be not classified as melting scrap. They assert, however, in the counter-affidavit that such defectives would mean those varieties ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
