1962 (5) TMI 23 - SC - Customs

Has the Collector jurisdiction to adjudicate whether the goods are liable to be confiscated? Whether goods have been imported contrary to the prohibition or restriction imposed by an order made under Section 3(1) of the Act of 1947? Whether there has been a breach of a condition of a licence and whether, therefore, confiscation should be ordered under Section 167(8) of the Sea Customs Act and further penalty imposed? Held that - Appeal allowed. Order of prohibition restraining the Customs authority from proceeding with the enquiry under Section 167(8) of the Sea Customs Act. The tribunal has no jurisdiction to proceed with the inquiry under Section 167(8) of the Sea Customs Act.

Issues Involved:
1. Jurisdiction of the Collector of Customs to confiscate goods under Section 167(8) of the Sea Customs Act, 1878.
2. Whether a breach of a condition in the import licence constitutes a breach of an order under Section 3 of the Imports and Exports (Control) Act, 1947.
3. Binding nature of High Court decisions on administrative tribunals.
4. Validity of confiscating money representing the sale proceeds of the goods.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the Collector of Customs to Confiscate Goods:
The appellants challenged the jurisdiction of the Collector of Customs to confiscate goods under Section 167(8) of the Sea Customs Act, 1878, arguing that the Collector could only confiscate goods imported in contravention of an order prohibiting or restricting such import. The Collector initiated proceedings for confiscation on the grounds that the appellants had violated a condition of the import licence. The Supreme Court held that the Collector has the jurisdiction to decide whether there has been a breach of an order and whether the goods are liable to confiscation. The Court stated, "He has admittedly jurisdiction to decide whether there has been a breach of an order. It follows that he has jurisdiction to decide what is a breach of an order and, therefore, whether the breach of a condition of a licence is a breach of an order."

2. Breach of a Condition in the Import Licence:
The appellants contended that a breach of a condition of the import licence is not a breach of the order under which the licence was granted. The Supreme Court disagreed, stating, "When, therefore, such a condition is contravened, it is really the order authorising its imposition that is contravened." The Court concluded that the breach of a condition in the licence is tantamount to a breach of the order under Section 3 of the Imports and Exports (Control) Act, 1947, and thus, the goods could be confiscated under Section 167(8) of the Sea Customs Act.

3. Binding Nature of High Court Decisions on Administrative Tribunals:
The appellants argued that the decision of the High Court in a previous case was binding on the Collector of Customs. The Supreme Court upheld this view, stating, "We, therefore, hold that the law declared by the highest court in the State is binding on authorities or tribunals under its superintendence and they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding." The Court emphasized that administrative tribunals must conform to the law laid down by the High Court.

4. Confiscation of Money Representing Sale Proceeds of Goods:
The appellants argued that under the Sea Customs Act, only the goods imported could be confiscated, not the money representing their sale proceeds. The Supreme Court rejected this argument, stating, "The money represents the goods. The order for sale was made by the High Court with the consent of both the parties because the goods were deteriorating. Therefore there can be no doubt that the sale proceeds of the goods which could be confiscated, can also be confiscated."

Conclusion:
The Supreme Court concluded that the Collector of Customs had jurisdiction to decide whether the goods were liable to confiscation and whether the appellants were liable to a further pecuniary penalty under Section 167(8) of the Sea Customs Act. The Court held that the breach of a condition in the import licence constituted a breach of the order under Section 3 of the Imports and Exports (Control) Act, 1947. The Court also emphasized that the decisions of the High Court are binding on administrative tribunals. The appeal was dismissed, and the order of the High Court was set aside, with an order of prohibition restraining the Customs authority from proceeding with the inquiry under Section 167(8) of the Sea Customs Act.

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