1973 (11) TMI 87 - HC - Customs

Summary

Issues Involved:
1. Legality of the seizure and the extension of the statutory period for issuing a show cause notice.
2. Validity of the order of confiscation and penalty without providing a reasonable opportunity to be heard.
3. Dismissal of the appeal for non-compliance with the pre-deposit requirement.
4. Entitlement to the return of seized goods after the statutory period.

Detailed Analysis:

1. Legality of the Seizure and Extension of Statutory Period:

The petitioner, a registered partnership firm, had its factory premises raided by Customs Officers on May 26, 1969, resulting in the seizure of synthetic yarn and fabrics under Section 110 of the Customs Act, 1962. The Collector of Customs extended the statutory period for issuing a show cause notice by two months on November 27, 1969, without notifying the petitioner. The petitioner contended that this extension was illegal and invalid as it was done ex parte and without notice. The court referred to Sections 110, 112, and 124 of the Act, and the Supreme Court's interpretation in Assistant Collector of Customs v. Charon Das Malhotra, which held that the extension of time without offering an opportunity to show cause was illegal and a nullity. Consequently, the extension order dated November 27, 1969, was deemed illegal.

2. Validity of the Order of Confiscation and Penalty:

The petitioner argued that the order of confiscation and penalty was invalid as the notice under Section 124 was issued after the expiry of the six-month period stipulated in Section 110. The court clarified that Section 124 does not prescribe a time limit for issuing a notice and that the six-month period in Section 110 affects only the seizure and not the validity of the notice. The court distinguished between procedural provisions in Chapter XIII and substantive provisions in Chapter XIV of the Act, concluding that the power to confiscate goods and impose penalties under Sections 111 and 112 is not dependent on the seizure provisions of Section 110.

3. Dismissal of the Appeal for Non-Compliance with Pre-Deposit Requirement:

The petitioner's appeal was dismissed for failing to deposit Rs. 15,000 as required under Section 129 of the Act. The petitioner contended that this condition was harsh and deprived him of the right to be heard in appeal. The court noted that the petitioner was heard on the amount to be deposited before the order was made and that the order was passed on merits. Therefore, the requirement to deposit Rs. 15,000 was deemed justified and not a denial of the right to appeal.

4. Entitlement to the Return of Seized Goods After the Statutory Period:

The petitioner claimed a right to the return of the seized goods after the expiry of the six-month period under Section 110(2). The court held that once an order of confiscation is passed under Section 111, the question of returning the goods does not survive. The court cited its previous decision in Special Civil Application No. 555 of 1971, which supported the conclusion that the right to return goods is extinguished once confiscation is ordered.

Conclusion:

The court dismissed the petition, upholding the orders of confiscation and penalty, and the dismissal of the appeal for non-compliance with the pre-deposit requirement. The rule issued on the petition was discharged with costs. The request for leave to appeal under Article 133 of the Constitution was rejected as the case did not involve any substantial question of law of general importance requiring determination by the Supreme Court.