1974 (9) TMI 124 - HC - Customs

Summary

Issues Involved:
1. Limitation under Section 110(2) of the Customs Act, 1962.
2. Requirement of judicial or quasi-judicial adjudication under Section 129 of the Customs Act, 1962.
3. Legality of the ex parte order extending time under Section 110(2).
4. Merits of the penalty imposed.
5. Dismissal of appeal for non-compliance with Section 129(1).

Issue-wise Detailed Analysis:

1. Limitation under Section 110(2):
The first issue is whether the proviso to Section 110(2) acts as a limitation to proceedings for confiscation or imposition of penalty under Section 124. The Court held that the time specified in Section 110(2) is not a limitation for initiating proceedings under Section 124 but only a limit for holding the goods without issuing a notice. The Court opined that the Supreme Court's decision in Assistant Collector, Customs v. Malhotra, AIR 1972 SC 689, did not support the contention that the time limit under Section 110(2) applies to proceedings under Section 124. The Court concluded that the illegality in extending the time under Section 110(2) did not render the penalty proceedings invalid or without jurisdiction.

2. Requirement of Judicial or Quasi-Judicial Adjudication under Section 129:
The second issue is whether the proviso to Section 129 requires a judicial or quasi-judicial adjudication of the interim relief prayed for by an appellant. The Court held that the discretion under Section 129(1) is judicial or quasi-judicial and must be exercised with reference to objective tests such as hardship to the appellant. The Court emphasized that the principles of natural justice must be applied, requiring the appellant to be heard before disposing of the application for interim relief.

3. Legality of the Ex Parte Order Extending Time under Section 110(2):
Mr. Sen contended that the entire proceeding was illegal as the show cause notice was issued based on an ex parte order extending time under Section 110(2). The Court, however, overruled this contention, holding that the ex parte extension did not invalidate the penalty proceedings, as the limitation under Section 110(2) pertains only to the detention of goods and not to the initiation of proceedings under Section 124.

4. Merits of the Penalty Imposed:
Mr. Sen challenged the penalty on merits, but the Court did not delve into this issue, as it found that the appeal had not been lawfully disposed of by the Board. The Court noted that the Collector had found the petitioner's active involvement in the concealment of smuggled goods, but it did not make a final determination on the merits of the penalty.

5. Dismissal of Appeal for Non-Compliance with Section 129(1):
The petitioner's appeal was dismissed for non-compliance with the requirement of Section 129(1) after the application for relief was rejected ex parte. The Court held that the Board acted in violation of natural justice by disposing of the application ex parte and based on an undisclosed report from the Collector. The Court emphasized that the appellant should have been heard, and the application should have been disposed of on contest.

Conclusion:
The Court set aside the ex parte order dated May 30, 1970, rejecting the petitioner's application for interim relief under Section 129(1), and the subsequent orders dismissing the appeal. The Court directed that the appeal and the application be disposed of by the Board in accordance with law, ensuring compliance with principles of natural justice. The Rule was made absolute in part, and the application for interim relief was dismissed as infructuous. There was no order as to costs.