2012 (10) TMI 445 - HC - Customs

Writ petition - Confiscation and penalty alternative remedy Held that - Writ petition cannot be directly entertained ignoring the statutory remedy of appeal, that was available to the petitioner - petitioner did not avail the remedy of getting the reference made to this Court under Section 130A of the Act. Petitioner has also not challenged the order passed by learned Additional District Judge - Petitioner has thus by his own action/inaction, while not questioning correctness of the confiscation order as also the order passed by the learned Additional District Judge, accepted those orders as valid, which orders have even otherwise became final. In these facts, petitioner cannot be held to be entitled to the relief prayed for

Issues Involved:
1. Legality of the confiscation order dated 7-5-1996.
2. Validity of the penalty imposed on the petitioner.
3. Jurisdiction of the customs authorities to seize the silver.
4. Admissibility of statements recorded under Section 108 of the Customs Act.
5. Availability and exhaustion of alternative remedies.
6. Compliance with principles of natural justice in the adjudicating and appellate orders.
7. Impact of criminal court's discharge order on the confiscation and penalty.

Detailed Analysis:

1. Legality of the Confiscation Order:
The petitioner challenged the confiscation order dated 7-5-1996, arguing that the silver did not bear any foreign markings, and thus, was not subject to seizure under the Customs Act. The court noted that the petitioner did not appeal against the confiscation before the CEGAT, indicating acceptance of the order. The court emphasized that the statutory remedy of appeal should have been exhausted before filing the writ petition.

2. Validity of the Penalty Imposed:
The petitioner contested the penalty of Rs. 50,000 imposed under Section 112 of the Customs Act. The court observed that the petitioner only challenged the penalty before the CEGAT and not the confiscation, which rendered the confiscation order final. The court held that the petitioner could not now challenge the confiscation order directly in the writ petition.

3. Jurisdiction of the Customs Authorities:
The petitioner argued that the customs authorities had no jurisdiction to seize the silver as it was being transported within Indian territory. The court found that the adjudicating authority and the CEGAT had considered and rejected this argument. The court also noted that the petitioner did not challenge the findings of the adjudicating authority regarding the jurisdiction.

4. Admissibility of Statements Recorded Under Section 108:
The petitioner claimed that statements recorded under Section 108 of the Customs Act were inadmissible. The court referred to the Supreme Court's ruling in K.I. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, Cochin, which held that such statements are admissible during adjudication proceedings and are not considered as statements of an accused under Section 24 of the Evidence Act.

5. Availability and Exhaustion of Alternative Remedies:
The court highlighted that the petitioner had the alternative remedy of filing an appeal under Section 129A of the Customs Act and getting a reference made to the High Court under Section 130A. The court cited the Supreme Court's decision in Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement & Anr., which emphasized that writ petitions should not be entertained when statutory remedies are available and have not been exhausted.

6. Compliance with Principles of Natural Justice:
The petitioner argued that the adjudicating and appellate orders lacked reasons, violating principles of natural justice. The court held that the petitioner should have raised this issue in the appeal before the CEGAT and not directly in the writ petition. The court cited the Supreme Court's judgment in Kranti Associates Pvt. Ltd. & Anr. v. Masood Ahmed Khan & Ors., which mandates reasoned orders but also emphasizes exhausting statutory remedies.

7. Impact of Criminal Court's Discharge Order:
The petitioner contended that the discharge order by the criminal court should affect the confiscation and penalty. The court referred to the Supreme Court's rulings in Tukaram G. Gaokar v. R.N. Shukla & Ors. and Sewpujanrai Indrasanarai Ltd. v. Collector of Customs and Ors., which clarified that confiscation proceedings are independent of criminal proceedings and can be maintained even if the accused is discharged in the criminal case.

Conclusion:
The court dismissed the writ petition, holding that the petitioner failed to exhaust alternative statutory remedies and cannot challenge the confiscation and penalty directly in a writ petition. The court also found that the adjudicating and appellate authorities had considered the petitioner's arguments, and the orders were not lacking in reasons. The court emphasized the distinction between adjudication and criminal proceedings, upholding the confiscation and penalty despite the discharge in the criminal case.

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