2013 (1) TMI 363 - HC - Customs

Writ of Certitorarified Mandamus - petitioner was the owner of the goods carrier - Commercial Tax Officer on routine inspection found it carrying huge quantity of foreign liquor - goods were detained - Commercial Tax Department intimated the Customs Department to seize the foreign liquor bottles under a mahazar dated 28.6.2011 in the presence of two witnesses - SCN issued - Held that - Plea taken by assessee that the Customs Department has not discharged its burden in proving the illicit importation of the goods, does not arise in this case, as the burden is on the person who claims to be the owner of the goods so seized. Therefore, the plea that Section 123 of the Customs Act is not attracted and goods are not liable for confiscation cannot be sustained - against petitioner. Delay in issuance of show cause notice from the relevant date - Held that - The goods were seized under the mahazar by the Customs Department on 28.6.2011 and the show cause notice was issued on 23.12.2011, to wit within six months. In any event, Section 110 of the Customs Act, which has been referred to by the petitioner, has nothing to do with the show cause notice, as it relates to detention of the goods beyond the period specified. Thus, that provision does not render the show cause notice bad. The second plea taken by the petitioner is therefore unsustainable in law. Materials given at the time of enquiry have not been considered in the show cause notice and the action should have been dropped - Held that - At the stage of show cause notice, the authority gathers the materials and issues notice for proceeding under the Customs Act. It is at the stage of adjudication the relevant materials will be considered by the competent authority and confiscation or penalty, as the case may be, will be ordered on the merits of the case. There is no substance in pleading that at the stage of enquiry the authority should have dropped the proceeding as against the petitioner. That will amount to prejudging the issue by an authority, who does not have the jurisdiction to do so. Goods in question have not been seized by the Customs Department therefore no penalty on the petitioner as registered owner - Held that - This fact can be brought to the attention of the adjudicating authority at the time of hearing the case and the authority is bound to consider the said plea in the light of the mahazar drawn by the Customs Department. This Court is not inclined to go into the factual aspects of the case . Admittedly, the goods in question are foreign liquor bottles and no document appears to have been produced. The vehicle stands in the name of the petitioner, which however is denied by the petitioner stating that she has sold the vehicle based on a sale receipt and delivery note. These are all factual aspects of the case which have to be considered by the adjudicating authority to come to a conclusion regarding the involvement of the petitioner in the alleged offence. All the plea taken by the petitioner on facts are issues to be decided in adjudication in the result, finding no merits the writ petition is dismissed giving liberty to the petitioner to submit her reply to notice and participate in the adjudication process, which will be conducted in accordance with the provisions of the Customs Act.

Issues:
1. Jurisdiction of Customs Department to issue show cause notice against petitioner.
2. Delay in issuance of show cause notice.
3. Consideration of materials in show cause notice.
4. Seizure of goods by Customs Department and penalty imposition.
5. Involvement of Commercial Tax Department in proceedings.
6. Allegations of mala fide actions by authorities.
7. Ownership of the vehicle and driver details.
8. Suppression of vital documents.
9. Inclusion of Commercial Tax Department in adjudication proceedings.
10. Enquiry by second respondent before issuing show cause notice.
11. Consideration of material documents before issuing show cause notice.

Analysis:
1. The petitioner challenged the show cause notice issued by the Customs Department under Section 112(a) of the Customs Act for levy of penalty, arguing lack of jurisdiction. The court noted that the petitioner claimed not to be the owner of the seized goods or the vehicle, shifting the burden to prove ownership. The court ruled against the petitioner on this issue.

2. The petitioner alleged delay in issuing the show cause notice, but the court found it was issued within six months of the goods' seizure, dismissing this plea as the notice's validity was not affected by the delay.

3. The court clarified that the show cause notice is a procedural step, and the adjudication process is where relevant materials are considered. The petitioner's argument that the materials provided during enquiry should have led to dropping the proceedings was deemed premature.

4. The court addressed the petitioner's plea that goods were not seized by the Customs Department, stating this fact can be raised during the adjudication process for consideration by the authority.

5. The involvement of the Commercial Tax Department in the proceedings was discussed, with the court noting that the department had handed over the goods to the Customs Department for further action, absolving them of any role in the subsequent process.

6. Allegations of mala fide actions by authorities were refuted, with the court finding no evidence to support such claims.

7. Details regarding the ownership of the vehicle and the driver were highlighted as factual issues to be addressed during adjudication.

8. The petitioner's claim of suppression of vital documents and correspondence between departments was acknowledged as a factual matter to be raised during the adjudication process.

9. The court emphasized that all factual issues and legal pleas raised by the petitioner could be addressed during the adjudication process, as they involve mixed questions of fact and law.

10. Ultimately, the court dismissed the writ petition, allowing the petitioner to participate in the adjudication process and submit a reply to the notice, which would be conducted in accordance with the provisions of the Customs Act. No costs were awarded, and related motions were closed.

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