1994 (3) TMI 400 - HC - Customs

Summary

Issues Involved:
1. Legality of the order passed by the Additional Chief Metropolitan Magistrate (ACMM) regarding the disposal of Close-Up toothpaste.
2. Jurisdiction of the ACMM under Section 451 of the Code of Criminal Procedure.
3. Confiscation of goods under Section 119 of the Customs Act.
4. Safeguarding the interests of the Customs Department and the respondent.

Issue-wise Detailed Analysis:

1. Legality of the Order Passed by the ACMM:
The Department of Customs filed a petition under Section 482 of the Code of Criminal Procedure to set aside the order dated 23.2.1994 passed by the ACMM. The ACMM had dismissed the Customs Department's application to dispose of the Close-Up toothpaste and allowed the respondent's application for its release. The Customs Department argued that the Close-Up toothpaste was used to conceal smuggled goods and was seized under Section 110 of the Customs Act, making it liable for confiscation. The court examined whether there was any illegality in the ACMM's order, noting that the toothpaste was a perishable commodity requiring prompt disposal to prevent loss of value.

2. Jurisdiction of the ACMM under Section 451 of the Code of Criminal Procedure:
The Customs Department contended that the ACMM had no jurisdiction to pass the order as the goods were not produced before the court. The court disagreed, stating that the production of property before the trial court does not necessitate physical presence. It emphasized that the Close-Up toothpaste was case property and relevant to the smuggling charges, thus falling under the court's jurisdiction. The court upheld the ACMM's jurisdiction under Section 451 of the Code to pass the impugned order.

3. Confiscation of Goods under Section 119 of the Customs Act:
The court acknowledged that under Section 119 of the Customs Act, goods used to conceal smuggled items are liable to confiscation. Section 124 requires a show cause notice before confiscation, and proceedings must be initiated within six months of the seizure. The court noted that this period had not expired, and the Customs Department had sought court permission to dispose of the perishable toothpaste. The court found no illegality in the ACMM's order, as it safeguarded the department's interests through an indemnity bond and allowed for future compensation if confiscation was warranted.

4. Safeguarding the Interests of the Customs Department and the Respondent:
The court considered whether the conditions imposed by the ACMM were sufficient to protect the Customs Department's interests. The ACMM had directed the respondent to furnish an indemnity bond of Rs. 12 lakhs, covering the toothpaste's value, and to execute an undertaking to pay the amount if the goods were ultimately deemed confiscable. The court modified the ACMM's order to include retaining one carton of toothpaste for trial evidence, ensuring the department's interests were safeguarded while allowing the respondent to avoid irreparable loss.

Conclusion:
The petition was disposed of with the modification that the respondent must provide an undertaking for payment to the Customs Department if the goods are confiscated and retain one carton of toothpaste for trial evidence. The court upheld the ACMM's jurisdiction and found no illegality in the order, ensuring both parties' interests were protected.