1979 (3) TMI 63 - HC - Central Excise

Search and seizure - Searches - Legality - Reason to believe - Connotation of - Confiscation and penalty

Issues Involved:
1. Legality of the seizure of goods and account books.
2. Voluntariness of the plaintiff's statement dated 28-8-1971.
3. Jurisdiction of the Civil Court to entertain the suit.
4. Good faith of the Central Excise officers in conducting the search and seizure.
5. Validity of the show cause notice received by the plaintiff.
6. Entitlement of the plaintiff to the re-delivery of goods or recovery of their value and damages.

Issue-wise Detailed Analysis:

1. Legality of the Seizure of Goods and Account Books:

The plaintiff argued that the seizure of goods and account books by the Central Excise officials was illegal and not in accordance with the Central Excise and Salt Act and the rules framed thereunder. The trial court initially found in favor of the plaintiff, holding that the seizure was not warranted by the rules under the Excise Act. However, upon appeal, it was determined that the search and seizure were conducted in conformity with Rule 201 of the Central Excise Rules and Section 103 of the Code of Criminal Procedure. The appellate court noted that the officers had reason to believe that the plaintiff had evaded payment of excise duty, thus justifying the search and seizure under the relevant provisions. The appellate court set aside the trial court's findings, ruling that the seizure was lawful.

2. Voluntariness of the Plaintiff's Statement Dated 28-8-1971:

The plaintiff contended that his statement dated 28-8-1971 was obtained under threat and coercion by the Central Excise officials. The trial court accepted this contention, finding that the statement was not voluntary. However, the appellate court found no reason to disbelieve the evidence of the Central Excise officials, who testified that the statement was given voluntarily. The appellate court held that the plaintiff's allegations were not supported by evidence and were contradicted by the lack of mention in earlier notices and the plaint.

3. Jurisdiction of the Civil Court to Entertain the Suit:

The defendants argued that the Civil Court had no jurisdiction to entertain the suit due to the special remedies provided under Sections 35 and 36 of the Central Excise and Salt Act. The trial court, however, held that the Civil Court had jurisdiction since the seizure was outside the provisions of the Act. The appellate court disagreed, ruling that the Civil Court's jurisdiction was impliedly barred by the special enactment. The appellate court emphasized that the adjudication of whether the goods were liable for confiscation was within the exclusive domain of the authorities constituted under the Central Excise and Salt Act.

4. Good Faith of the Central Excise Officers in Conducting the Search and Seizure:

The trial court found that the Central Excise officers did not act in good faith while discharging their duties. This finding was based on the plaintiff's allegation that the officers had demanded a bribe, which was not mentioned in the plaint or earlier notices. The appellate court, however, found no evidence to support the claim of bad faith. It held that the officers acted within the scope of their authority and in accordance with the law. The appellate court set aside the trial court's finding of lack of good faith.

5. Validity of the Show Cause Notice Received by the Plaintiff:

The plaintiff challenged the validity of the show cause notice received on 6-3-1972. The trial court did not specifically address this issue in its judgment. The appellate court, however, noted that the show cause notice was part of the ongoing departmental adjudication process and that the Civil Court had no jurisdiction to adjudicate on the validity of such notices.

6. Entitlement of the Plaintiff to the Re-delivery of Goods or Recovery of Their Value and Damages:

The trial court decreed in favor of the plaintiff, directing the defendants to deliver back the seized goods or pay their value of Rs. 30,000/- along with Rs. 2,000/- as damages. The appellate court, however, set aside this decree, holding that the seizure was lawful and in accordance with the provisions of the Act. Consequently, the plaintiff was not entitled to the re-delivery of the goods or recovery of their value and damages.

Conclusion:

The appellate court allowed the appeal, setting aside the judgment and decree of the trial court. It dismissed the plaintiff's suit, holding that the search and seizure were lawful, the Civil Court had no jurisdiction to entertain the suit, and the Central Excise officers acted in good faith. The award of damages was also set aside.

← Previous Next →