1961 (4) TMI 2 - SC - Customs

Penalty can be recovered only by officer of customs and not by Chief Customs Authority Confiscation Commutation of order of confiscation to penalty

Issues Involved:
1. Jurisdiction and authority under Section 193 of the Sea Customs Act, 1878.
2. Validity of the penalty imposed by the Central Board of Revenue.
3. Enforcement of penalties by the Collector of Customs.
4. Requirement of consent for commutation of confiscation to penalty under Section 190 of the Act.

Issue-wise Detailed Analysis:

1. Jurisdiction and Authority under Section 193 of the Sea Customs Act, 1878:
The primary issue was whether the Collector of Customs had the authority under Section 193 of the Sea Customs Act, 1878, to enforce a penalty imposed by the Central Board of Revenue. The court noted that "Section 193 of the Act should be liberally construed with a view to effectuate the intention of the legislature." However, it was determined that the Central Board of Revenue was not an "officer of Customs" within the meaning of Section 193. The section explicitly states that only an officer of Customs who has adjudged a penalty or increased rate of duty can realize it through a Magistrate. The court concluded that the Chief Customs Authority is not included in the list of officers empowered to adjudicate penalties under Section 182 of the Act.

2. Validity of the Penalty Imposed by the Central Board of Revenue:
The respondent argued that the Central Board of Revenue did not have the jurisdiction to impose the penalty and that the order was illegal. The court examined Section 188, which allows the Chief Customs Authority to modify orders but not to impose a higher penalty than originally adjudged. The court found that the Central Board of Revenue's order was within its jurisdiction, as it did not impose a penalty higher than the original amount.

3. Enforcement of Penalties by the Collector of Customs:
The court addressed whether the Collector of Customs could enforce a penalty imposed by the Central Board of Revenue. The appellant argued that an appellate order should be treated as a continuation of the original order, thus allowing the Collector to enforce it. However, the court rejected this argument, stating, "In the absence of any statutory fiction giving rise to that result, it is not permissible to treat the order made by one authority as that made by another authority." Therefore, the Collector of Customs could not enforce the penalty imposed by the Central Board of Revenue under Section 193.

4. Requirement of Consent for Commutation of Confiscation to Penalty under Section 190 of the Act:
The court examined whether the Central Board of Revenue had obtained the necessary consent from the owner of the goods before commuting the order of confiscation to a penalty under Section 190. The High Court had observed that there was no evidence showing that the consent of the owner was obtained. The Supreme Court agreed, stating, "In the absence of any such evidence we must hold that it has not been established that the Chief Customs Authority made its order under Section 190 of the Act with the consent of the respondent." The court emphasized that the validity of the order depended on fulfilling this condition, which was not demonstrated in this case.

Conclusion:
The Supreme Court upheld the High Court's decision to set aside and cancel the warrants of attachment issued by the Magistrate. The appeal was dismissed, affirming that the Collector of Customs did not have the jurisdiction to enforce the penalty imposed by the Central Board of Revenue under Section 193 of the Sea Customs Act, 1878. The court also highlighted the necessity of obtaining the owner's consent for commutation under Section 190, which was not established in this case.

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