1983 (8) TMI 55 - HC - Central Excise

Show Cause Notice Words and phrases Notice in respect thereof is given Interpretation of Confiscation and penalty

Summary

Issues Involved:
1. Legality of the seizure of goods.
2. Compliance with the requirement of issuing a show cause notice under Section 110(2) of the Customs Act, 1962.
3. Validity of service of the show cause notice.

Detailed Analysis:

1. Legality of the Seizure of Goods:
The petitioners argued that the seizure of their goods was illegal as the officers had no reason to believe that the goods were liable to confiscation under the Customs Act, 1962. However, the court did not find it necessary to address this issue in detail, as the case could be decided on the second issue regarding the issuance of a show cause notice.

2. Compliance with the Requirement of Issuing a Show Cause Notice:
The petitioners claimed that no show cause notice, oral or written, was given to them within six months of the seizure of the goods, as required by Section 110(2) of the Customs Act, 1962. The respondents contended that the goods were seized on 11th September 1981, and a show cause notice was issued on 25th February 1982, within the six-month period. However, the court emphasized that the notice must be served on the person from whom the goods were seized or the owner of the goods within six months. The court cited Section 110(2) of the Act, which states that if no notice is given within six months, the goods must be returned to the person from whom they were seized.

3. Validity of Service of the Show Cause Notice:
The respondents claimed that the notice was served on 27th February 1982 to Shri Anil Kumar Gupta, who was believed to be the agent of the petitioners. The court examined the meaning of the word "given" in the context of Section 110(2) and concluded that it means due service of the notice on the concerned party. The court rejected the respondents' argument that mere awareness of the proceedings by the petitioners was sufficient compliance. The court emphasized that the notice must be in writing and must reach the party concerned. The court referred to a Division Bench decision of the Gujarat High Court and a Supreme Court decision, both supporting the view that the notice must be served to the concerned party to be considered "given."

The court found that the notice was not served in writing to the petitioners or their authorized agent within the stipulated period. The respondents' claim that the notice was served orally on Shri Anil Kumar Gupta was not sufficient, as the law requires the notice to be in writing. Furthermore, there was no evidence to establish that Shri Anil Kumar Gupta was the agent of the petitioners. The court concluded that there was no due compliance with the requirements of Section 110(2) of the Act, and hence, the seized goods must be returned to the petitioners.

Conclusion:
The court allowed the writ petition, setting aside the seizure of the goods and directing the respondents to return the seized goods to the petitioners. The proceedings for confiscation of the goods and imposition of penalty on the petitioners were quashed. The petitioners were also entitled to their costs.