1982 (6) TMI 59 - HC - Customs

Search and seizure - Inspection of premises - Reasonable belief is not a pre-condition for inspection - Writ jurisdiction - Exparte order - Writ Petition - Penalty

Summary

Issues Involved:
1. Competency of the officer conducting the search and seizure.
2. Formation of reasonable belief for the seizure.
3. Burden of proof concerning different categories of goods.
4. Determination of value and duty for assessing the penalty.

Issue-wise Detailed Analysis:

1. Competency of the Officer Conducting the Search and Seizure:
The petitioners contended that the search and subsequent seizure were conducted by a person not competent in law, making all subsequent steps void. The court found that the Superintendent of Central Excise was vested with powers under Section 110 of the Customs Act, 1962, and that this case was not a 'search' within the meaning of Section 105 but an 'inspection' under Section 106A. The court held that the seizure was valid as it was conducted by a competent officer, and any invalidity in the inspection did not vitiate the seizure or subsequent adjudication proceedings.

2. Formation of Reasonable Belief for the Seizure:
The petitioners argued that the officer did not form a reasonable belief as required by Section 110 of the Act. The court noted that the Superintendent found foreign goods displayed in the shop, and the petitioner could not produce the required register or vouchers. The court concluded that the officer had a reasonable belief that the goods were liable to confiscation, as evidenced by the panchanama and the findings of the adjudicating authorities. The court rejected the petitioner's contention, affirming that the seizure was based on a reasonable belief.

3. Burden of Proof Concerning Different Categories of Goods:
The seized goods fell into three categories: goods specified in Section 123, goods notified under Section 11B, and other goods. For goods under Section 123, the burden of proof lay on the petitioners, which they failed to discharge as the vouchers did not tally with the goods, and the bills from Mogwa & Company were found to be fabricated. For goods under Section 11B, the petitioners failed to maintain the required register and produce valid vouchers. The court upheld the findings of the adjudicating authority regarding these categories. However, for the third category of goods, the court found that the department did not provide sufficient evidence to prove they were smuggled. The court directed that these goods be released and returned to the petitioners.

4. Determination of Value and Duty for Assessing the Penalty:
The petitioners argued that the authorities did not determine the value or duty payable on the seized goods, which was essential for assessing the penalty. The court acknowledged that the value was not indicated in the show cause notice or the adjudication order. However, the appellate authority had reduced the penalty to Rs. 5,000, and the court found it unnecessary to send the matter back for reassessment, considering the penalty was within the statutory limits. The court did not interfere with this part of the order.

Conclusion:
The writ petition was allowed in part. The court directed the respondents to release and return the third category of goods to the petitioners, as the department failed to prove they were smuggled. In all other respects, the writ petition was dismissed. There was no order as to costs.