1986 (11) TMI 57 - HC - Customs

Issues Involved:
1. Validity of Notification No. 101-Customs dated 1-7-1964 and Notification G.S.R. 37 dated 3-1-1969.
2. Legality of the seizure and subsequent proceedings.
3. Jurisdiction and authority of the Customs Preventive Officers.
4. Reasonable belief for seizure.
5. Validity of the order passed by the first respondent.
6. Imposition of penalty under Section 114 of the Customs Act.
7. Burden of proof on the Customs Department.
8. Notification of the specified area under Section 11-H(c) of the Customs Act.

Detailed Analysis:

1. Validity of Notification No. 101-Customs dated 1-7-1964 and Notification G.S.R. 37 dated 3-1-1969:
The petitioner challenged the notifications on the grounds of excessive delegation and unreasonable restrictions affecting the right to property. The court noted that the power of revision under Section 130 of the Customs Act, 1962, was exercised with safeguards, and the notification had become redundant due to amendments by the Finance Act 2 of 1980. The court upheld the validity of Notification No. 7, Customs, dated 3-1-1969, stating that the restrictions under Sections 11-J, K, L, and M of the Act were reasonable and aimed at preventing illegal export of silver bullion and coins.

2. Legality of the seizure and subsequent proceedings:
The petitioner argued that the seizure was invalid as it was conducted by Customs Preventive Officers who were not proper officers. The court referred to Section 110 and Section 2(34) of the Customs Act, and the Madras Supplement to the Customs Manual, which designated officers of the Preventive Department as proper officers. The court found no substance in the objection and upheld the legality of the seizure and subsequent proceedings.

3. Jurisdiction and authority of the Customs Preventive Officers:
The court clarified that the Preventive Officers were designated as proper officers under the Customs Act by the Collector of Customs, thus validating their authority to conduct the search and seizure.

4. Reasonable belief for seizure:
The petitioner contended that the Preventive Officers could not have entertained a reasonable belief that the silver was liable to confiscation. The court considered the circumstances of the search, the lack of documents supporting ownership, and the disclaimer of interest by the temple manager. The court concluded that the officers had bona fide and honestly entertained a reasonable belief that the silver was liable to confiscation.

5. Validity of the order passed by the first respondent:
The petitioner argued that the order was void, without jurisdiction, and based on conjectures and surmises. The court found that the order was based on available materials and was within the jurisdiction of the first respondent. The court rejected this contention.

6. Imposition of penalty under Section 114 of the Customs Act:
The petitioner contended that an overt act was required for the imposition of penalty. The court noted that the petitioner had violated Sections 11-J, K, and L of the Act, which rendered the goods liable to confiscation under Section 113(1) of the Act. The court held that the omission to comply with statutory requirements sufficed to attract the levy of penalty under Section 114 of the Act.

7. Burden of proof on the Customs Department:
The petitioner argued that the Customs Department failed to establish violations of the Act. The court pointed out that the petitioner had admitted violations of Sections 11-K and L in correspondence, making it unnecessary for the department to prove further. The court found no substance in this contention.

8. Notification of the specified area under Section 11-H(c) of the Customs Act:
The petitioner claimed that there was no notification declaring the area where the silver was recovered as a specified area. The court referred to a notification dated 7-1-1969, which declared an inland area of 50 kilometers from the coast of Madras as a specified area. The court confirmed that Pozhal fell within this specified area, rejecting the petitioner's contention.

Conclusion:
The court dismissed the writ petitions, upholding the validity of the notifications, the legality of the seizure and proceedings, the authority of the Preventive Officers, the reasonable belief for seizure, the validity of the first respondent's order, the imposition of penalty, and the notification of the specified area. The petitioner was ordered to pay costs of Rs. 500/- to the third respondent.

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