1983 (6) TMI 36 - HC - Customs

Summary

Issues Involved:
1. Legality of the search and seizure conducted by Customs Officers.
2. Validity of the adjudication proceedings and show cause notices.
3. Application of principles of natural justice.
4. Applicability of Article 20(3) of the Indian Constitution.
5. Simultaneous continuation of adjudication proceedings and criminal trials.
6. Presumption of foreign origin of gold under Section 123(1) of the Customs Act, 1962.

Detailed Analysis:

1. Legality of the Search and Seizure Conducted by Customs Officers:
The Customs Officers conducted a search on 30th March 1972 at premises No. 35, Nalini Seth Road, Calcutta, after breaking open the door despite objections from the petitioner. Gold bars and lumps with foreign inscriptions were recovered and seized on the reasonable belief that they were smuggled. The petitioner and others present were arrested and taken to Customs House, where written statements were obtained.

2. Validity of the Adjudication Proceedings and Show Cause Notices:
Adjudication proceedings were initiated with a show cause notice dated 20th June 1972, asking why the seized gold should not be confiscated under Section 71 of the Gold (Control) Act, 1968, and Section 111(d) of the Customs Act, 1962. The petitioner was also asked why penal action should not follow under Section 112 of the Customs Act, 1962. The adjudicating authority imposed penalties and ordered confiscation of the gold under Section 111(d) of the Customs Act, 1962, and the Gold Control Act, 1968.

3. Application of Principles of Natural Justice:
The petitioner claimed a violation of principles of natural justice, arguing that he was not given a fair hearing and that the adjudicating authorities disbelieved his statements. The court found that the petitioner was given several opportunities for a personal hearing, which he did not avail of, and thus there was no violation of natural justice.

4. Applicability of Article 20(3) of the Indian Constitution:
The petitioner argued that the adjudication proceedings should be deferred until the criminal cases were finalized to avoid self-incrimination under Article 20(3). The court held that the adjudication proceedings are independent of criminal proceedings and that Article 20(3) does not apply to departmental proceedings. The court cited various precedents to support the view that protection under Article 20(3) is not available in departmental proceedings.

5. Simultaneous Continuation of Adjudication Proceedings and Criminal Trials:
The court held that the adjudication proceedings and criminal trials could continue simultaneously. Section 127 of the Customs Act, 1962, allows for the award of confiscation or penalty without preventing the infliction of any punishment under other laws. The court found no bar to simultaneous proceedings.

6. Presumption of Foreign Origin of Gold under Section 123(1) of the Customs Act, 1962:
The petitioner contended that the existence of foreign markings on the gold bars could not lead to a presumption of foreign origin. The court referred to precedents indicating that foreign markings alone are not sufficient to establish the foreign origin of goods. However, the court upheld the adjudicating authority's decision based on the reasonable belief that the gold was smuggled.

Conclusion:
The court discharged the civil rules, holding that the adjudication proceedings were valid, there was no violation of natural justice, and Article 20(3) did not apply to the departmental proceedings. The simultaneous continuation of adjudication and criminal proceedings was permitted, and the penalties and confiscations ordered by the adjudicating authority were upheld.