1986 (11) TMI 62 - HC - Customs

Summary

Issues:
1. Confiscation of goods imported illegally under Customs Act.
2. Application of Section 111(d) of the Customs Act, 1962.
3. Justification of penalty under Section 112 of the Customs Act.

Analysis:

1. The petitioner, a partnership firm dealing in Stainless Steelware, had goods seized by Custom House officers on suspicion of illegal importation. The Assistant Collector held the goods were illegally imported and imposed a penalty. The petitioner's appeals were dismissed, leading to the writ petition challenging the orders.

2. The counter-affidavit argued that the confiscated goods were purchased and not imported illegally. The petitioner contended that confiscation under Section 111(d) of the Customs Act requires proof of import contrary to the law, which was lacking in this case.

3. The Standing Counsel argued for confiscation based on contravention of Customs Act provisions, citing a Supreme Court decision. However, the court found no evidence of illegal importation and emphasized the necessity to prove goods were imported contrary to the law for confiscation under Section 111(d).

4. The court distinguished the cited Supreme Court decision, stating that confiscation of goods requires proof of illegal importation, which was absent in this case. The order of confiscation was deemed unsustainable due to lack of evidence.

5. Regarding the penalty under Section 112 of the Customs Act, the court noted that it can only be levied if the possessor has knowledge of the goods being liable for confiscation. As there was no proof of illegal importation, the court deemed the penalty order unsustainable.

6. The court highlighted that the impugned order sustained by the authorities was based on the assumption that the goods were kept for sale, which was not the original charge. This discrepancy led the court to quash the order under revision.

7. Ultimately, the writ petition was allowed, and no costs were imposed in the circumstances of the case. The court ruled in favor of the petitioner due to the lack of evidence supporting the allegations of illegal importation and the subsequent penalty and confiscation orders were deemed unsustainable.