1988 (12) TMI 121 - HC - Customs

Summary

Issues Involved:
1. Legality of the search and seizure conducted by Customs authorities.
2. Validity of the adjudication order passed by the Collector of Customs.
3. Allegations of under-invoicing and misdeclaration of imported goods.
4. Imposition of redemption fine and penalty.
5. Jurisdiction of the Collector of Customs to reassess goods already cleared.
6. Maintainability of the writ petition in light of alternative remedies.

Detailed Analysis:

1. Legality of the Search and Seizure Conducted by Customs Authorities:
The petitioner challenged the search and seizure conducted by the Assistant Collector of Customs, SIB, and other officials on 7th August 1987, arguing that the goods seized were legally and validly imported. The court noted that the Customs authorities had previously assessed and cleared the goods imported by M/s. Mercury Exports and M/s. Oriental Leather Industries. The seizure was deemed arbitrary and unjustified as the goods were already assessed and duty paid.

2. Validity of the Adjudication Order Passed by the Collector of Customs:
The petitioner contended that the Collector of Customs had no authority to initiate proceedings once the goods were assessed and cleared by the proper officer. The court agreed, stating that "the Collector of Customs has no power or authority to review his own order" and that any modification should be done through the appropriate legal channels, such as an appeal under Section 129D of the Customs Act. The adjudication order was deemed illegal and without jurisdiction.

3. Allegations of Under-Invoicing and Misdeclaration of Imported Goods:
The petitioner argued that the Customs authorities had accepted the declared value of the goods in previous instances and were bound by their own precedents. The court supported this view, citing the case of Mercantile Express Co. Ltd. v. Assistant Collector of Customs, which held that Customs authorities are bound by their own precedents. The court found no evidence of under-invoicing and ruled that the declared value should be accepted.

4. Imposition of Redemption Fine and Penalty:
The adjudication order imposed a redemption fine of Rs. 2 lakhs and a penalty of Rs. 5 lakhs on the petitioner. The court found this imposition arbitrary and without basis, particularly as similar goods had been cleared without such penalties. The court quashed the imposition of the fine and penalty, stating that the Customs authorities acted vindictively and without jurisdiction.

5. Jurisdiction of the Collector of Customs to Reassess Goods Already Cleared:
The court held that once goods are assessed and cleared by the proper officer, the Collector of Customs has no authority to reassess them. The proper course of action would be to file an appeal under Section 129D of the Customs Act. The court noted that the reassessment and subsequent demands for additional duty were illegal and quashed them.

6. Maintainability of the Writ Petition in Light of Alternative Remedies:
The respondents argued that the writ petition was not maintainable as the petitioner had not exhausted alternative remedies available under the Customs Act. The court rejected this argument, stating that alternative remedies do not bar the jurisdiction of the court when the impugned order is arbitrary, without jurisdiction, or violates principles of natural justice. The court found that the adjudication order was arbitrary and manifestly unreasonable, thus justifying the writ petition.

Conclusion:
The court quashed the adjudication order, including the imposition of redemption fine and penalty, and directed the Customs authorities to refund the amounts collected from the petitioner. The court emphasized that the Customs authorities must adhere to their own precedents and cannot arbitrarily reassess goods already cleared. The writ petition was found to be maintainable, and the actions of the Customs authorities were deemed illegal and without jurisdiction.