1980 (8) TMI 103 - HC - Customs

Issues Involved: Jurisdiction of notices under Section 124 of the Customs Act, 1962; Violation of import conditions; Demand for demurrage charges; Validity of penalty under Section 112 of the Customs Act, 1962; Distribution of imported goods.

Issue-wise Detailed Analysis:

1. Jurisdiction of Notices under Section 124 of the Customs Act, 1962:

The petitioner challenged the notice dated 21-5-1979 issued under Section 124 of the Customs Act, 1962, by the Deputy Collector of Customs, Madras, and the notice dated 7-3-1979 issued by the Traffic Manager, Madras Port Trust, as being without jurisdiction and unjustified. The petitioner contended that the show cause notice was issued with a view to harass him, as the Customs Authorities were obstructive from the beginning. The court found that the show cause notice was premature and unjustified concerning the 47 bales found in the petitioner's possession and the goods already distributed, excluding the 5 bales found in Syed Abid Hussain's shop. The court quashed the notice, Exhibit-A, except for the 5 bales seized from Syed Abid Hussain's shop, allowing the authorities to proceed with the enquiry for those 5 bales.

2. Violation of Import Conditions:

The petitioner, President of the Muslim League Association, imported 100 bales of second-hand gift clothing from the UK for distribution to the poor and needy. The Customs Authorities alleged that the petitioner sold part of the goods, violating the import conditions. The court noted that the petitioner had six months to distribute the goods and had already distributed 53 bales, with certificates supporting this claim. The remaining 47 bales were found in the petitioner's possession. The court concluded that there was no contravention for the 47 bales and the distributed goods, except for the 5 bales found in Syed Abid Hussain's shop, which required further enquiry.

3. Demand for Demurrage Charges:

The second respondent demanded demurrage charges that had been waived, relying on provisions of the Major Port Trusts Act, 1963. The court found that none of the cited provisions enabled such a demand. The remission of demurrage charges was proper, and the claim for additional charges was unsupported by the Act. Consequently, the court quashed the notice of demand for demurrage charges.

4. Validity of Penalty under Section 112 of the Customs Act, 1962:

The show cause notice included a claim for penalty under Section 112 of the Customs Act. The court opined that the alleged act did not fall within the ambit of Section 112. If applicable, the allegations might come under Section 117 of the Customs Act. Therefore, the court quashed the notice seeking to impose a penalty under Section 112.

5. Distribution of Imported Goods:

The petitioner reiterated his intention to distribute the 47 bales to the poor and needy. The court directed the Customs Authorities to revoke the order under Section 110 of the Customs Act concerning the 47 bales. The third respondent was instructed to supervise the distribution, either personally or through other revenue officers, and issue a certificate post-distribution. The distribution was to be completed within three months from the judgment date.

Additional Direction:

After the initial dictation of the judgment, the petitioner's counsel requested a specific direction regarding the Rs. 20,100/- guarantee held by the Customs Treasury. The court directed the first respondent to return the amount to the petitioner after receiving the distribution report for the 47 bales.

Conclusion:

The court quashed the show cause notice and the demand for demurrage charges, except for the enquiry concerning the 5 bales found in Syed Abid Hussain's shop. The penalty under Section 112 was also quashed. Directions were issued for the distribution of the 47 bales and the return of the guarantee amount.

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