1998 (9) TMI 99 - SC - Customs

Whether the goods are liable to be confiscated under Sections 111(d) of the Act? Held that - The submission of Shri Choudhary is that the Tribunal was in error in holding that the finding recorded by the Collector that there is misdeclaration of value was based on no evidence. We find merit in the aforesaid contention of Shri Choudhary. Also the Collector had also ordered confiscation of the goods under Section 111(p) of the Act for the reason that there was violation of the provisions of Section 11C of the Act the Tribunal while allowing the appeal and setting aside the order of the Collector has not dealt with the part of the order of the Collector finds support from the order of the Tribunal because the Tribunal while setting aside the order passed by the Collector has not dealt with the question whether the goods were liable to be confiscated under Section 111(p) on account of contravention of the requirement of Section 11C of the Act. Thus matter is required to be remitted to the Tribunal for consideration of the question whether the goods are liable to be confiscated under Sections 111(m) on the ground of misdeclaration of the value of bobbins and under Section 111(p) on the ground of contravention of the provisions of Section 11C of the Act. The appeal is accordingly allowed by way of remand.

Summary

Issues:
1. Confiscation of goods under various sections of the Customs Act, 1962.
2. Jurisdiction of the Bombay Collectorate in passing the order of confiscation.
3. Validity of import licenses obtained through fraud.
4. Misdeclaration of value in the import of goods.
5. Contravention of Section 11C of the Customs Act.

Confiscation of Goods:
The Collector of Customs, Bombay, ordered the absolute confiscation of goods imported by respondent No. 1 under various sections of the Customs Act, 1962, and imposed penalties on the respondents. The Collector held that the import licenses were cancelled ab initio due to fraud, leading to the goods being imported in contravention of the law. The Collector also cited misdeclaration of value and improper storage location as reasons for confiscation.

Jurisdiction Issue:
The Customs, Excise and Gold (Control) Appellate Tribunal set aside the Collector's order, with separate judgments by the Judicial Member and the Technical Member. The Judicial Member held that the Bombay Collectorate lacked jurisdiction to confiscate the goods, while the Technical Member disagreed, stating that jurisdiction was valid. However, both members agreed that the cancellation of licenses took effect only at the time of confiscation.

Validity of Import Licenses:
The Tribunal, in line with legal precedent, ruled that the cancellation of licenses due to fraud did not render the import of goods illegal. The licenses were deemed voidable, not void, and remained valid until properly revoked. As the licenses were cancelled after the goods were imported, the Tribunal found no violation of import laws.

Misdeclaration of Value:
The Tribunal found merit in the argument that the Collector's finding of misdeclaration of value lacked evidence. The Collector's appraisal of the bobbins' value was challenged, leading to the Tribunal's decision in favor of the appellants on this issue.

Contravention of Section 11C:
The Tribunal remitted the matter to consider whether the goods were liable for confiscation under Sections 111(m) and (p) of the Act due to misdeclaration of value and contravention of Section 11C. The Tribunal's order set aside the Collector's decision and directed a reevaluation of the confiscation under these specific sections.

Interim Order:
An interim order allowed the sale of goods under specific conditions, including depositing the sale amount with the Collector. The parties were directed to seek further directions from the Tribunal regarding the sale of goods. No costs were awarded in this matter.