1978 (8) TMI 92 - HC - Customs

Issues Involved:

1. Legality of the re-opening of the order permitting clearance of imported goods.
2. Classification and validity of the import licenses for the imported goods.
3. Confiscation of the goods under Section 111(d) of the Customs Act, 1962.
4. Imposition of redemption fine and personal penalty.
5. Jurisdiction under Section 130 of the Customs Act, 1962 to revise the clearance order.
6. Compliance with principles of natural justice and burden of proof.
7. Refund of duty under Section 27(3) of the Customs Act, 1962.

Detailed Analysis:

1. Legality of the Re-opening of the Order Permitting Clearance of Imported Goods:

The petitioners challenged the re-opening of the clearance order by the Customs Authorities. The court noted that the initial clearance was given based on the classification of the goods as "stainless steel angles." However, subsequent information indicated that the goods were mis-declared, leading to their seizure and re-examination. The court upheld the re-opening as it was based on new evidence suggesting mis-declaration, thus justifying the re-opening under Section 130 of the Customs Act.

2. Classification and Validity of the Import Licenses for the Imported Goods:

The petitioners argued that their import licenses covered "stainless steel angles" and that there was ambiguity in the classification. The court examined the opinions of experts and the Central Government's findings, which concluded that the imported goods were "stainless steel sheets" and not "angles." The court held that the import licenses did not cover the imported goods, thus invalidating the clearance.

3. Confiscation of the Goods under Section 111(d) of the Customs Act, 1962:

The court analyzed Section 111(d) of the Customs Act, which provides for confiscation of goods imported contrary to any prohibition. It was found that the import licenses did not cover the goods, making their importation contrary to law. The court upheld the confiscation, stating that the goods were imported in violation of the Import Control Order, 1955, and thus liable for confiscation under Section 111(d).

4. Imposition of Redemption Fine and Personal Penalty:

The Central Government reduced the redemption fine to Rs. 10,00,000 and did not impose a personal penalty. The petitioners contended that no fine should be imposed due to the ambiguity in classification. The court, however, upheld the imposition of the redemption fine, noting that the goods were mis-declared and the import licenses did not cover them. The reduction in fine was seen as a consideration of the facts but did not negate the violation.

5. Jurisdiction under Section 130 of the Customs Act, 1962 to Revise the Clearance Order:

The petitioners argued that the Collector of Customs acted without jurisdiction in revising the clearance order. The court clarified that Section 130 empowers the Board to call for records and examine the legality or propriety of any decision. The Collector's action of re-examining the clearance order based on new evidence was within jurisdiction. The court upheld the revisional powers, allowing for additional material to be considered to rectify any illegality or impropriety in the original order.

6. Compliance with Principles of Natural Justice and Burden of Proof:

The petitioners asserted that the Customs Authorities had to prove their case beyond reasonable doubt, as the proceedings were quasi-criminal. The court referenced the principles laid down in Amba Lal v. Union of India, stating that the burden of proof lies with the Customs Authorities. The court found that satisfactory evidence was adduced to prove the mis-declaration and violation of import restrictions, thus meeting the burden of proof required in such cases.

7. Refund of Duty under Section 27(3) of the Customs Act, 1962:

The petitioners sought a refund of the difference in duty paid. The court noted that under Section 27(3), a refund could be granted without a claim if it results from an order passed in appeal or revision. However, since the petitioners did not lodge a claim within the statutory period, and no circumstances warranted relaxation of the time limit, the court denied the refund.

Conclusion:

The court partially allowed the petitions, upholding the confiscation of goods and the imposition of a redemption fine while rejecting the claim for a refund of duty. The court emphasized the legality of the re-opening of the clearance order, the proper exercise of revisional jurisdiction, and the adherence to the burden of proof by the Customs Authorities. The parties were directed to bear their own costs.

← Previous Next →