1972 (3) TMI 33 - HC - Customs

Issues Involved:

1. Validity of the order under Section 167(8) of the Sea Customs Act, 1878.
2. Compliance with the rules of natural justice.
3. Delay in filing the writ petition.
4. Identification of samples with imported goods.
5. Imposition of penalty under Section 167(8) versus Section 167(37) of the Sea Customs Act, 1878.
6. Request for reconsideration by the Central Board.

Issue-wise Detailed Analysis:

1. Validity of the order under Section 167(8) of the Sea Customs Act, 1878:
The petitioners argued that there was no notice issued under Section 167(8) of the Sea Customs Act, 1878. The notice was restricted to Section 167(37), which was evident from the contents of the notice dated 21st March, 1950. The Collector of Customs imposed a penalty under Section 167(8) during the adjudication stage without prior notice, which the petitioners were not called upon to meet. The court found this to be a mere technicality if it did not impact the case's facts.

2. Compliance with the rules of natural justice:
The petitioners contended that the entire proceedings were based on a chemist's report, which was never provided to them, leading to non-compliance with the rules of natural justice. The court cited a similar case (Assistant Collector of Customs v. Soorajmull Nagarmull, A.I.R. 1952, Calcutta 656) where the withholding of a test report was deemed a failure to follow the elementary rule of natural justice. The court concluded that the petitioners were denied an opportunity to be heard, thus quashing the adjudication order.

3. Delay in filing the writ petition:
The writ petition was filed in 1952, but due to jurisdictional issues, it was delayed. The petitioners initially filed a writ in the Calcutta High Court, which was later found to lack jurisdiction by the Supreme Court. The court acknowledged the delay but attributed it to the petitioners' legitimate contesting of jurisdiction in the Calcutta High Court.

4. Identification of samples with imported goods:
The petitioners sought a re-test of fresh samples drawn in their presence to identify the samples with the imported goods. The Customs authorities did not draw fresh samples, and the re-test was conducted on remnants of previous samples. The court agreed with the petitioners that the rules of natural justice required the identification of the report with the goods involved, necessitating samples drawn in the petitioners' presence.

5. Imposition of penalty under Section 167(8) versus Section 167(37) of the Sea Customs Act, 1878:
The court held that the requirements of Section 167(8) are infringed only when prohibited goods are imported. Mis-description of goods, as in this case, would involve a penalty under Section 167(37) and not Section 167(8). The court concluded that imposing a penalty under Section 167(8) was not justified in the circumstances of this case.

6. Request for reconsideration by the Central Board:
The petitioners were denied the test reports, and fresh samples were not taken in their presence. The court found this to be a breach of the rules of natural justice, entitling the petitioners to a writ. The court rejected the plea for reconsideration by the Central Board, citing the extensive delay and the absence of test reports. The court quashed the orders dated 20th September, 1950, and 8th April, 1952, and ordered a refund of the penalty paid by the petitioners. There was no order as to costs.

Conclusion:
The court quashed the orders due to non-compliance with the rules of natural justice and the improper imposition of penalties under Section 167(8) of the Sea Customs Act, 1878. The petitioners were entitled to a refund of the penalty paid.

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