1971 (11) TMI 54 - HC - Customs

Summary

Issues:
1. Validity of the order of confiscation of goods by the Collector of Central Excise.
2. Applicability of the Customs Act, 1962, in a case where action was initially taken under the Sea Customs Act, 1878.

Analysis:

Issue 1: Validity of the order of confiscation of goods by the Collector of Central Excise
The petitioner challenged the order of confiscation of press buttons by the Collector of Central Excise, contending that there was no evidence to prove illicit importation of the goods. The Collector concluded that the press buttons were contraband imported without a necessary license, based on the petitioner's failed proof of purchase. However, the court held that the burden of proof in such cases lies on the Customs authorities, not the petitioner, as established by legal precedents. The Collector's decision was deemed unsustainable as he failed to consider the prohibition or restriction extent before drawing conclusions on the goods' importation legality.

Furthermore, it was revealed that the press buttons in question were not prohibited from import at the relevant time, as per Import Trade Control policy books. The petitioner's claim of purchasing the buttons from a specific company in Pondicherry was dismissed by the Collector, who found no such company or road. The court emphasized that the Collector's inference of illicit importation solely based on the petitioner's unproven purchase claim was unjustified. The legal burden to establish smuggling was on the Customs authorities, which the Collector failed to meet, rendering the order of confiscation invalid.

Issue 2: Applicability of the Customs Act, 1962, in a case initially under the Sea Customs Act, 1878
The petitioner argued that since the initial action was taken under the Sea Customs Act, 1878, which was replaced by the Customs Act, 1962, the Collector should have proceeded under the new Act within six months of the court's judgment quashing the previous order. However, the court rejected this argument, citing Section 160(4) of the Customs Act, 1962, which applies to goods under Customs control at the Act's commencement. The court clarified that the Collector's issuance of fresh show cause notices post the quashed order was a continuation of the previous proceedings and not affected by the change in Acts. The action taken under the 1878 Act was deemed valid, as the Collector's subsequent actions were considered in line with legal provisions, thus upholding the Collector's authority to issue show cause notices under the prevailing law.

In conclusion, the court allowed the writ petition, quashing the impugned order of confiscation due to lack of evidence and improper legal reasoning by the Collector of Central Excise. The court clarified the burden of proof in smuggling cases and affirmed the Collector's authority to proceed under the Customs Act, 1962, despite initial action under the Sea Customs Act, 1878.