1962 (7) TMI 1 - HC - Customs

Summary

Issues Involved:
1. Validity of the impugned order based on the principles of natural justice.
2. Legitimacy of parallel proceedings under Section 167(8) of the Sea Customs Act and Section 5 of the Imports and Exports (Control) Act.
3. Whether the petitioners could be found concerned in the importation of contraband goods seized outside the customs barrier.

Detailed Analysis:

1. Validity of the Impugned Order Based on the Principles of Natural Justice:
The petitioners contended that the impugned order was vitiated as it was not based on any proper enquiry or legal evidence, thus violating the principles of natural justice. They argued that the Customs Collector failed to properly consider the allegations that the statements were not voluntary and were extracted under duress. The Court noted that the Customs Collector's order lacked a detailed examination of the voluntariness and truthfulness of the statements. The Collector merely stated that he had "carefully examined the case in all its aspects," which the Court found insufficient. The Court emphasized that when serious allegations are made regarding the voluntariness of statements, the adjudicating authority must make a full and honest attempt to examine these allegations and provide reasons for their findings. The failure to do so led the Court to quash the Collector's order.

2. Legitimacy of Parallel Proceedings:
The petitioners argued that being proceeded against departmentally and criminally on the same facts was improper as it could lead to conflicting findings and involved the Customs Collector acting as both prosecutor and judge. The Court rejected this contention, stating that the offences under Section 167(8) of the Sea Customs Act and Section 5 of the Imports and Exports (Control) Act are of different natures with different penalties. The Court clarified that the proceedings under the Sea Customs Act are not criminal in nature, unlike those under the Imports and Exports (Control) Act. It further noted that Section 5 of the Imports and Exports (Control) Act explicitly allows for parallel proceedings, indicating that the legislature intended for both proceedings to occur simultaneously. Thus, the Court found no issue with the parallel proceedings and the role of the Customs Collector.

3. Concern in the Importation of Contraband Goods Seized Outside the Customs Barrier:
The petitioners contended that since the 32 watches were seized outside the customs barrier, they could not be found concerned in the importation of the contraband goods. The Court rejected this argument, stating that the offence of being concerned in the importation of goods is not nullified merely because the goods were seized outside the customs frontier. The Court emphasized that the petitioners had admitted to importing the goods against prohibition, and such an admission was sufficient to hold them concerned in the importation, regardless of where the goods were seized. The Court referred to previous judgments to support the interpretation that being concerned in importation includes arranging for the importation or receiving the goods after importation.

Conclusion:
The Court quashed the order of the Customs Collector imposing personal penalties on the petitioners due to the failure to properly consider the voluntariness and truthfulness of the statements. The Court upheld the legitimacy of parallel proceedings under the Sea Customs Act and the Imports and Exports (Control) Act and rejected the argument that seizure outside the customs barrier negated the offence of being concerned in the importation of contraband goods. The petitions were allowed, and the rules nisi were made absolute to the extent of quashing the personal penalties.