1986 (10) TMI 234 - AT - Customs

Summary

Issues Involved:
1. Legality of the acquisition of goods by Shri S.N. Lihala and Shri S.K. Lihala.
2. Confiscation and penalty imposed by the Addl. Collector of Customs.
3. Claims of ownership by Shri Kashi Nath Panda.
4. Procedural lapses by the Addl. Collector of Customs.

Issue-wise Detailed Analysis:

1. Legality of the acquisition of goods by Shri S.N. Lihala and Shri S.K. Lihala:
Shri S.N. Lihala and Shri S.K. Lihala contended that they had legally acquired the goods from Steamer Agents, Lional Edwards Ltd., and had completed all necessary formalities, including obtaining a CCP and preparing a Bill of Entry. They argued that the goods were cleared from Customs control and thus were not liable for confiscation or penalty. They emphasized that the Addl. Collector had not considered all relevant facts, such as the number of cartons, the weight, and the ship's name and rotation number, which were crucial for determining the duty and verifying the legality of the acquisition.

2. Confiscation and penalty imposed by the Addl. Collector of Customs:
The Addl. Collector confiscated the goods and imposed a penalty based on the Port Trust Out-turn Reports, which showed marks and numbers as 'nil' for the excess un-manifested cargo. The Lihalas argued that the Addl. Collector had erroneously concluded that the goods were acquired illegally by not considering all relevant facts. The Tribunal observed that the Addl. Collector had not passed a speaking order and had ignored important indicators of identity and particulars valuable from the Customs point of view.

3. Claims of ownership by Shri Kashi Nath Panda:
Shri Kashi Nath Panda claimed ownership of the goods, stating that they were part of consignments imported by him. He argued that the Addl. Collector had proceeded without issuing any show-cause notice to him and without taking his submissions into account, despite being a necessary party. The Tribunal noted that the department had initiated action based on Panda's letter and that the marks and numbers on the cartons indicated the consignee as United Engineering Syndicate, of which Panda was the proprietor. The Tribunal emphasized that the department should have inquired into Panda's claim and that the Addl. Collector was duty-bound to record findings after observing necessary formalities.

4. Procedural lapses by the Addl. Collector of Customs:
The Tribunal found that the Addl. Collector had not followed due process and had not applied his mind to the matter. The Tribunal noted that the departmental officers and the Addl. Collector had ignored important aspects such as the ship's name, rotation number, weight of cartons, and length and breadth of the materials. The Tribunal also observed that the Addl. Collector had not taken into account the submissions of both the Lihalas and Panda, resulting in a defective order.

Conclusion:
The Tribunal concluded that the order of the Addl. Collector was bad in law and liable to be set aside. The Tribunal remanded the case back to the Addl. Collector for de novo adjudication in accordance with the law and prescribed procedures, taking into account all relevant facts and submissions of both parties. The Tribunal emphasized the necessity of following due process and ensuring that all relevant aspects are considered in the adjudication.