1988 (10) TMI 152 - AT - Customs

Summary

Issues Involved:
1. Confiscation of seized sewing machines.
2. Compliance with import conditions.
3. Jurisdiction of Customs Authorities to issue show cause notice.
4. Definition and applicability of "prohibited goods" under Customs Act.
5. Post-clearance jurisdiction of Customs Authorities.
6. Authority of Licensing Authority versus Customs Authorities.

Issue-wise Detailed Analysis:

1. Confiscation of Seized Sewing Machines:
The appellants were dissatisfied with the confiscation of 8 sewing machines and the imposition of a redemption fine of Rs. 1,76,000/-. The machines were seized under Section 110 of the Customs Act, 1962, as the appellants could not produce valid documents for their licit importation. The Collector of Customs ordered the confiscation under Section 111(o) of the Customs Act, 1962.

2. Compliance with Import Conditions:
The Industrial Sewing Machines were imported under Additional Licence No. P/W/2855239/83, which allowed the import of Capital Goods listed in Appendix 2 to the I.T.C. Policy April 1983 - March 1984. The import was subject to the condition that the goods would be disposed of to eligible Actual Users (Industrial) only, and information thereof would be sent to the Licensing Authority within 15 days. This condition was not complied with, leading to the confiscation of the goods.

3. Jurisdiction of Customs Authorities to Issue Show Cause Notice:
The appellants argued that once goods are cleared under Section 47 of the Customs Act, there is no scope for issuing a show cause notice, as it would amount to a revision of the clearance order. However, the tribunal held that Section 47 deals with the clearance of goods for home consumption, and the proper officer's order under this section does not oust the jurisdiction of Customs Authorities to confiscate goods if post-clearance conditions are violated.

4. Definition and Applicability of "Prohibited Goods" under Customs Act:
The term "prohibited goods" is defined under Section 2(33) of the Customs Act, 1962. The tribunal referred to the Supreme Court's interpretation in Sheikh Mohd. Omer v. Collector of Customs, which held that "any prohibition" includes all types of restrictions. Since the importation of the sewing machines was subject to conditions that were not met, the goods became "prohibited goods" liable to confiscation under Section 111(o).

5. Post-clearance Jurisdiction of Customs Authorities:
The appellants contended that once goods are cleared for home consumption, they cease to be "imported goods" and cannot be confiscated. The tribunal rejected this argument, stating that Section 111(o) speaks of "any goods" and not specifically "imported goods." The tribunal cited previous judgments, including N. Devidas & Co. v. Collector of Customs, which upheld the Customs Authorities' jurisdiction to confiscate goods even after clearance if conditions are violated.

6. Authority of Licensing Authority versus Customs Authorities:
The appellants argued that only the Licensing Authority could take action for breach of import conditions under the Imports and Exports (Control) Act, 1947. The tribunal held that the case involved the violation of import restrictions under the Customs Act, 1962, and not merely a breach of license conditions. Thus, the Customs Authorities were competent to confiscate the goods under Section 111(o).

Conclusion:
The tribunal found no substance in the appeal and upheld the confiscation of the sewing machines, rejecting all contentions raised by the appellants. The Customs Authorities were within their rights to confiscate the goods due to non-compliance with import conditions.