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2025 (1) TMI 1103 - AT - CustomsSmuggling of bike - Jurisdiction of DRI officers to issue SCN in view of the amendments made by the Finance Act 2022 - power of customs authorities at Hyderabad to adjudicate the case when the bike was said to have been smuggled through Kolkata port and got registered with RTA Raigad - challenge to SCN on the ground that Shri Sunil Lawrence has not been made a noticee at all - confiscation - redemption fine - penalty. Jurisidiction of Customs authorities in Hyderabad - HELD THAT - The appellant had produced a copy of Bill of Entry purported to have been filed in Kolkata Air Cargo complex which was found to be fake. There are no other legal documents to show how the bike was imported into India. Therefore it is inconceivable that Kolkata Customs will have any jurisdiction over this case. In fact in this case there is no proposal for assessment or demand of duty. The question of jurisdiction of the port will arise when goods are imported through a port and the duty has been assessed and the duty so assessed has to be modified. The property was registered in the name of the appellant by RTA Hyderabad. Therefore there are no reason to hold that any officer other than the officers of Hyderabad Customs will have any jurisdiction over to decide the matter. The only question is whether the bike was liable to be confiscated and whether the appellant was liable to pay penalty under section 112(b) or not. Here it is found in favour of the Revenue and against the appellant on the question of jurisdiction. Challenge to SCN on the ground that Shri Sunil Lawrence has not been made a noticee at all - HELD THAT - The identity of Shri Sunil Lawrence was also not known to the appellant and the person through whom the bike was purchased from Shri Sunil Lawrence is no more. So there was no way to find who Shri Sunil Lawrence was and where he lived and if he had smuggled the bike into India - the proposal is only to deprive the appellant of his property and therefore SCN was issued. The proposal was also issued to impose penalty on the appellant. The mere fact that some action has not been taken against any other person such as Shri Sunil Lawrence does not negate the validity of this SCN or the consequential orders. Confiscation - HELD THAT - It is clear from section 2(33) that prohibited goods under the Customs Act are only such goods whose import or export is prohibited and not those goods where the appropriate procedures have not been followed. The SCN refers to section 46 and 47 of the Customs Act. Section 46 requires the importer of any goods to file a bill of entry and section 47 provides for proper officer to issue out of charge on the bill of entry. Neither of these provisions deals with any prohibitions. While it is irregular and contrary to law to import goods i.e. bring goods into India from a place outside India without following the due processes such violations would not make the goods prohibited goods under the Customs Act. In fact if any goods are imported or attempted to be imported other than through the customs ports or airports or land customs station such goods will be liable for confiscation under section 111(b) of the Customs Act. Therefore in this case confiscation under section 111(d) cannot be sustained - Section 111(i) deals with goods which are found concealed in any package either before or after unloading thereof. There is no allegation that the bike in dispute was concealed in any manner let alone any evidence to this effect. In fact it was registered with the RTA Hyderabad in the name of the appellant. Therefore confiscation under Section 111(i) cannot be sustained - Section 111(j) deals with the goods which are removed or attempted to be removed from customs area or warehouse without permission of proper officer or contrary to the terms of such permission. In this case there is no evidence or allegation that the bike was removed from customs area without any permission. Therefore confiscation under Section 111(j) also cannot be sustained. None of the three clauses of section 111 under which the bike was confiscated apply. For this reason alone the confiscation of the bike needs to be set aside. Penalty - HELD THAT - Penalty under Section 112(b) which is dependent on goods being liable to confiscation under Section 111 also cannot be sustained - section 112(b) provides for penalty for knowingly carrying removing depositing harbouring keeping concealing selling or purchasing any goods. There is nothing in this case to show or establish that the appellant had any knowledge that the bike was liable for confiscation. At any rate once the confiscation under section 111 is set aside the penalty under section 112 also needs to be set aside. Conclusion - i) The property was seized from the possession of the appellant in Hyderabad. Therefore there are no reason to hold that any officer other than the officers of Hyderabad Customs will have any jurisdiction over to decide the matter. ii) None of the three clauses of section 111 under which the bike was confiscated apply. For this reason alone the confiscation of the bike needs to be set aside. iii) Once the confiscation under section 111 is set aside the penalty under section 112 also needs to be set aside. The impugned order set aside - appeal allowed.
1. ISSUES PRESENTED and CONSIDERED The core legal questions considered in this judgment include:
2. ISSUE-WISE DETAILED ANALYSIS Jurisdiction of Hyderabad Customs Authorities:
Confiscation under Sections 111(d), 111(i), and 111(j):
Liability for Penalty under Section 112(b):
Failure to Issue SCN to Original Importer:
3. SIGNIFICANT HOLDINGS
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