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Issues Involved:
1. Validity of proceedings due to the delay in issuing the show cause notice under Section 110(2) of the Customs Act, 1962. 2. Alleged contravention of the provisions of the Customs Act, 1962 and Imports & Exports (Control) Act, 1947 by the appellant. Detailed Analysis: 1. Validity of Proceedings Due to Delay in Issuing Show Cause Notice: The appellant argued that the show cause notice was not issued within the stipulated six months from the date of seizure, making the proceedings void and illegal. The appellant contended that the extension of time granted by the Collector on 5-2-1969 was void as it was done without following the procedure laid down under Section 110(2) of the Customs Act, 1962. The appellant further argued that the Collector did not have sufficient reason to extend the time and that the extension was granted without giving the appellant a hearing. The Supreme Court ruling in I.J. Rao, Asstt. Collector of Customs v. Bibhuti Bhushan Bagh was cited, which states that an extension of the time limit for issuing a show cause notice can be granted without a hearing only in rare cases where the person is evading service or for reasons beyond the control of the Customs authorities. However, in such cases, a post-decisional hearing must be afforded to the affected party to determine whether the extension should be cancelled. In this case, the Collector's order dated 5-2-1969 did not present any extenuating circumstances justifying the extension without a hearing. The Department did not claim that the appellant was evading service or that there were factors necessitating immediate action. Therefore, the extension order was deemed void, and the subsequent proceedings based on this order were invalid. The appellant was entitled to the return of the seized goods as per Section 110(2) of the Customs Act, 1962. 2. Alleged Contravention of Customs and Imports & Exports Laws: The appellant was accused of illegally importing goods in violation of Section 3(1) of the Imports and Export (Control) Act, 1947, and the Customs Act, 1962, leading to the confiscation of goods and imposition of a penalty. The appellant argued that they had produced nine bills on 9-9-1969 and 23 more bills at the time of the personal hearing, which were not adequately scrutinized by the authorities. The Collector observed that the bills/vouchers did not clearly indicate whether they related to the seized goods and that the seized goods were of foreign origin. However, the appellant contended that the onus of proof lay on the Department to show the contravention of the law, which the Department failed to discharge. The Department argued that the seizure was based on bona fide reasonable belief and that the appellant had not provided evidence of a valid import license. The appellant was neither an 'actual user' nor a licensed importer, and some of the goods were banned items that could only be imported under Baggage Rules. Upon review, it was found that the Collector did not investigate the bills produced by the appellant at the time of seizure and personal hearing. The failure to verify the appellant's claims regarding the bills/vouchers further invalidated the proceedings. Although the show cause notice did include an allegation of contravention under the Imports (Control) Order, 1955, the primary issue was the invalid extension of time for issuing the show cause notice. Conclusion: The appeal was allowed on the grounds that the show cause notice was not issued within the required six months, and the extension granted by the Collector was void. Consequently, the subsequent proceedings were deemed void and illegal, and the appellant was entitled to the return of the seized goods.
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