1957 (5) TMI 1 - SC - Customs

Redemption fine Confiscation Penalty Natural justice Fine and penalty Imposition is a quasi-judicial function

Issues Involved:
1. Validity of the import license requirement.
2. Legitimacy of the confiscation order without an option to pay a fine.
3. Alleged violation of Article 14 of the Constitution.
4. Claims of mala fide actions by Customs authorities.
5. Timeliness of the appeal to the Central Board of Revenue.

Issue-wise Detailed Analysis:

1. Validity of the import license requirement:
The petitioner, an importer, argued that the goods (Zip Chains) were covered under a notification dated March 16, 1953, which allowed the import of certain goods without a license. However, the Customs authorities found that the petitioner did not possess a valid import license for the goods and initiated confiscation proceedings under Section 167, Item 8 of the Sea Customs Act. The petitioner conceded that he could not challenge the Customs authorities' decision that the goods were not covered by the notification in this application.

2. Legitimacy of the confiscation order without an option to pay a fine:
The petitioner contended that the order of confiscation was invalid as it did not provide an option to pay a fine in lieu of confiscation, as required by Section 183 of the Sea Customs Act. However, Section 3(2) of the Imports and Exports (Control) Act, 1947, modifies Section 183 by substituting "shall" with "may," giving the Customs authorities discretion to offer a fine instead of making it mandatory. The Court held that the order of confiscation was valid even without providing an option to pay a fine because the modified Section 183 did not make it obligatory.

3. Alleged violation of Article 14 of the Constitution:
The petitioner argued that the modification of Section 183 by Section 3(2) of the 1947 Act left uncontrolled discretion to the Customs authorities, offending Article 14 of the Constitution. The Court rejected this argument, stating that Section 3(2) of the 1947 Act only makes certain provisions of the Sea Customs Act applicable and does not itself grant discretion. Even if Section 183, as modified, was assumed to offend Article 14, it would become ultra vires and irrelevant to the confiscation order, which was made under Section 167, Item 8 of the Sea Customs Act.

4. Claims of mala fide actions by Customs authorities:
The petitioner claimed that the confiscation order was made mala fide and ex parte. The Court found that the petitioner was given an opportunity for a personal hearing, which he declined, expressing confidence in the authorities. The Court also dismissed the claim that the petitioner was not informed about other transactions considered by the Customs authorities, as the notice to show cause included the possibility of confiscation without an option to pay a fine. The Court found no evidence of mala fide actions or personal vendetta by the Customs authorities.

5. Timeliness of the appeal to the Central Board of Revenue:
The petitioner filed an appeal to the Central Board of Revenue, which was dismissed as time-barred. The Court noted that the appeal was posted on May 4, 1954, but the time to file expired on May 1, 1954. Even considering the posting date, the appeal was out of time. The petitioner's claim that his arrest on May 1, 1954, was to prevent him from filing the appeal was rejected as he had ample time from February 3, 1954, to May 1, 1954, to file the appeal. The Court found no merit in the claim that the appeal was timely or that the arrest was wrongful.

Conclusion:
The application was dismissed with costs, as the Court found no merit in the petitioner's contentions regarding the confiscation order, the alleged violation of Article 14, claims of mala fide actions, or the timeliness of the appeal.

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