2021 (12) TMI 1025 - HC - Customs

Disposal of the goods imported by the petitioner - Import of Dates - Country of origin - Goods were seized on the ground of evasion of duty - Jurisdiction of criminal court for issuing direction for disposal of goods are which are perishable in nature and kept in the custody of the respondent in accordance with the Disposal Manual 2019 - HELD THAT - The Customs Act provides for a comprehensive framework governing the import and export of goods, articles into the country with an objective to curb smuggling of goods into the country through seaports and airports. The Customs Act is a complete code in itself and it being a special legislation, it has its own powers, procedures, rules and mode of operation including the powers of arrest, investigation, examination of persons, inspection, seizure, confiscation, adjudication, imposition of penalty, appellate mechanisms, the settlement commission. These reasons in itself confer vast powers on the customs department for it being a statute which aims at preventing the proliferation of a parallel economy which is askew from the normal economy and which allows the spreading of all illegal and banned activities including terrorism, illegal money transfers, trafficking of vulnerable groups and the derailment of the normal economy thereby shifting the balance of demand and supply and creating an artificial shortage or excess of goods. While dealing with the Foreign Exchange Regulation Act, the Supreme Court in CBI V. State of Rajasthan, 1996 (7) TMI 461 - SUPREME COURT , held that the Foreign Exchange Regulation Act was a self-contained code which was governed by its special trappings and that a police officer could not make an application under Section 155(2) CrPC to the Chief Judicial Magistrate to obtain permission to investigate offences committed under the FERA. A perusal of the disposal manual does not indicate that provision under Section 451 Cr.P.C can be invoked for disposal of the goods confiscated under the Customs Act. This Court does not find any reason to differ from the view expressed in Directorate of Revenue Intelligence V. M/s PRK Diamonds Pvt. Ltd. 2019 (5) TMI 88 - DELHI HIGH COURT where it was held that the goods confiscated under the Customs Act cannot be disposed of under Code of Criminal Procedure. Petition allowed.

Summary

Issues Involved:
1. Jurisdiction of the Criminal Court under Section 451 CrPC for disposal of goods seized under the Customs Act.
2. Applicability of the Customs Act as a self-contained code.
3. Validity of the disposal of perishable goods as per the Disposal Manual 2019.

Detailed Analysis:

1. Jurisdiction of the Criminal Court under Section 451 CrPC:
The petitioner contended that the Ld. Chief Metropolitan Magistrate (CMM) did not possess the jurisdiction to pass an order for the disposal of imported goods under Section 451 of the CrPC. The petitioner argued that the Customs Act is a self-contained code with its own special powers, procedures, and regulations, making the provisions of the CrPC inapplicable. The petitioner cited Hardeep Singh v. State of Punjab, AIR 2014 SC 1400 to distinguish between 'inquiry' and 'investigation' under CrPC, arguing that Section 451 CrPC could only be invoked during a trial or pending inquiry. The petitioner also referenced Directorate of Revenue Intelligence V. M/s PRK Diamonds Pvt. Ltd, (Crl. MC No. 4316/2016), where it was held that goods confiscated under the Customs Act cannot be disposed of under the CrPC.

2. Applicability of the Customs Act as a Self-Contained Code:
The Customs Act provides a comprehensive framework governing the import and export of goods, aiming to curb smuggling and prevent the proliferation of a parallel economy. The Act includes provisions for arrest, investigation, inspection, seizure, confiscation, adjudication, and imposition of penalties. The court referenced CBI V. State of Rajasthan, (1996) 9 SCC 735, which held that the Foreign Exchange Regulation Act (FERA), being a special legislation, was a self-contained code, and its provisions would prevail over the CrPC. Similarly, the Customs Act, being a special legislation, has its own comprehensive provisions, making the CrPC inapplicable for matters covered under the Customs Act.

3. Validity of the Disposal of Perishable Goods as per the Disposal Manual 2019:
The respondent argued that the disposal of the goods was done in accordance with the Disposal Manual 2019, which mandates the procedure for disposal of perishable goods. The Manual categorizes goods that need immediate disposal due to their short shelf-life. The court noted that the Disposal Manual 2019 lists items such as fresh fruits, vegetables, and other perishable goods that require immediate disposal after seizure. The court found that the disposal manual does not indicate that Section 451 CrPC can be invoked for the disposal of goods confiscated under the Customs Act.

Conclusion:
The court concluded that the Customs Act, being a special legislation, provides a complete code for the search, seizure, confiscation, and adjudication of contraband goods. The provisions of the CrPC, including Section 451, do not apply to the disposal of goods seized under the Customs Act. The court relied on the judgment in Directorate of Revenue Intelligence V. M/s PRK Diamonds Pvt. Ltd. and found no reason to differ from its view. Consequently, the petition was allowed, and the order dated 16.02.2020, passed by the Ld. Metropolitan Magistrate, Patiala House Court, was quashed and set aside.