9911796707
TMI Blog1988 (11) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... 83.660 MT of iron rods contained in 2456 bundles. Approximately 1080.110 MT of the imported material had crossed over to Birgunj, Nepal, via Raxaul in India and necessary endorsements in respect of the same were made in the relevant CTD. 103.5 MT of the material, which was entrusted to a public carrier, did not cross-over to Nepal, as the public carrier failed to deliver the goods even after bringing the same to Raxaul. The delinquency of the public carrier was brought to the notice of the Police at Raxaul by the importer, NTL. Recovery of these goods and imposition of penalty on a portion of the recovered goods and confiscation of other portion of the goods by the Customs Authorities have led to the above-referred Appeals. By these appeals the appellents contend that : (i) The fine of Rs. 1 lac in lieu of confiscation in respect of 34.416 MT of the said goods which were covered by the Department, is illegal. (ii) The ex-parte adjudication in respect of 6.6 MT of the imported goods which were recovered by the Department and absolutely confiscated, should be set aside and the sum of Rs. 40,000/- kept in deposit with the Department, in pursuance of the Order of the Hon ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial quantity of goods were continuing to remain in the custody of the said M/s. North Eastern Roadways, Raxaul ? (vii) As can be seen from the reasons for my finding in the Adjudication Order No. 3-Cus/83 dated 3-2-1983, the goods of the description seized are iron rods of foreign origin as is clearly borne out by the markings on the rods ; it will also appear from the order passed by Shri R.K. Sharma, Assistant Collector of Land Custom, Raxaul, that on physical examination of samples and stocks kept in the custody of M/s. North Eastern Roadways, Raxaul, I feel satisfied and have come to this conclusion that the above consignment of 6.6 MT iron rods in question is the part of the consignment covered under CTD No. S 51-4040/81A dated 29-5-81 which were transported by Messrs Srestha Byabasy, Raxaul, from Calcutta to Raxaul . Thus, it can be safely inferred that the goods imported by the Appellants were visually identifiable at all stages. Hence, the question arises as to why the Department found it necessary to effect a seizure of the said quantity of 6.6 MT of iron rods on 21-8-1982 and feigned ignorance of the ownership thereof, purportedly proceeded to issue a Claimant-cum-S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entrustment on record. (xii) There is no Seizure List or Panchnama in record to uphold the story in respect of the purported seizure on 21-8-1982. (xiii) Assuming but not admitting that there was a seizure of the quantity of 6.6 MT on 21-8-1982 and assuming further that the same quantity was also made over to M/s. North Eastern Roadways, Raxaul, for their Safe custody, there is nothing in the record to show that the quantity was properly weighed before the customs was purportedly made over. (xiv) Although a reference was made to a purported Seizing officer s Report dated 24-8-1982, the same was neither made available to the Appellants in the Departmental Representative s paper book nor supplied to the Ld. Court at the time of hearing. (xv) The purported Claimant-cum-Show Cause Notice dated 6-1-1983 was also not made available either to the Appellants or to the Court. As far as the Order of adjudication dated 6-11-1986 is concerned, from which the Appeal No. 58 of 1987 arises, it was submitted that prima facie the entire exercise pertaining to the so-called seizure of 7.3 MT iron rods from the custody of M/s. North Eastern Roadways, Raxaul, is illegal and vitiated by mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation or inquiry worth its name was conducted. The cursory manner in which the order has been passed betrays that the Adjudicator was the victim of prejudice. In view of the fact that in a similar situation the Hon ble Patna High Court had issued certain guidelines and directions, it was obligatory for the Learned Adjudicator to have caused an inquiry and investigation before he could issue any order in respect of the said quantity of 7.3 MT or iron rods. (v) The validity or otherwise of the act of the so-called seizure on 7-6-1986, was not taken into consideration and the departmental action was taken to be sacrosanct. POINTS OF LAW IN GENERAL (1) Section 111 has no application as the same concerns itself only with improperly imported goods . In the instant case, goods were brought from a place outside India by the Appellants in accordance with proper and valid import licences granted by His Majesty s Government of Nepal and the same were put in the process of transmission from the Indian Port to Nepal in due compliance with the provisions of the Treaties between India and Nepal. (2) The act of importation, as aforestated, cannot be stated to be contrary to any prohib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the provisions of Treaty on Trade and Transit between the Government of India and Government of Nepal are clearly violated , as has been done by the Respondent (page 93 of the paper book in Appeal No. C 57/87-Cal-836A). (7) Although the provision of Section 3(1) of the Imports and Exports (Control) Act, 1947 has been invoked in both the Adjudication Order No. 15/Cus., dated 20-4-1983 and No. 3/Cus., dated 3-2-1983, it is not seen as to how the matter in issue may be within the mischief of this Section without any order/notification making provision for prohibiting, restricting or otherwise controlling the importation of the said goods which were involved in the Adjudication orders, especially in the facts and circumstances pertaining to the instant cases. Curiously, the Adjudication Order No. 3/Cus., dated 3-2-1983, in its concluding lines, also refer to and rely upon the Government of India, Ministry of Finance, Notification No. 76-Cus/85, dated 19-6-1985 which only deal with goods which have been exported to Nepal from countries other than India and only prohibits/restricts import from Nepal to India . (8) Evidently, the line of reasoning followed in the Adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [now Section 111(d)] is quasi-judicial and the Customs Authority has the duty to act judicially in deciding the question as to confiscation and imposition of penalty. The discretion vested upon the Adjudicator must be exercised judicially and not arbitrarily. The Collector must decide in each particular case if there were circumstances which would call for the drastic punishment of confiscation. If there was a case in which discretion should have been exercised in favour of the Importer, then the Adjudicator has the responsibility of ensuring that it was so done. The Adjudicating Collector must always remain conscious and aware of the fact that he is vested with judicial discretion and must give a reason as to why the drastic punishment of confiscation should be imposted. [See Leo Roy Fray v. Superintendent, District Jain, Amritsar, AIR 1958, SC 119 and also Rikabdass Bhavarilal v. Collector of Customs, Madras - (1961) 2 MLJ 443 at P 448]. (10) The intent either to defraud the Government of any duty payable or to evade the restriction in force with respect to imports must be proved in order to bring the Appellants within the mischief of the Customs Act. It seems obvious that g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are smuggled. Such belief is a matter for the subjective satisfaction of the officer but the Court may consider whether the belief entertained was reasonable or not. In the case of Krishna Iyer v. Assistant Collector of Central Excise, Kozhikode, reported in Kerala Law Times at pp 901, 903, the circumstances which attended the seizure were found to be of considerable relevance. (13) The impugned orders or Adjudication offend the terms and the tenor of Sections 13 and 23 of the Customs Act, 1962. (14) Section 11 of the Act entitles the Central Government to prohibit importation or exportation of goods for the purposes stated in sub-section (N) thereof. Clause (r) of sub-section (ii) of the said Section states that the implementation of any Treaty, agreement or convention with any country is one of the said purpose. In the instant cases, the Department has not pleaded or proved the existence of any such prohibition in respect of the goods in issue and hence there is no question of violation of the provisions of S. 11 of the Act, as held in the Adjudication Order No. 15-Cus., dated 20th April, 1983. (15) The findings in the impugned adjudication order mulitates against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arings and had prayed that the same should not be considered for the purpose of Adjudication. The Appellants, however, state that if there was an ex-parte Adjudication on 31-12-1982 in respect of goods belonging to the Appellants, and the said goods were released upon adjudication then there was all the more reason for the department to have acted on the same principle and to have released the goods subsequently seized. In any event, no copy of the said letter dated 1/15-1-1985 was given to the Appellants and only an extract therefrom was handed over at the time of hearing. (19) On 5-7-88 the learned Departmental Representative introduced another letter dated 21-6-1986 and gave a copy of the same to the Appellants Advocate inside the Court Room. Without prejudice to the admissibility of the said letter in evidence, a detailed comment on the contents of the said letter dated 21-6-1986 is hereto annexed marked with the letter A . (20) The ratio laid down in the learned Tribunal s Judgment in CD(Cal.) Appeal No. 74 of 1983 filed by M/s. Dolphin Laboratories, Calcutta against the Collector of Customs, Calcutta, decided on 14th November 1986 is totally relied upon regarding the non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igence on the part of the Customs Authorities. The Ld. J.D.R., Shri Jain, submitted in the main as under :- (1) A consignment of 2456 bundles (1183.668 MT gross weight and 1181.340 MT net weight) was despatched from Calcutta to M/s. N.T.C. Ltd., Kathmandu vide C.T.D. No. S 51-4040/81A dated 3-7-1981. The whole consignment reached Raxaul by 3-10-1981 and started to be despatched to Kathmandu from 25-11-1981. In the last there was a balance of 207 bundles. (2) The Sr. Superintendent Land Customs Raxaul issued Notice C. No. 2085 dated 29-6-1982 to M/s. N.T.L. with a copy to M/s. Shresatha Bryabasay Transporting Co. of Raxaul and directed the Seizing officer to take over the said goods in custody. Accordingly the Seizing officer visited the office of the Transport Co., Raxaul on 30-6-1982 but found closed. On enquiry from the neighbourers about the whereabout of the person Sri Suresh Prashad who is looking after the Transport Co., but nobody could give correct whereabout of the said person. Finding no other way, he called for two independent respectable persons of the locality and pasted the Notice No. 2085 of 29-6-1982 at the door of the office of the Transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prayer of the appellant we have no objection if the case is remanded for de novo examination. Appeal No. CD(Cal.)-58/87. (7) M/s. National Trading Ltd., Kathmandu had come for release of 6.6 MT of Iron rod on 5-3-1986 in terms of Assistant Collector s order-dated 14-6-1985 mentioned above. The said consignment was ordered to be released as the appellant had paid the deposit of Rs. 40,000. (8) It may be mentioned that Assistant Collector in charge wanted to get the goods physically weighed before release and surprisingly he found that net weight of goods lying with the custodian is 13.950 MT instead of 6.600 MT. The reasons stated for the difference was that it was for the first time on 5-3-1986 that there was a physical weighment of a part of this consignments. After allowing 6.6 MT (6618 KG) to be exported the rest 7332 KG was seized on 7-3-1986. (9) Claimant-cum-show-cause notice dated 22-3-86 was issued. National Trading Ltd. claimed the ownership of the subject goods i.e. 7332 KG of Iron rod, Additional Collector rejected claim of National Trading Ltd. on the ground that the petitioner failed to substantiate their claim. They could not correlate the goods with the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods found by them in the open field near the local hospital related to the above CTD issued in favour of the appellants. The entire proceedings including the show cause notice, the appellants submissions to the original authorities and the Ld. Adjudication Officer s findings proceed on that basis. Even at the Tribunal stage this position that the goods related to the above CTD has been maintained and admitted by both the sides. 13. In view of this common premise about the bare facts a question arises whether this matter is covered by the provision of the Customs Act or of Indo-Nepal Treaty alone or by both. 14. In this connection, we find that a CTD is filed in respect of Nepal Cargo and is endorsed by Indian Customs in terms of the Indo-Nepal Treaty of Trade Transit, 1978 and the procedure prescribed under the said treaty is required to be followed in respect thereof. 15. Further, in order to ensure proper implementation of the conditions of the treaty it has been provided in the memorandum to the said treaty (vide clause 9 thereof) that the goods shall be covered by an insurance policy/or such legal bindings, undertaken to the satisfaction of the Collector of Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms suitably, so that the latter could initiate necessary action. 20. Indeed, it also appears from a document filed by the Deptt. called as show-cause notice for non-accountal of the goods covered by CTD No. S 51-4040/81A dated 3-7-1981 on contravention of the provisions of the treaty of transit between the Govt. of India and H.M.G. of Nepal dated 20-2-1985 that the matter had been brought to the notice of the Calcutta Customs and we were informed by the Ld. J.D.R. that action with reference to the same was still pending. This document has been referred to by us merely to show that our above analysis finds support in the departmental action itself). 21. Under the circumstances the question remains is as to whether the goods which had not been transited to Nepal within the prescribed period of time were rendered liable to confiscation under the Customs Act, 1962 and, if so, under which provision ? 22. In this connection we will like to reiterate and emphasise that (as admitted by both the sides) the goods are covered by the Indo-Nepal Treaty. 23. In order to bring implementation of any provision of this treaty (or of any International Treaty or protocol for that matter) wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is null and void. 30. Even otherwise, the order is apparently based on assumption and presumption only and not sustainable in law. 31. The sum and substance of it all is that the matter only required condonation of delay caused due to reasons which have been satisfactorily explained by the appellants and there was no cause for confiscation and no authority to impose fine. 32. In view of the above discussion the order is set aside and the appeal is accepted. 33. In so far as the appeal No. CD(T)Cal-57/87 is concerned, we find that it relates to the so-called seizure of 6600 KG of Iron rods of foreign origin from a field near Duncun Hospital. 34. It is interesting to note that in this case also the Deptt. had the information that the goods were imported by N.T.L. of Nepal and were covered by CTD. 35. The date of the so-called seizure has been shown as 1-7-1982 at one place and 21-8-1982 at another place. We are using the words so-called deliberately because the Deptt. has not been able to show that any seizure was indeed effected either on 1-7-1982 or on 21-8-1982. Perhaps, the date 1-7-1982 although mentioned in this case also relates to the seizure made and discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the consignment covered by the CTD S 51-4040/81A dated 29-5-1981 (the correct dt. should be 3-7-1981) which was transported by M/s. Surestha Babasaya, Raxaul, through Calcutta to Raxaul and, therefore, he released the quantity to consignee, M/s. National Trading Ltd., Kathmandu, i.e. the Appellants on their furnishing bank guarantee of Rs. 40,000/-. 42. The Ld. departmental representative has pleaded that in view of this finding the matter may be remanded. 43. A question, however, arises as to whether the remand would serve any purpose, once the department had itself came to the conclusion that the goods belonged to the appellants and were relatable to a particular CTD and the goods had already been allowed to go across the border. 44. Furthermore, since these goods had also been imported by N.T.L., Nepal in accordance with provisions of the Indo-Nepal Treaty and were covered by CTD prescribed thereunder, therefore, the legal position in this case was the same as in the previous one and our observations in para 21 to 25 (supra) were equally applicable. 45. In fact, except for delay in transporting the goods to Nepal (beyond the time allowed in the CTD) no other inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the department has described its action as recovery and seizure but no panchnama appears to have been drawn and, if any case, none has been produced. 50. Of course, the correct position in law was that the department s action did not amount to recovery or seizure and, no panchnama was really necessary for merely taking over the goods from the department s own custodian. 51. Further, the so-called claimant notice mentions that these goods were unclaimed; whereas the order-in-original itself shows that they were noticed at the time the appellants went to take delivery of the 6.600 MT from the Customs at the premises of M/s. North Eastern Roadways and the appellants have stated that they had immediately claimed these goods. Under the circumstances, it was incorrect to describe the goods as unclaimed. 52. In any eventuality, the appellants had responded to their claimant notice and made their submissions and it is not clear from the order of the Addl. Collector as to whether he found their claim unacceptable. Such goods had been described in the previous proceedings as those capable of visible identification and the Asst. Collector had satisfied himself in the previous ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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