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TMI Blog1995 (10) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... a private company carrying on inter alia, the business of manufacture and sale of iron and steel products from its factory at Raigad (Maharashtra). Sh. Vinod Goel and Smt. Sujata Goel are the directors of both these companies. 3. On 16-1-1995, the officers of Marine and Preventive Wing of Customs (Preventive) Collectorate, Bombay visited the factory premises of M/s. Nikhil Alloy Steels Ltd. and noticed various items of foreign origin viz., Tyres, HDPE Granules, Compressors, Carbon Black etc. for which no documents could be produced by the company s representative and hence, these items were detained and handed over under Supratnama to the Manager of the Company on 19-1-1995. The office premises of M/s. Nikhil Alloy Steels and the residential premises of Sh. Vinod Goel were searched on 16-1-1995; various documents were recovered from the office and unexplained cash of Rs. 3 lakhs was also seized from the residence of Sh. Vinod Goel. During the course of further investigation, other premises were also searched and goods of foreign origin were seized. Further investigation revealed that Sh. Vinod Goel had informed his staff over the telephone, when the search operation was being car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees, prevented the early completion of the investigation in this case within the time limit laid down under Section 110 and since examination of Sh. Vinod Goel and one of his employee, Sh. K.K. Sharma who are alleged to be the main persons responsible for controlling/managing the smuggling racket, was essential for clarifying the position regarding the seized goods and other related issues which had arisen during the investigation, this was a fit case for extending the period for issue of show cause notice as provided for in the proviso to Section 110(2) of the Act. Hence this appeal. 8. Arguing on the question of maintainability of an appeal against an order passed under Section 110 of the Customs Act, 1962, Sh. R. Santhanam, learned Counsel for the appellants, submits that the order under challenge is an order passed by the Collector of Customs as an Adjudicating Authority, as the effect of the order is to deprive the appellants of their right to return of the seized goods in terms of the provisions of Section 110(2), and hence it is an order falling within the purview of Clause (a) of sub-section (1) of Section 129A. In support of this argument, he cites the following de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be sustained in law. The learned Counsel further contends that the Collector of Customs, Bombay has no jurisdiction in the matter since the seized goods were imported through Mangalore and had been assessed to duty at that place. 10. Regarding the finding of the Commissioner of Customs that Sh. Vinod Goel was absconding and he could not be examined, the learned Counsel draws our attention to an order dated 22-2-1995 passed by the Additional Collector of Customs, Mangalore from which it is apparent that Sh. Vinod Goel appeared in response to summons and tendered his statement before the Superintendent of Customs. Lastly, he submits that the order has been passed without consideration of the points raised by the appellants during the personal hearing and ignoring the case laws cited before him, thus, establishing non-application of mind on the part of the Collector and hence, the order requires to be set aside and seized goods directed to be released immediately to the appellants. 11. In reply to the arguments of the learned Counsel, Sh. T.R. Malik, learned DR contends that the order dated 23rd June, 1995 is not an order of adjudication as show cause notice has yet to be issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) E.L.T. 1477 (SC)], the Hon ble Supreme Court has held that right to restoration of the seized goods is a civil right which accrues on the expiry of initial six months and which is defeated on the extension being granted, even though such extension is possible within a year from the date of seizure (paragraph 15). The Hon ble Supreme Court has over-ruled the judgment of the Hon ble Calcutta High Court in the case of Sheikh Mohd. Sayeed v. Assistant Collector of Customs (AIR 1970 Cal. 134) holding that there is no indication in the Customs Act to state that the Collector is required to act judicially while passing an order of extension of period for issue of notice, on the ground that the proviso to Section 110(2) requires determination of facts and not on mere suspicion, and sufficient cause being made out by the applicant officer and also on the ground that the civil right of a citizen to the restoration of property on expiry of the period, whether initial or extended, is affected. The Supreme Court also did not follow the judgment of the High Court of Mysore in Ganeshmul Channilal v. Collector of Central Excise (AIR 1968 Mysore 89) to the effect that the power of extension under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n raised was that an opportunity to be heard should have been given to the petitioner. The learned Judge distinguished the decision of the Division Bench under this appeal (reported in AIR 1968 Cal. 28) on the ground that the question involved in that decision as whether an opportunity of being heard had to be given in respect only of an extension when the right to restoration of the goods in question has already accrued to the party from whom they were seized, and, therefore, the decision did not apply to the case before him when such a right had not vested in the petitioner. With respect to the learned Judge, the distinction was not correct, firstly, because the first order of extension was only assumed to be correct as the Division Bench concentrated its attention on the second order of extension which also involved the question of the right to restoration of the goods having already vested, and secondly, because the Division Bench set aside extension order on the ground that the power of extension was quasi-judicial or at any rate one which required a judicial approach. The latter ground applied to both the orders, and, therefore, if the second order of extension was bad, the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dication in the Act to suggest that the Collector is required to act judicially, firstly, because the proviso requires determination on facts and not on mere suspicion and a sufficient cause being made out by the applicant-officer, and secondly, because a civil right of a citizen to the restoration of the goods on expiry of the period, whether initial or extended, is affected. The other decision which takes a contrary view, is of the High Court of Mysore in Ganeshmul Channilal v. Collector of Central Excise (AIR 1968 Mysore 89). The grounds on which the learned Judges there took that view were (1) that the power was administrative, and (2) that if notice were to be necessary, the authority which applies for extension would have to make a disclosure about the investigation, which disclosure would be detrimental to the investigation itself. For the reasons already given, we cannot agree with the first ground. As for the second ground, we do not see any reason for the apprehension. So far as the initial period of six months is concerned, there is no question of disclosure of the investigation. The legislature itself contemplated that ordinarily such an investigation would be complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature and held that the order of extension was a quasi-judicial order. The Supreme Court then proceeded to decide the question as to whether the person from whose possession goods have been seized, is entitled to notice, before the expiry of the original period of six months and held that it is open to the Collector to extend the time beyond the original period of six months and thereafter, if he finds that sufficient cause has been made out before him in that behalf. The Court also held that such a person is entitled to notice of the proposal before the Collector of Customs for the extension of the original period of six months mentioned in Section 110(2) and he is entitled to be heard upon such proposal, but subject to the restrictions in regard to the need for maintaining confidentiality of the investigation proceedings. This view has been reaffirmed in the recent decision of the Supreme Court in the case of Harbans Lal v. Collector of Central Excise, Chandigarh - 1993 (67) E.L.T. 20 (SC) = (AIR 1993 SC 2487). 14. In view of the above, we hold that the order passed in terms of the proviso to Section 110(2) is a quasi-judicial order passed by the Collector as an Adjudicating Au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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