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TMI Blog2017 (5) TMI 1747X X X X Extracts X X X X X X X X Extracts X X X X ..... were liable for confiscation. Thus, the very initiation of the proceedings against the petitioner seems to be without jurisdiction. Penalty - HELD THAT:- The petitioner has categorically submitted that he could not be forced to participate in the proceedings, which was without jurisdiction and was liable to be refunded the amount, which was the cost of his goods, which had been taken in hot haste by the authority without following the due process of law - imposition of a penalty after confiscation of the Goat Skins, which had been illegally auction sold by the authorities, could not be sustained as by no stretch of imagination the same authority, who issued the show cause notice, proceed to pass the final orders, in the present case. Such action clearly reveals the mechanical manner in which the authorities have been functioning and is indicative of the non-application of mind and also is deemed to be vested with ulterior motives. The entire proceedings against the petitioner having been conducted in gross violation of the statutory provisions of the Act stands vitiated, more so because the petitioner has been subjected not only to irreparable loss and injury but has also b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) On 22-9-2012, suddenly the District Police raided the declared godown of the petitioner and seized, without any rhyme or reason, the aforementioned 2027 pieces of Goat Skin and thereafter handed over the same to the jurisdictional Customs Office at Forbesganj. (iv) Immediately thereafter on 23-9-2012, the petitioner filed a claim before the Assistant Commissioner, Customs, Forbesganj for the release of the goods along with all relevant documents, but the Assistant Commissioner, Customs without verifying the ownership and the claim of the petitioner, placed the goods on auction on 24-9-2012. It appears that a notice dated 23-9-2012 was also issued under Section 150 of the Act, vide Letter No. 7615. (v) On 24-9-2012, vide Letter No. 7527, the respondent-authorities, on their own will, decided to withhold the auction for one more day and directed the petitioner to furnish cash security of the full value of the goods and also execute a bond for the release of the said goods, subject to the condition that the Goat Skin will be kept intact and will not be sold or used otherwise and will be preserved in the same condition till finalization of the case. (vi) According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er at the time of the seizure, no subsequent information could be of any avail to the respondents. Thus, the loss rendered to the petitioner deserves to be compensated and injury met to him has to be remedied by refunding the sale proceeds of the seized items. 7. Learned Counsel for the petitioner further contended that the allegation levelled by the respondents that the petitioner was trying to export illegally also could not be sustained as per Section 11H of the Act as the Goat Skins are not specified goods as described under the Schedule nor were they recovered from any specified area (5 Kms. from border). Furthermore, the notice does not contain the reason assigned or the reasons for action taken against the petitioner. It was further submitted that the adjudicatory authority, who passed Annexure 5, was also the investigating authority i.e., Assistant Commissioner, Customs, which is wholly irregular and against the settled principle of law. In view of such facts and circumstances, it was contended by the Learned Counsel for the petitioner that this Court may order the refund of the money, as claimed by the petitioner. 8. In reply to the averments made by the petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (3), as the case may be, of Section 11J; (c) specified area include the Indian customs water, and such inland area, not exceeding one hundred kilometres in width from any coast or other border of India, as the Central Government may, having regard to the vulnerability of that area to smuggling, by notification in the Official Gazette, specify in this behalf : Provided that where a part of any village, town or city falls within a specified area, the whole of such village, town or city shall, notwithstanding that the whole of it is not within one hundred kilometres from any coast or other border of India, be deemed to be included in such specified area; (d) specified date in relation to specified goods, means the date on which any notification is issued under Section 11-I in relation to those goods in any specified area; (e) specified goods means goods of any description specified in the notification issued under Section 11-I in relation to a specified area. 11. The petitioner thus submitted that the specified goods , as per Section 11H(e), means goods of any description specified in the notification issued under Section 11-I i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. (1A) The Central Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification in the Official Gazette, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (1), be disposed of by the proper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified. 14. It was submitted by the Learned Counsel for the petitioner that as per Notification No. 32/2005-Cus. (N.T.), dated 11-4-2005, issued under Section 110(1A) of the Act, seizure can be validly made under Section 110 of the Act if the officer making the seizure has reason to believe that any goods are liable to confiscation under the Act. Where seizure has been made on the basis of mere suspicion and/or presumption and the condition precedent for the exercise of power und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to believe postulates belief and the existence of reason for that belief. The belief must be held in good faith; it cannot be merely a pretence. The expression does not (sic) purely subjective satisfaction of the Income Tax Officer. In Sheonath Singh v. Appellate Assistant Commissioner of Income Tax (Central) Calcutta (AIR 1971 Supreme Court 2451) it was held that the words reason to believe suggest that the belief must be of an honest and reasonable person based upon reasonable grounds and the officer may act or direct or circumstantial evidence but not on mere suspicion, gossip or rumour. It was further held that if the officer concerned acts on material which is relevant then he acts without jurisdiction. 19. Learned Counsel for the petitioner has raised further contention that the impugned adjudicatory order dated 22-11-2013, contained in Annexure-1 to the interlocutory application, would also not be sustained as the adjudicating authority, being the Assistant Commissioner, is also the same authority, who issued the show cause notice to the petitioner. 20. This Court finds after a perusal of Annexure-4 and also the adjudicatory order that the Assistant Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two other persons had been similarly seized by the customs officials and challenging the seizure the two buyers from the petitioner had come to this Court. In the decision in that case there is a reference to some earlier seizures in which the resultant confiscation proceedings had failed. In the case of Anatilal Prasad the seizure was held to be bad, illegal and without jurisdiction. But the facts of an earlier case cannot form the basis to assail a subsequent seizure; so far as the validity of the impugned seizure is concerned it can only be judged on the basis of undisputed facts and not on the basis of the allegations made by the petitioner. This court would, therefore, discount the assertion being made by the petitioner that at the time of inspection by the customs officials, apart from the challan, a copy of the Bill of Entry too was produced by the driver of the bus. 24. I have heard Learned Counsel for the petitioner and the Learned Counsel appearing on behalf of the Customs and also perused the materials on record. The contention of the petitioner that the goods were not notified goods form the basis of his challenge to the action of the respondents. This Court had is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly perishable nature and that the petitioner could not satisfy such condition. 27. Thus, the entire proceedings against the petitioner having been conducted in gross violation of the statutory provisions of the Act stands vitiated, more so because the petitioner has been subjected not only to irreparable loss and injury but has also been denied the basic principle of audi alteram partem, leading to much harassment and injury by the illegal acts of the respondents. 28. In the result and for the reasons stated above, the impugned order dated 23-9-2012, as contained in Annexure-4, and the impugned order dated 22-11-2013, as contained in Annexure-1 to the interlocutory application, are held to be bad in law and are thus set aside. 29. This Court, considering the facts that the whole proceedings against the petitioner stands vitiated as being without jurisdiction, also allows the prayer of the petitioner for refund of ₹ 1,21,620/-, being the price of 2027 pieces of Goat Skins, which has been illegally sold by the respondent-authorities. 30. The writ application is, thus, allowed. However, in the facts and circumstances, there shall be no order as to costs. - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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