9911796707
TMI Blog2021 (12) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 dispos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1524899 6. 5363294 dated 19.10.2019 MRKU4378780 ₹ 1528069 c) The 8 containers were accordingly taken in custody. For investigation, the department, on 01.11.2019 summoned the freight forwarder of M/s Sea Fast Shipping Agency and checked his phone. Incriminating information was found in the phone. Accordingly a panchnama was prepared on 05.11.2019. d) The Department also wrote to the shipping agency i.e. Maersk Line on 04.11.2019 to verify the shipping status of the 8 containers containing dry dates for sale in the background of assertion made by the Petitioner stating that the containers had been shipped from Iran. e) M/s Maersk Line replied vide email dated 5.11.2019 stating that the containers were shipped from Karachi Port, Pakistan. Documentary proof i.e. copy of Bill of Lading was annexed to the email. f) Thereafter, the seized containers were inspected and summons was issued to the Petitioner on 04.11.2019 seeking an explanation about the true origin of these goods. g) The statement of the Petitioner was recorded under Section 108 Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orizes a criminal court to dispose of the property which is subject to decay, he would contend that a criminal court does not have any jurisdiction under the Customs Act. He states that the Customs Act is self contained and only the authorities under the Customs Act have the jurisdiction/power to dispose of the goods confiscated under the Customs Act. He submits that order directing disposal could not have been passed either under Section 451 CrPC or Section 122 Customs Act. 5. He further argued that, without prejudice to his other contentions, under Section 451 Cr.P.C the criminal court can only make such order during a trial or pending the conclusion of the inquiry under Cr.P.C. It is submitted that a trial going on under the Cr.P.C prior to the disposal of the goods as per the mandate of Section 451 Cr.P.C. Reliance was placed upon Hardeep Singh v. State of Punjab, AIR 2014 SC 1400, which defines the term inquiry and draws its distinction from investigation done by any investigating agency. 6. He submitted that the adjudicating authority failed to see that the petitioner had already waived his right to the show-cause notice being served on him and the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the shipping agent of the goods. He submitted that the Petitioner is guilty directly of Section 46(4) of the Customs Act which warrants an importer to subscribe to a declaration as to the correctness of the contents of the bill of entry, and such a violation would entail confiscation of goods under Section 111(m) and be subject to a penalty under Section 112(a) (ii) of the Act and also liable for higher penalty under Section 114A which specifically provides for penalty to be imposed for mis-declaration of imported articles and knowing suppression of material information about the articles, and such penalty would be commensurate or more with the interest levied on the misrepresented goods. 10. The Ld. SPP submitted that the Petitioner was given an opportunity to pay the penalties and de-seize the confiscated imported goods pursuant to being served a show-cause notice, he submits and it has been conceded by the Petitioner that he waived his right to receiving a show-cause notice and that he would contest the confiscation by the department. He further submitted that the Petitioner s statement was recorded under Section 108(3) of the Act wherein the Petitioner was confronted ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers, 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. 15. While dealing with the Foreign Exchange Regulation Act, the Supreme Court in CBI V. State of Rajasthan, (1996) 9 SCC 735, 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. The Court held as follows: 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62, all the goods or documents seized under Section 110A may pending adjudication be released to the owner on taking a bond from him in the proper form as the adjudicating authority may require. 35. In terms of Section 111, it has already been observed herein above that the improperly brought imported goods from a place outside India can be confiscated and penalty for improper importation of goods is imposable under Section 112 of the said enactment. In terms of Section 113 of the Customs Act, 1962, improperly exported goods specified therein are liable to confiscation and Section 114 of the Customs Act, 1962, provides for penalty for attempt to export goods improperly. 36. Under Section 115(2) any conveyance used as a means of transport in the smuggling of any goods or in the carriage of any smuggled goods is liable to confiscation, unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself and the proviso to Section 115(2) provides for the imposition of a fine not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods as the case may be in lieu of the confiscation of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudging the confiscation has to take hold the possession of the confiscated goods. 40. In terms of Section 127 of the said enactment, the award of any confiscation or penalty under the Customs Act, 1962 by an officer of Customs shall not prevent the infliction of any punishment to which the person affected is liable under Chapter XVI of the Act or any other law. 41. Under Section 128 of the Customs Act, 1962, which falls under Chapter XVI which deals with appeals against order or decision passed under the Act by an officer of Customs lower than the Principal Commissioner of Customs or Commissioner of Customs provides for an appeal to the Commissioner (Appeals) within 60 days of the day of the communication to him. 42. Thus it is apparent that the Customs Act, 1962 provides for a complete code in itself in relation to search, seizure, confiscation and release of goods seized in alleged violation of the Customs Act, 1962. 43. Though after confiscation ordered by the adjudicating authority, the confiscated goods become vested in the Central Government in terms of Section 126(1) of the Customs Act, 1962 coupled with the factum that Section 127 of the said enactme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime of consideration of the prayer for release of the vehicles on superdari. The impugned orders of the learned Trial Court are thus set aside. The petition Nos. Crl.M.C. Nos. 4316/2016 and 4767/2016 are thus allowed. (emphasis supplied) 17. The said judgment has been challenged in the Apex Court but the Apex Court has not granted any stay on the said judgment. 18. It emerges from the facts of this case that the Petitioner imported dry dates and mis-stated that the origin of them was Iran for gaining immunity from paying a higher percentage of tax. The Customs Department ascertained the place of deportation of the goods from Karachi Port, Pakistan and rightly seized the goods on finding out that true information had been suppressed for the purpose of duty evasion. Thereafter, the Petitioner was arrested and his statement was recorded where he confirmed the allegations levelled by the Customs Department about deliberate misdeclaration. However, the same was retracted later. The Petitioner was given a show-cause notice to explain his position against the charges that were made and was given an option to redeem the goods after payment of a penalty commensurate with the late ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e later shall prevail. 1.3. Whereas this Manual indicates the general procedures to be followed, the concerned Principal Commissioners/ Commissioners may make requisite changes thereto, as may be necessitated by local conditions, keeping in view the spirit of instructions contained in this Manual. These changes may be informed to the Board. 1.4. In major Custom Houses, there shall be a separate unit, called the Disposal Unit which should be entrusted with the task of taking-over all goods ripe for disposal from the custodians and dispose of the same by auction or otherwise. 21. Category 1 of the Disposal Manual, 2019 outlines the goods that have a short life and therefore limited period of usage and the goods imported by the Petitioner fall under this category which is reproduced as under 2.3.Category-I: Goods to be Disposed of Immediately After Seizure 2.3.1. The goods under this category have a very short shelf-life as they are either prone to rapid decay or they become outdated/ obsolete very fast. Some of these goods are liable to deterioration due to drying or humidity. Some others may require special arrangements for their preservation and storage. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
