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TMI Blog1977 (10) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... would be required for importing goods which are produce of Nepal and manufactured in that country. Several consignments were allowed clearance by the Customs in Calcutta. However, a stock of 82,900 capsules were seized from N. Das and Co., Calcutta on 4-9-1969 and a show cause notice was issued on 18-3-1970, wherein the petitioner was called upon to show cause as to why action should not be taken under Section 111(d) of the Customs Act, read with Rule 41 of the Drugs and Cosmetics Rules, 1945, and why penal action should not be taken against them under Section 112 of the Customs Act, 1962 (referred to hereinafter as the Act). The petitioner furnished its reply. Thereupon an enquiry took place. The additional Collector of Customs, Calcutta, passed an order holding that the goods were not of Nepalese manufacture and, therefore, the import was unauthorized. He levied a penalty of Rs. 5000/- under Section 112 of the Act. On appeal to the Central Board of Excise and Customs, New Delhi, the appeal was dismissed. However, the quantum of penalty was reduced to Rs. 1800/-. This was on the finding that the drug could not be considered to be a Nepalese manufacture because manufacturers, accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and furnishing of reply, a proper adjudication took place and the revision preferred by the petitioner had been rightly dismissed. 6.The letter dated 26-8-1969 given by the Eastern Nepal Industries contains a clear admission that the capsules were imported and were filled up in their factory with the imported Chloramphenical powder and were sold. Therefore, it is not correct to say that the goods were treated as of Nepalese origin. There is no manufacturing process involved nor could it be styled that the goods were manufactured in Nepal. Hence, the writ petition is liable to be dismissed. 7.Mr. S.B. Mani, learned Counsel appearing for the petitioners, raises the following two points before me, one of which is peculiar to W.P. No. 1857 of 1975. The interpretation placed by the department on the term 'manufacture' is not correct. First of all, the definition of 'manufacture' as occurring under the Drugs and Cosmetics Act must be made applicable. It is not necessary that the resultant produce out of 'manufacture' must be of a different type or quality; especially in the instant case when all that the petitioner wants is to sell his Chloramphenical powder in Capsule form. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods are liable to confiscation irrespective of whether actually they were seized or not, action under Section 112 can be taken. Equally, Section 125 would also be attracted. In support of the submission, reliance is placed on Collector of Customs and Central Excise v. Amrutalakshmi - AIR 1975 Mad. 43 and Munilal v. Collector, Central Excise, Chandigarh, AIR 1975 Punj. and Haryana 130. 10.The word 'manufacture' has been defined under the Drugs and Cosmetics Act as follows - "Manufacture in relation to any drug or cosmetic includes any process or part of a process for making, altering, or ornamenting, finishing, packing, labelling, breaking up of otherwise treating or adopting any drug or cosmetic with a view to its sale and distribution but does not include the compounding or dispensing of any drug or the packing of any drug of cosmetic in the ordinary course of retail business and to 'manufacture' shall be construed accordingly". 11.Having regard to the comprehensive language used in this definition, may be a mere capsuling would amount to manufacture. If the case relates to the Drugs and Cosmetics Act, which is not so in the instant case, the position would be entirel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notice also refers to the violation of Rule 41 of the Drugs and Cosmetics Rules, in that the petitioner is said to have misbranded under Section 9(f) in Chapter III of the Drugs and Cosmetics Act, 1940. That may be so. So long as the action taken under the Act can be validly upheld, it does not matter whether the petitioner is liable to be proceeded with for the violation of the provisions of the Drugs and Cosmetics Act or the rules thereunder. Therefore, the first point raised by the petitioner fails. 13.Taking up W.P. No. 1857 of 1975, the order of the Additional Collector of Customs states after levying a penalty of Rs. 2,000/-, under Section 112 of the Act, "since, however, show cause notice was not issued within 6 months of seizure of the goods although liable to confiscation are ordered to be released." In view of this order, it is contended that if the goods cannot be confiscated, no action can be taken under Section 112 of the Act. I am totally unable to agree. Section 110 as the marginal note itself will show, deals with seizure of goods (we are not concerned with the documents and things presently). This section occurs under Chapter XIII. However, Chapter XIV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted, it has been categorically found that having regard to the scope of these two sections viz. Section 110 on the one hand and Section 111 read with Section 112 on the other, being independent of each other, seizure is not necessary for confiscation. This will be an added reasoning to any conclusion. Therefore, the second point raised by the petitioner also has to be rejected. 16. A faint argument was advanced at the end that the Board will have no jurisdiction to levy fine in consideration of the re-export. It has to be remembered in this case that W.P. 2798 of 1970 was filed against the order of the Additional Collector dated 8-6-1970, in which a direction was also prayed for to permit the firm to re-export the drug to Nepal. Pursuant to a direction from this court, the goods were allowed to be re-exported to Nepal on bank guarantee submitted by the petitioner. However, the writ petition was dismissed on 21-6-1972. Therefore, having regard to the factual aspect, the penalty of Rs. 5,000/- imposed under Section 112 was reduced to Rs. 1,800/-, since the goods were not made available for human consumption but were actually re-exported. Therefore, taking a lenient view, the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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