HEINRICH FUCHS Vs. ADDITIONAL COLLECTOR OF CUSTOMS
LAWS(CAL)-1960-9-26
HIGH COURT OF CALCUTTA
Decided on September 08,1960

Heinrich Fuchs Appellant
VERSUS
ADDITIONAL COLLECTOR OF CUSTOMS Respondents

JUDGEMENT

- (1.) The facts in this case are shortly as follows: The Petitioner is a citizen of Austria. On May 6, 1959 he arrived at the Dum Dum airport with an Austrian Passport. After landing from the aircraft, the Petitioner came into the Customs Enclosure with a temporary Landing Permit for customs clearance, to go into Calcutta. The Petitioner was supplied with a (Baggage Declaration Form and a Currency Declaration Form, which forms were duly filled in by him. The baggage of the, Petitioner was searched but nothing incriminating was found. The movements of the Petitioner however excited suspicion in the minds of the authorities and he was taken to the room of the Air Port Inspector and his person was searched in the presence of witnesses. Diamonds worth approximately Rs. 7,00,000 were recovered from the bodily cavity of the Petitioner. He was, thereupon, arrested and produced before the Additional District Magistrate, 24-Parganas, on May 7, 1959 and removed to jail, custody. On May 11, 1959 the Additional Collector of Customs, Calcutta, caused a notice to be served upon the Petitioner alleging that he had rendered himself liable to punishment under Section 167(5) and 167(75) of the Sea Customs Act (hereinafter referred to as the "Act"), by failing to declare the diamonds upon landing, and called upon the Petitioner to show cause why the diamonds should not be confiscated and penalty imposed upon the Petitioner. On May 31, 1959 the Petitioner should cause. Briefly speaking, his defence was that he was bound for Rangoon and had no intention of importing diamonds into India. On June 8, 1959 an order of adjudication was made under Section 182 of the Sea Customs Act by the Additional Collector of Customs, Calcutta. A copy of that order is Ex. "C" annexed to the petition. The explanation given by the Petitioner was wholly disbelieved, in view of the fact that he had attempted to pass out of the customs enclosure and not only had failed to mention the diamonds in the Baggage Declaration Form, but had concealed the diamonds in his bodily cavity, which he would not have done except with a mala fide motive. In the result, he was found guilty and the diamonds were confiscated under Section 167(8) and 167(73) of the Sea Customs Act. The order was as follows: In view of the foregoing facts I confiscate, the diamonds under Section 167(8) and 167(73) of the Sea Customs Act, the confiscation being absolute in terms Section 3(2) of the Import and Export (Control) Act. I reserve orders regarding personal penalty.
(2.) Against the order of confiscation the Petitioner preferred an appeal to the Central Board of Revenue. I have asked for a copy of the petition and the Memorandum of Appeal and I direct that this copy be kept on the record. No specific ground was taken in this Memorandum to the effect that this order of the Additional Collector of Customs was bad on the ground that he had reserved orders regarding personal penalty. The appeal is still pending. On June 17, 1959, the Additional Collector of Customs and Superintendent, Preventive Service, Calcutta, preferred a complaint in writing before the Additional District Magistrate, 24-Parganas, charging the Petitioner with having committed offences under Section 5 of the Imports and Exports (Control) Act, 1947 and also under Section 167(81) of the Sea Customs Act. On the basis of the said complaint, the Petitioner was tried by the Police Magistrate, Sealdah. The learned Magistrate by his order dated 27th August, 1959 found the Petitioner guilty and sentenced to R.I. for six months and 1 year respectively, the sentence to run concurrently. The Petitioner preferred an appeal to the District and Sessions Judge, 24-Parganas. The learned Additional District and Sessions Judge, by his order, dated October 1, 1959 dismissed the appeal but reduced the sentence. On October 8, 1959 the Petitioner was served with a second order, dated September 4, 1959 passed by the Additional Collector of Customs, Calcutta, a copy whereof is ex. "E" to the petition. By this order, the Additional Collector of Customs imposed on the Petitioner a personal penalty of Rs. 25,000 under Section 167(5) and 167(75) of the Sea Customs Act. It is against this order that this application has been made and the rule was issued on April 12, 1960. The first point taken in this application is that Section 182 of the said Act does not permit a piecemeal adjudication and that after having made the first order of confiscation, the Additional Collector of Customs was functus officio and had no jurisdiction to pass the second order of personal penalty. The second point taken was that personal penalty could not exceed Rs. 1,000, but Mr. Meyer conceded that regard being had to the view of this Court upon this point, he was not pressing the point at present, but was not abandoning the same, so that he may be at liberty to urge the point in a higher court. The real point taken is that the Additional Collector of Customs should have adjudicated on all the charges made in the show cause notice, dated May 11, 1959 at one and the same, time. As has been already stated above, the show cause notice asked the Petitioner to show cause why the diamonds should not be confiscated under Section 167(5) and 167(75) read with Section 3(2) of the Import and Export (Control) Act and also why penal action should not be taken against him. Section 167(5) of the said Act provides that if any goods, the importation or exportation of which, is for the time being prohibited or restricted by or under Chapter IV of the Act, be imported into India, contrary to such prohibition or restriction, then two alternative penalties can be imposed. Firstly, such goods shall be liable to confiscation. Secondly, any person concerned with any such offence shall be liable to penalty not exceeding three times the value of the goods, or not exceeding Rs. 1,000. Section 167(73). of the said Act provides that if any person who has landed from any vessel or boat (It now applies to aircraft) upon being asked by an Officer whether he has dutiable or prohibited goods, states in reply that he has not, and if such goods are, after such denial, found in his person or in his possession, then the penalty that can be imposed is confiscation of the goods, and such person shall be liable to a penalty not exceeding three times the value of such goods. The nature of the penalty under Section 167(5) has been laid down by the Supreme Court in Sewpujan Roy Ltd. v. Collector of Customs, 1958 AIR(SC) 845 where it has been explained that the confiscation of the goods is a penalty in rem. In other words, it is affixed to the goods and may be imposed upon the goods wherever it may be found, irrespective of the person who owns it or is in possession of it. The alternative remedy of penalty is a punishment in personam, that is to say a personal penalty. These penalties may be imposed in the alternative, or simultaneously. The first dispute is with regard to the quantum of the penalty. As will be observed, two kinds of personal penalties are mentioned. One, amounts to three times the value of the goods, and the other not exceeding Rs. 1,000. The question has been agitated in several cases as to whether, an order of penalty can be made for a sum exceeding Rs. 1,000. In one Supreme Court decision, there is an observation which has been sought to be construed to the effect that personal penalty cannot in any case exceed a sum of Rs. 1000. This observation has been variously construed by the High Court of Bombay, and so far as this Court is concerned, it has been uniformly construed to the effect that the penalty can exceed Rs. 1,000 and that the two punishments, namely exceeding three times the value and not exceeding Rs. 1,000 were meant to apply to different set of circumstances, and the one did control the other. However, in this case I need not go further into this question, because Mr. Meyer has conceded that he was not in a position to press this point before me, but lie was not abandoning the point, in cases, the matter goes up to a higher court. The point agitated in this application is as to whether, there being two kinds of punishment that can be inflicted under these two Sub-sections, namely, confiscation and penalty, is it permissible for the adjudicating authority to make a piecemeal order, as he has done in this case. Before going into the legality of such an order, I must at once say that it is highly undesirable, and the making of such piecemeal orders should be avoided in future. As I have stated, the nature of these alternative orders is as follows: When goods are imported, violating the prohibitions or restrictions put thereon, then the first thing that the authorities can do is to confiscate the goods. That is a right which can be said to be affixed to the goods, which are confiscated wherever they are found. For example, if such goods are found derelict and in nobody's possession, even so they can be confiscated. The other penalty is a personal penalty which can be imposed upon the person who is concerned in the commission of the offence, that is to say, the illegal importation of the goods. These two punishments are alternative in the sense that one can be imposed and not the other, but they can also be imposed simultaneously. In deciding the question as to whether, apart from the confiscation of goods, which amounted in this case to about Rs. 7,00,000 a personal penalty should be imposed or not, it is certainly pertinent to consider the factum of the confiscation and the value of the goods already confiscated In other words, the punishing authority might be of the opinion that in a case, where goods of an enormous value had been confiscated, there was ample punishment and no further punishment was called for. Similarly, the reverse may also happen. Where a personal penalty has been imposed for a substantial amount, the punishing authority may be of the opinion that the goods need not be confiscated. In saying so, I am not referring to this particular case, but I am contemplating a possible case. For example, suppose the personal penalty has been imposed up to three times the value of the goods, the authorities might consider that on the top of it, confiscation of the goods would be too hard a punishment and might allow the goods to. be taken away on the ground that the offender had already paid twice its value. If, however, a piecemeal adjudication is made, resulting in piecemeal appeals, then indeed, the appellate body would be in an embarrassing position. Here we find that an appeal was preferred only against the order of confiscation and that is the only matter that is before the Central Board of Revenue. It is true that the appeal has not yet been heard, and in the meanwhile the other part of the punishment has been imposed. But if piecemeal adjudication is permitted then it well might have been that the appellate body would he called upon to dispose of the appeal without the point of personal penalty being decided. It would not know whether the personal penalty was going to ha imposed or not, and would doubtlessly be handicapped in its own adjudication. Apart from this, in a trial which is quasi criminal, it is highly undesirable that there should be a piecemeal trial. In this case, it is clear that what the authorities were contemplating was to wait and see what happened in the criminal trial. This was an improper thing to do.
(3.) Although I am of the opinion that the course taken was neither proper nor desirable, I am unable to go to the extent of holding that it is illegal, and that it should be quashed by a high prerogative writ. So far as the law is concerned, the most that Mr. Meyer has been able to do is to place before me a case which dealt with a criminal trial. The Emperor v. Mari Parsu,1942 ILR(Bom) 202. In that case, what happened was as follows: The accused was charged under Section 379 of the Indian Penal Code. He was also charged with having a previous conviction of theft, under Section 379, read with Section 75 of the said Act. He was tried by the Assistant Sessions Judge of Thana, with a jury. The jury found the accused guilty of the charge under Section 379 of the I.P.C., whereupon the learned Judge accepted the verdict and proceeded to pass a sentence of three years' rigorous imprisonment. After having delivered sentence on August 23, he proceeded to try the accused on the second charge. The jury found the accused guilty also on that charge, whereupon the learned Judge sentenced the accused to seven years' rigorous imprisonment. Against this second order, an appeal was preferred. Shah, J., held that after the first sentence was passed, the trial of the accused on a charge under Section 379 came to amend, and thereafter, a proceeding upon a charge under Section 379 read with Section 75 could not be held, and was invalid. In my opinion, this case has ho analogy to the present one. In the case cited, there were two charges and the accused was convicted of one and sentenced. Thereupon, it was held that a further trial in respect of the same charge read with some other section would not lie. In the present case the offence is the same, but there are two alternative penalties that can be imposed. As I said, these punishments could be imposed alternatively or simultaneous. But the nature of the punishment is such that they can be distinguished from one another. In other words, confiscation is a different kind of penalty to a personal penalty. I see no legal impediment in the Collector of Customs saying that he had no doubts with regard to confiscation and was in a position to pronounce the imposition of the penalty, but that he required time to think over the other part, namely, the imposition of the personal penalty. One can think of many situation in which such an action may even be justified. Suppose there were two persons constituting the adjudicating authority, and they were ad idem on the question of confiscation, hut they might have differences on the question of personal penalty. In such a case, the adjudicating authority may think it feasible to pass judgment with regard to confiscation and postpone the question of personal penalty. Then again, suppose it is a case of goods which were of a highly perishable nature. The adjudicating authority may think that the order of confiscation should be made at once, otherwise the goods would perish, whereas it might postpone the question of personal penalty, because the facts of the case might require further consideration. It is, therefore, not possible to declare it as the law that under no circumstances would it be permissible to make an order of confiscation, and postpone the question of the imposition of the personal penalty. It must depend on the facts of each case, although as a general rule such piecemeal adjudication should be avoided. I am not also certain whether the Petitioner did the right thing in appearing against the piecemeal order. It may well be that the appeal should have been preferred after the whole thing was disposed of. I can, however, well appreciate that a convicted person would scarcely be expected to take that risk. He should, however, have taken this objection in his grounds of appeal.;


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