KING ELECTRONICS Vs. COLLR OF C EX & CUS , WEST BENGAL
HIGH COURT OF CALCUTTA
Collr Of C Ex And Cus , West Bengal
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(1.) In this Rule the subject-matter of challenge is the order dated 23rd Feb., 1972 passed by the Collector of Central Excise and Customs, West Bengal for confiscation of certain goods under Section 111(o) of the Customs Act, 1962 and also for imposing penalty of Rs. 5,000 upon the firm. M/s. The King Electronics, having the other petitioners as partners. Mr. Malay Kumar Basu who has appeared on behalf of the petitioners has submitted that the aforesaid order of the Collector of Central Excise who was also the Collector of Customs, West Bengal was without jurisdiction. According to Mr. Basu on Aug. 21, 1968 the Customs Officer had purported to seize the aforesaid goods. Within six months from the said date of the seizure the respondents had neither returned the goods to the petitioners nor had served any notice under Section 124 of the Customs Act, 1962 upon the petitioners. Mr. Basu has further submitted that the purported extensions made under the proviso to sub-section (2) of Section 110 of the Customs Act, 1962 were illegal and without jurisdiction inasmuch as no prior notice was given to the petitioners. Secondly the last of the extensions was made after expiry of the previous period of six months. Mr. Basu's submission is that the respondents were bound to return the goods which were seized on August 21, 1968 and, therefore, they had no jurisdiction under Section 111 of the Act to confiscate the goods which they were liable to return by reason of the continued seizure and retention of the goods having become illegal. The other ground on which Mr. Basu, learned Advocate for the petitioners, challenged the jurisdiction of the adjudicating authority is that under Section 4(1) of the Custom Act, 1962 the said authority was not empowered to function as the Collector of Customs in relation to Calcutta and according to Mr. Basu the Collector of Customs, Calcutta under notification dated 1st Feb., 1963 under Section 4(1) of the Customs Act, 1962 alone was competent to adjudicate the proceeding against the petitioners. Initially Mr. Basu has also addressed me on the merits of the order impugned in the Rule inter alia on the ground that the respondents had purported to place burden of proof upon the petitioners even in respect of the goods which were not covered by Section 123 of the Customs Act, 1962 . Mr. Basu at the later stage of his submission stated that in the event I was against him on the question of jurisdiction his clients proposed not to urge those contentions on the merits of the adjudication order and his clients may be given liberty to file an appeal in the appropriate forum.
(2.) In my view there is no substance in the aforesaid two contentions relating to the jurisdiction of the Collector of Central Excise who has been also designated as the Collector of Customs. West Bengal to adjudicate and also about his power to confiscate the goods whose continued seizure was prima facie in contravention of Section 110 of the Customs Act, 1962 .
(3.) Mr. Basu himself has drawn to my attention to the decision of the Supreme Court in Assistant Collector of Customs and Superintendent. Preventive Service Customs, Calcutta V/s. Charan Das Malhotra, 1972 AIR(SC) 689. In Charan Das Malhotra's case the Supreme Court had upheld the order of a Division Bench of this Court regarding the scope of the power of the Collector to extend the period for giving notice of confiscation without providing any opportunity of hearing to the person whose goods are seized. But the Court did not quash the proceeding under Section 124 of the Customs Act. My learned Brother A.K. Sen J. in All India General Transport Corporation V/s. Collector of Central Customs, 0 79 CalWN 663 applied the decision Charan Das Malhotra and held that Section 110(2). Proviso of Customs Act, 1962 did not lay down any period of limitation for initiation of proceedings, for confiscation or imposition of penalty under Section 124 of the Act. A notice issued after the period of six months does not invalidate the proceedings initiated on such notice even though it was issued on an extension of time illegally made expert. A Division Bench of the Madras High Court in Collector of Customs and Central Excise, Samajiguda, Hyderabad V/s. Amruthalakshmi, 1975 AIR(Mad) 43 also took the same view that if no notice is given within the period contemplated under Section 110(2) of the Customs Act, the department cannot retain the goods but it would not take away the power of the department to proceed on that confiscation and penalty proceedings under Section 124 of the Act or to lodge a prosecution in a criminal court. The learned Judges pointed out that the two sections were independent. While Section 110 was restricted to the seizure and detention of the goods for the period specified, Section 124 deals with the authority to adjudicate. The same view was taken by a Division Bench of the Bombay High Court in Mohanlal Devdanbhai Choksey v M. P. Mondkar, 1977 AIR(Bom) 320. Thus there is a preponderance of the judicial view that failure to issue a snow cause notice within the time prescribed by Section 110 of the Act cannot fetter the power to initiate confiscation proceedings. I am unable to follow the contrary view expressed by Amiya Kumar Mookerji, J., as his Lordship then was, in Uma Rajeswarrao Patra V/s. Union of India, 1977 2 CalLJ 266 because the said decision is not consistent with the following observations made by the Supreme Court in Charan Das Malhotra's case. The section does not lay down any period within which the notice required by it has to be given. The period laid down in Section 110(2) of the Act affects only the seizure of the goods and not the validity of the notice. I respectfully follow the said decision and also the decision of A. K. Sen, J. and hold that there is nothing in the Customs Act, 1962 to indicate that without a valid seizure penalty by way of confiscation cannot be imposed.;
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