MAHENDRA KUMAR N JAIN Vs. COLLECTOR OF CUSTOMS AND CENTRAL EXCISE
LAWS(CE)-1986-9-3
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on September 10,1986

Appellant
VERSUS
Respondents

JUDGEMENT

S.Kalyanam, - (1.)THIS appeal is directed against the order of the Additional Collector of Customs, Tiruchirapalli dated 30.10.1985 imposing fine of Rs. 15,000/- under Section 115(2) of the Customs Act, 1962 (hereinafter referred to as the 'Act') in lieu of confiscation of the van TMU 5841 used for transport of contraband goods.
(2.)On 5.5.1984 at about 1.30 a.m. the Inspector of Central Excise, Kattumavai along with his staff noticed a van bearing registration No. TMU 5841 belonging to the appellant coming from Thiruppunavasal side towards Avudaiyarkoil direction, within the jurisdiction of the Trichy Collectorate. The authorities signalled the vehicle to stop and since the vehicle did not stop, the officers fired three rounds in the air when the occupants of the van abandoned the same and escaped in darkness. Search of the van resulted in the recovery of 15 gunny bundles in wet condition which on opening were found to contain Video Cassette Recorders and Polyester suitings of foreign origin, totally valued at Rs. 2,54,650/-. The goods were seized by the authorities as per law under mahazar and proceedings instituted after due investigation, resulted in the present impugned order now appealed against.
Shri Suganchand Jain, the learned counsel for the appellant submitted that the appellant, being the owner of the van confiscated under the impugned order, was not served with any show cause notice as per law within the stipulated statutory period of six months in terms of Section 110 of the Act. It was further urged that a subsequent show cause notice issued by way of addendum is legally untenable since the same was issued after six months of seizure of the van in question. The learned counsel, therefore, urged that since the detention of the van under seizure by the authorities is contrary to law inasmuch as no show cause notice was issued to the appellant, the owner of the van, within a period of six months as enjoined by Section 110 of the Act, the adjudication order confiscating the van in question and releasing the same on redemption fine is not legally tenable. Heard Shri C.V. Krishnan, the learned Departmental Representative.

(3.)THE fact that the person in charge of the van at the time of seizure of the contraband goods knew about the transport of the same is not disputed before me. THErefore, in terms of Section 115, Sub-section (2) the van would become liable for confiscation. THE only question that is urged for consideration is whether the impugned order confiscating the van when show cause notice was not issued within a period of six months from the date of seizure of the van as per Section 1 1.0(2) of the Act is legally sustainable. In my opinion, even though there is a right to restoration of the goods under seizure in the absence of a show cause notice within the statutory period of six months from the date of seizure in terms of Section 110(2) of the Act and such right is a vested civil right of the person from whom the goods were seized, that would not affect the jurisdiction of the authorities to effect confiscation of the same in adjudication proceedings in pursuance of a show cause notice issued under Section 124 of the Act. THE Division Bench of the Madras High Court in the case of 'Collector of Central Excise v. Amruthalakshmi' (reported in AIR 1975 Mad. 43) dealing with the scope of Section 110 and 124 of the Act has taken the view that when goods are seized under Section 110(1) of the Act, if a notice, as provided for in Section 124(a) is not given within six months of the seizure of the goods, the officer is bound to return the goods to the person from whose possession they were seized, subject to an extension of the period as specified therein. THE Division Bench held that this does not take away the power of the Department to proceed with the confiscation and penalty proceedings under Section 124 of the Act or to lodge a prosecution in a criminal court. THE two Sections were held to be independent. While Section 110 is restricted to the seizure and detention of the goods for a period specified, it has nothing to do with the power conferred on the authority under Section 124 or other provisions of the Act. THE Supreme Court in the case of Assistant Collector of Customs v. Charan Das Malhotra', reported in AIR 1972 SC 689, has held that Section 124 of the Act does not lay down any period within which the notice required by has to be given and the period laid down in Section 110(2) affects only the seizure and not the validity of the notice. I, therefore, hold that it is not proper to read the limitation prescribed under Section 110(2) of the Act as limitation for a proceeding under Section 124 of the Act and the ratio of the Supreme Court ruling referred to supra is clear that the statutory period of six months laid down under Section 110(2) of the Act and violation thereof would only affect the seizure of the goods and not the validity of the show cause notice issued in terms of Section 124 of the Act. THE Division Bench of the Madras high Court has interpreted the ratio of the Supreme Court in the way I have done. THE Bombay High Court has also taken a similar view of the case of 'Mohanlal Devdhanbhai Choksey and Ors. v. M.P. Mondkar and Ors.', reported in AIR 1977 Bombay 320. THE High Court of Punjab and Haryana in the case of 'Manilal v. Collector of Central Excise, Chandigarh' (reported in AIR 1975 Punj & Har 130) has followed the view of the Madras Bench. THE Gujarat High Court has also taken a similar view in the case of 'J.K. Bardolia Mills v. M.L. Khungar, Deputy Collector of Central Excise and Customs (1975 (66) Gujarat Law Reporter 119). No doubt the Delhi High Court in the case of 'Shantilal Mehta versus Union of India and Ors.' (1983 ELT 1715 (SC) has taken the view that a vested civil right in a person in terms of Section 110 clause (2) of the Act when no show cause notice is issued within a period of six months is indefeasible and absolute and confiscation being the offspring of seizure inherent nullity should lay at the very root of confiscation proceedings if there was no compliance with the statutory formality of Section 110 clause (2) of the Act. However, having regard to the view of the Supreme Court referred to supra, I am inclined to hold that the order of confiscation of the van in question in pursuance of a valid order of adjudication by competent adjudicating authority is not in any way invalidated by reason of a show cause notice not having been issued to the appellant within the statutory period of six months in terms of Section 110(2) of the Act. I, therefore, uphold the finding of the adjudicating authority under the impugned order in respect of the confiscation of the van in question. Regarding the quantum, taking into consideration, the fact that from the date of seizure namely, 5.5.84, the van remains stationary and is in the custody of the department and so would have undergone considerable damage by sheer passage of time and loss in its utility value, I feel interests of justice would be met if some reduction in the quantum of fine is given and in this view of the matter I reduce the same from Rs. 15,000/- to Rs. 10,000/-(Rupees ten thousand only). Except for the above modification, the appeal is otherwise dismissed.


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