R. R. K. Trivedi, J. - (1.) THIS petition has been filed questioning the legality of the order dated 3-8-81 (Annexure V to the writ petition) under which a penalty of Rs. 50,000/- has been imposed upon M/s. Tin Can Manufactures, Chaman Ganj, Kanpur under section 112 of Customs Act, 1962 (hereinafter referred to as the Act). The petition has been filed by Mohammad Khalil, partner of the aforesaid firm.
(2.) FACTS in brief, giving rise to the aforesaid petition are that on 17-3-1975 Customs Officer of Kanpur searched the business premises of M/s. Tin Can Munufacturers on the basis of intelligence gathered by them and under the authority of a search warrant issued by the competent authority. This search resulted in recovery of tin plates of foreign origin weighing 6350 kgs. The tin plates so recovered before the markings showing that they were "U S.A. made". The total value of the plates according to the Customs authorites was Rs. 24,400/-. As the petitioner could not produce any evidence in support of lawful acquisition, possession and import into India of the aforesaid tin plates, the authorities under reasonable belief that the possession has been acquired in contravention of section 3 (1) of the Import and Export (Control) Act, 1947 read with clause (3) of Import Control order No. 17/55 and section 11 of the Customs Act, 1962, seized the tin plates for action under section 110 (1) of the Act. Section 110 (2) of the Act requires that in case no notice in respect of the goods seized is given under clause (a) of section 124 of the Act within six months of seizure of the goods, the goods shall be returned to the person from whose possession they were seized. Proviso to section 110 (2) provides for extension of the aforesaid period of six months by Collector or Coustoms on sufficient cause being shown. Collector Customs by order dated 12-9-75 extended the period upto 10-11-1975. This order was communicated to petitioner. A copy of the order dated 12-9-1975 has been filed as Annexure 1-A to the writ petition. Petitioner was then served a show cause notice on 7-11-1975 asking him as to why the goods seized should not be confiscated under section 111 of the Act and a penalty be imposed under section 112. Petitioner filed Civil Misc. Writ Petition No. 116 of 1976 and Writ Petition No. 284 of 1976 in this court. Both the writ petitions were heard and allowed by a Division Bench of this court vide order dated 6-1-1978. This court quashed the order dated 12-9-1975 by which the period of six months was extended upto 10-11-1975 and directed the respondents to return the seized goods. The order of Division Bench is annexure II to the writ petition. The order dated 12-9-1975 passed by the Collector of Customs was quashed on the ground that petitioner was not given opportunity of hearing before granting extension. This order could not be sustained in law. As the extension was illegal, the tin plates seized on 17-3-1975 were directed to be returned. Consequently, the tin plates were returned to petitioner which is not disputed. However, petitioner vide order dated 17-4-1980 was informed that his case shall be decided by the Deputy Collector, Central Excise, Kanpur. He was also called upon to adduce evidence in his defence in reply to the show cause notice dated 7-11-1975. Petitioner submitted his reply dated 17-7-1980. A copy of the reply has been filed as Annexure IV to the writ petition. However, the Deputy Collector by order dated 3-8-1981 imposed a penalty of Rs. 50,000/- and rejected the defence set up by petitioner. It is this order which has been impugned in the present writ petition.
(3.) WE have heard Shri R. N. Bhalla, learned counsel for petitioner, and learned Senior Standing Counsel for Union of India Shri V. K. Singh Shri Bhalla has challenged the impugned order on the ground that in view of the order dated 6-1-1978 passed by this court no proceedings could be initiated against petitioner as the order passed by the Collector Customs dated 12-9-1975 was quashed and the tin plates seized were returned to petitioner. According to Shri Bhalla the order is binding on the respondents and as the goods seized were returned, no proceedings for confiscation in pursuance of the notice dated 7-11-1975 could be continued nor a penalty could be imposed. Shri Bhalla has placed reliance on the Division Bench view taken by Andhra Pradesh High Court in case "The appellate Collector of Customs and Central excise, Madras v. T. N. Khamibati, 1977 CrLJ 1331, and has submitted that as the notice was given during the extended period and not within the original period of six months contemplated under section 110 (2) of the Act, which was found illegal by this court, no further proceedings could be taken against petitioner and the impugned order dated 3-8-1981 is liable to be quashed. Learned Senior Standing Counsel, on the other hand has submitted that under section 110 (2) of the Act even if the goods seized are returned, the action taking by the authorities could not be affected and the impugned order has been rightly passed.;