- (1.) The petitioner M/s. Chunilal Damani, is a registered partnership firm and is a registered dealer in gold. It is alleged that on or about 22nd November, 1966 M/s. Chandulal Khusalchand of Bombay, a registered gold dealer entered into two separate transactions with the petitioner firm and sold to the petitioner firm for valuable consideration 1013.200 grams and 1008.700 grams of gold ornaments under Bill Nos. 4191 and 4193 both dated November 22, 1966. The said ornaments were despatched through Postal Department by parcel from Bombay to Calcutta declaring the contents correctly. On receipt of an intimation from the Bara bazar Post Office the petitioner No. 2 went to the post office to take delivery of the parcels in question but the petitioner was prevented from taking delivery of the said parcels and was directed by some customs officers to make arrangements for examination of the contents of the parcel. The petitioner it is alleged declared the contents and produced the original of the said bills of the supplier. The petitioner took delivery of the parcel from the post office and made over the same to the customs officers for verification of the contents. It is alleged that on verification of the parcels the description given in the original bills was found to be correct. The Customs Officers however, on 29th November, 1966 seized the gold on the allegation that they apprehended that the said ornaments were of gold illicitly imported from the foreign country. It is stated that the seizure was made on 29th November, 1966 but the respondents did not serve any notice on the petitioner under Section 124(a) of the Customs Act of 1962 within 6 months from the date of the illegal seizure. It is further stated that the respondent is not entitled to retain the gold seized beyond 6 months without an order of extension under Section 110(2) of the Customs Act of 1962. It is alleged that by two letters both dated 24th May, 1967 it is found that the Customs Authorities have extended the period of seizure by two months from 28-5-1967 in exercise of the powers under Section 110(2) of the Customs Act, 1962 . It is submitted by the petitioner that the said extension was made without giving an opportunity of being heard to the petitioner and as such the order of extension was illegal. By a letter dated 25th July, 1967 the petitioner was served with a notice under Section 124 of the Customs Act which is in the following terms : "Collector of Central Excise and Customs, West Bengal, Calcutta. Registered with A/D. Show Cause Notice. C. No. VIII (10) 17-Cus./WB/67/16504C. To Messrs. Chunilal Damani, 72, Monohar Das Street, Calcutta. Whereas on the evidence indicated in the enclosed sheet there is reason to believe that the gold of foreign origin in the form of the crude and unfinished ornaments weighing 2021.900 grams as mentioned in the enclosed schedule have been imported into India without a valid import permit from the Reserve Bank of India, as required under Government of India, Ministry of Finance Notification No. 12(11) F. 1/48 dated 25-8-1948 (as amended) issued under Section 8(1) of the Foreign Exchange Regulation Act, 1947. 2 Accordingly, the said foreign gold in the form of crude and unfinished ornaments are liable to be confiscated under Section 111(d) of the Customs Act, 1962 . 3 And whereas you were concerned with and/or abeted possession/removal, purchase, disposal of the goods or otherwise dealt with the goods knowing or having reasons to believe that the same were liable to confiscation and you are liable to a penalty under Section 112 of the Customs Act, 1962 . 4. You are, therefore, called upon to show cause before the undersigned within ten days from the date of receipt of this Notice why penalty should not be imposed upon you and the said gold in the form of crude and unfinished ornaments should not be confiscated under the aforesaid provisions of Customs Act, 1962 . 5. You are informed that under Section 123 of the Customs Act, 1962 the burden of proving that the seized gold in the form of crude and unfinished ornaments are not smuggled, is, on you. 6. All evidence documentary or otherwise in your possession should be produced in support of your explanation within the period specified above failing which the case will be decided ex parte on the basis of available records without any further reference to you. 7. You should state at the same time whether you desire to be heard in person or through your authorised representative in your defence by the said authority. On receipt of your reply, if necessary a time and date will be fixed and communicated to you. Encl.-3."
(2.) Along with the notice there was a brief outline of the evidence which has been collected by the Customs Authorities against the petitioner. The petitioner showed cause. The petitioner further requested the respondents No. 2 to make arrangements for ensuring the personal attendance of witnesses who has made statement behind the back of the petitioner be produced at the adjudicating proceeding by letter dated 28th December, 1967. In reply to the said letter the Assistant Collector of Customs (Technical), West Bengal, Calcutta by letter dated 4th January, 1968 intimated that the Collector has rejected the prayer for examination of the witnesses. Being aggrieved by the order dated 24th May, 1967 extending the period of seizure by two months and show cause notice dated 25th July, 1967 and the proceeding with the adjudication on the basis thereof, the petitioner moved this Court and obtained the present Rule.
(3.) In the affidavit in opposition filed by the respondent it is inter alia stated that the ornaments seized were crude and unfinished and the weighment receipt did not mention the description of the said ornaments. It is alleged that the petitioner stated the name of the sender of the parcels but the petitioner could not explain the source of supply of the said gold ornaments from whom the said sender got them. It is stated further that the crude and unfinished ornaments were found inside the parcels. It is stated that as the crude and unfinished ornaments were found inside the parcels they were liable to confiscation and seized them legally. The respondent reiterated that the golds were legally seized. It is stated that the samples of the seized crude and unfinished ornaments were sent to the Calcutta Mint for assay. These steps took considerable time and as such notice under Section 124 of the Customs Act could not be given to the petitioner within 6 months from the date of seizure. As there was sufficient cause for extension of time, a representation for extension of time was made to the respondent No 2 that is, Collector of Customs, by the Customs department, who on being satisfied that there was sufficient reason for such extension, extended the time by 2 months from May 28, 1967 in exercise of his power under the proviso to section 110(2) of the said act. It is alleged that the petitioner is not entitled to get the copy of the request for extension of the period of any notice thereof or to any hearing of the matter. It is alleged that it was purely administrative matter as enjoined by the Customs Act and the respondent No. 1 and/or 2 extended the period on his personal satisfaction that there was sufficient cause for doing so.;