- (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 November 22, 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 1,013-200 gms. and 1,008-700 gms. of gold ornaments under Bills 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 Burrabazar 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 November 29, 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 November 29,1966, but the Respondents did not serve any notice on the Petitioner under Section 124(a) of the Customs Act, 1962, within six months from the date of the illegal seizure. It is further stated that the Respondent is not entitled to retain the gold beyond six months without an order of extension under Section 110(2) of the Customs Act, 1962. It is alleged that by two letters both dated May 24, 1967, it is found that the Customs authorities have extended the period of seizure by two months from May 28, 1967, in exercise of 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. Be that as it may by letter dated July 25, 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 & Customs, West Bengal, Calcutta Show Cause Notice Registered with A/D. Dated 25th July, 1967 C. No. VIII(10)17-CUS/WB/67/16504C To Messrs Chunilal Damani, 12 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 crude and unfinished ornaments weighing 2021-900 grammes 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 25.8.48 (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 abetted 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 the 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. Sd/- -D.R. Kohli Collector of Central Excise fc Customs, West Bengal, Calcutta End. 3 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 Respondent No. 2 to make arrangements for ensuring the personal attendance of the witnesses who had made statements behind the back of the Petitioner, be produced at the adjudicating proceeding by letter dated December 28, 1967. In reply to the said letter the Assistant Collector of Customs (Technical), West Bengal, Calcutta, by letter dated January 4, 1968, intimated that the Collector had rejected the prayer, for examination of the witnesses. Being aggrieved by the order dated May 24, 1967, extending the period of seizure by two months and show cause notice dated July 25, 1967, and the proceeding with the adjudication on the basis thereof, the Petitioner moved this Court and obtained the present Rule.
(2.) 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 the Respondent seized them legally. The Respondent reiterated that the gold was 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 six 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 two 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 or any notice thereof or to any hearing of the matter. It is alleged that it was purely an 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.
(3.) It is stated-that the show cause notice is valid one and there is no infirmity in the show cause notice. It is further stated that the Respondent No. 1 and/or 2 had not made up his mind nor had he come to any definite conclusion and prejudged the issue before the completion as alleged. On the basis of this pleading the parties went to trial.;