1.This appeal under Section 129A(2) of the Customs Act is by the Collector of Customs, Ahmedabad and is directed against the Order-in-Appeal bearing No. S/49-359-360/82 dated 24-1-1983 passed by the Collector of Customs (Appeals), Bombay by which he set aside the personal penalty of Rs. 2,000/- imposed on each of the Respondents and also confiscation of the Coloured T.V. and Video Cassette Recorder passed by the Assistant Collector of Customs in his order bearing No.S/36/Cus/82, dated 9-11-1982.
2. The facts necessary for the disposal of this appeal stated briefly are as under :- Shri Pravinchandra Jain, the Second Respondent brought to India a coloured T.V. and a V.C.R. and got them cleared as baggage. The officers of the Customs on 23-8-82 raided and searched the residential premises of the first respondent and seized the two items which were cleared as baggage by the second respondent. The officers of the Customs recorded the statement of the first respondent wherein it was stated that he purchased these two items on payment of Rs. 23,000/- and he also produced a sale voucher to evidence the sale. On 3-11-83 the Customs Officers recorded the statement of the second respondent wherein he had stated, among other things, that he gave these two items to his uncle but had collected Rs. 23,000/- consisting of Rs. 18,000/-Customs duty paid by him and Rs. 5,000/-air fare for London. The Assistant Colloctor of Customs who held the enquiry came to the conclusion that there had been gross mis-use of the baggage concession and there-fore the goods became liable for confiscation. He further held that both the respondents were liable to penalty under Section 112 of the Customs Act. He therefore passed the impugned order. The Respondents herein perferred two appeals. The Collector of Customs (Appeals), Bombay considered the two appeals together and observed that the spirit behind the restriction imposed under para 11-G of I.T.C. order has not been violated, since the person who has cleared the goods has not made any profit by selling the goods at a higher price. The Collector (Appeals) further observed that "the order confiscating the goods absolutely in any case is harsh and not justified by the facts of the case, since even assuming it is a case of sale the respondent No. 1 substantially complied with the precautions envisaged under Section 11-D, since the goods were duty paid and further he is protected by the provisions of Section 11-G of the Customs Act, since the goods were seized from the residential premises and were admittedly meant for pesonal use." The Collector (Appeals), therefore, set aside the order of confiscation of the goods and he further ordered that a caution will meet the ends of justice and accordingly he set aside the personal penalty.
3. Feeling aggrieved by this Order of the Collector (Appeals), the Collector of Customs, Ahmedabad preferred this appeal.
4. Shri Krishan Kumar, the learned Departmental Representative urged that the documentary evidence and the statement of the first respondent Om Prakash Jain established beyond doubt that there was a sale of T.V.and V.C.R. which were cleared as baggage in contravention of the conditions imposed under 1TC order. Shri Krishan Kumar further urged that the T.V. set which was cleared as baggage could not have been sold for a period of 5 years and the same has been done by the second respondent. Shri Krishan Kumar urged that so far as VCR is concerned, it should not be sold until its value is depreciated by 50%. The second respondent has violated this condition also. It was the condition of Shri Krishan Kumar that Collector (Appeals) has failed to take into consideration the above aspect of the case and therefore his order suffers from illegality.
5. Shri D.H. Shah, the learned Advocate for the respondents however, contended that under Section 129-A(2), an appeal against the order of Collector (Appeals) is permissible only if the order is either illegal or improper. Shri Shah urged that the order passed by the Collector (Appeals) is neither illegal nor improper. The Collector (Appeals) did consider the issue in its proper perspective. He has accepted the contention of the respondents that there was no sale of the two items but there was only a gift by nephew to uncle. Further, Shri Shah urged that the Collector (Appeals) had also examined the case by another angle, viz. assuming that there was a sale, nevertheless the facts and circumstances did not call for absolute confiscation or imposition of penalty. In the said circumstances, there was hardly any scope for the department to prefer an appeal as the law stands.
6. Shri Shah further urged, admittedly at the time of clearance, the value of the goods cleared was more than Rs. 36,000/-. On the date of seizure the value was shown as Rs. 18,000/-. Thus the value of the VCR had been depreciated by more than 50% and in the said circumstances it cannot be said that there had been any violation of the ITC condition.
7. Shri Shah further urged there was no dispute that the first respondent was the uncle of the second respondent. The second respondent brought the goods from London. He collected only the Customs duty of Rs. 18,000/-and air-fare of Rs. 5000/-. He did not collect the value of the two articles which he had given to his uncle, Thus there was no proof whatsoever that the second respondent had sold the items to the first respondent. The Collector (Appeals) according to Shri Shah was justified in coming to the conclusion that there was a gift in favour of the first respondent by the second respondent and therefore the order of confiscation and imposition of penalty passed by the Assistant Collector had been rightly set aside by the Collector (Appeals).
8. Considered the submissions made on both sides. The present appeal appears to be ill advised. Collector (Appeals) has come to a correct and just decision. Admittedly, the T.V. and V.C.R. were seized from the residential premises of the first respondent. They were found in the residential premises for his own use. Even assuming that there was a sale of these items by the second respondent, the first respondent, at the time of seizure produced the voucher to evidence the lawful possession of the two items. Section 11-G specifically excludes the applicability of Sections 11D, HE and 11F to the notified goods which were in personal use of the person by whom they are owned, possessed or controlled or kept in the residential premises by a person for his personal use. In the case of notified goods which are found in the residential premises for the personal use of the person in possession.
Such a person was however, required to take precautions prescribed under Section 11-D. The precaution required to be taken under Section 11-D is obtaining a voucher contemplated by Section 11-F. The first respondent not only obtained the voucher to evidence his possession but produced it before the officers who raided his residence. In spite of that, the officers thought it fit to seize the items. The seizure in the circumstances was not only bad but appears high handed.
9. Now coming to the merit of the case, it may be stated that there were two appeals before the Collector (Appeals). The Collector, Ahmedabad had filed only one appeal, apparently because there was one order by the Collector (Appeals) though by that order he disposed of two appeals. In law, the Collector, Ahmedabad, was required to prefer two appeals. However, this deficiency was condoned as Shri Shah had no objection to hear the appeal.
10. Another infirmity which has come to light in this appeal is the non-compliance of the provisions of Section 124 of the Customs Act. In his order the Assistant Collector has observed that the respondents herein have waived the show cause notice and also personal hearing and therefore he proceeded to decide the case on the basis of the evidence available on record. Section 124 of the Customs Act is specific and it does not provide for waiving of the show cause notice or of giving an opportunity of making representation against the order of confiscation.
It, however, provides that at the option of the owner of the goods or the person concerned, the show cause notice and representation could be oral. The order of the Assistant Collector does not disclose that the respondents herein were orally informed of the grounds on which the goods were proposed to be confiscated. If there had been no compliance with the provisions of Section 124 then the goods cannot be conficscated. On this ground alone, the order of the Assistant Collector is liable to be set aside.
11. The first respondent Shri Om Prakash committed no offence. Even according to the Customs authorities he purchased a T.V. and a V.C.R.which were cleared as baggage. There was no allegation much less proof that the first respondent was aware that the second respondent was disposing of the goods in violation of the I.T.C. regulations. In the absence of allegation and proof regarding his knowledge it was not permissible in law, either to confiscate the two notified goods which were admittedly found in his residence and which were there for his personal use or to impose a personal penalty. Therefore, the Collector (Appeals) was wholly justified in setting aside the order of confiscation and penalty imposed upon the first respondent, Shri Om Prakash Jain.
12. So far as the second respondent is concerned, the case of the department was that he sold the two items in violation of the l.T.C.regulations and that the T.V. was sold before 5 years and the V.C.R.was sold before its value got reduced to 50%. Now in the whole of the order of the Assistant Collector there was not even a whisper about what was the value of the V.C.R. at the time of clearance and what was its value when it was disposed of by the second respondent. In the absence of such an allegation there was no scope that the second respondent violated the condition as to this aspect. In so far as.T.V.is concerned, the admitted facts were that the second respondent brought it from London as Baggage and cleared it as baggage. He gave the T.V. as well as the V.C.R. to his uncle. He collected only Rs. 18,000/-which was the duty paid for the two items. Besides, he also collected Rs. 5,000/-towards air fare. He did not collect the value of the two items from his uncle. Thus the essential ingredients of sale are missing. In the said circumstances it cannot be said that there was sale of the V.C.R. and the T.V. by the second respondent. If there had been no sale, then the two items would not become liable for confiscation and no personal penalty could also be imposed on the second respondent. The learned Collector (Appeals) has correctly understood the scope and ambit of Chapter IV-A of the Act. The whole of the chapter is intended to prevent smuggling of goods into India and disposal of the goods so smuggled. From the admitted facts it is seen that the import of the two items was wholly legal. The second respondent brought them from London as his personal baggage and cleared them on payment of duty of Rs. 18,000/-. The goods in question were neither smuggled nor was there any evasion of Customs duty payable in respect of the goods. The order passed by the learned Collector (Appeals) is not only legal but is wholly just.
13. After careful consideration of all the aspects, I see no merits in this appeal and accordingly I dismiss the same.