1. Appeal under Section 129A of the Customs Act, 1962 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the Central Board of Excise and Customs, dated 11-9-1981 in No. 586 of 1981.
2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri K. Srinivasan, Advocate for the appellant and upon hearing the arguments of Shri V. Ramachandran, Sr.
Departmental Representative for the respondent, the Tribunal makes the following Order : 3. The MSV Zoodu Salamy MMG 22 along with its tackle and gear was ordered to be confiscated under Section 115 of the Act by the Collector of Central Excise and Customs, Bangalore on a finding that it was used in the smuggling of 9989 wrist watches of foreign origin which were also confiscated under Section 111 (d) and 111 (e) of the Act vide order C. No. VIII/10/17/79-Cus. (O. R. 11/79) dated 1-10-1980. The vessel had been pledged to the Canara Bank by one P. Abdul Sathar in a sum of Rs. 2,90,000/- as security for loan advanced to him. During, the course of the proceedings before the Collector, the Canara Bank was put on notice and it claimed that the vessel could be ordered to be confiscated only subject to its charge. This contention of the Bank was not accepted by the Collector. The Bank went in appeal to the Central Board of Excise and Customs. After taking note some case laws cited before it, the Board held that the plea that the vessel would not be liable to confiscation under Section 115 of the Act is not maintainable. Eventually the Board rejected the appeal of the Bank. The Bank filed a revision application before the Government of India which has been transferred to the Tribunal in terms of Section 131-B of the Act.
4. The only point urged in the present appeal is that because of the pledge of the vessel to the Bank, it is entitled to claim priority in respect of the amount advanced as loan and it has a first lien on the vessel. In support of this proposition, the learned counsel for the appellant referred us to the judgment of the Supreme Court in the case of "Bank of Bihar v. State of Bihar" reported in 1971 S.C. 1210. In that case their Lordships of the Supreme Court held that where some goods which had been pledged to the Bank of Bihar were seized and sold by Certificate Officer, Patna, to meet arrears in respect of cane cess, by a mere act of lawful seizure Government could not deprive the Bank of Bihar of the amount which was secured by the pledge of the goods to it. As the act of the Government resulted in deprivation of the amount to which the Bank of Bihar was entitled it would be bound to reimburse the Bank for such amount which the Bank in ordinary course would have realised by sale of the goods pledged with it on the pawn or making a default in payment of debt. The learned counsel for the appellant also referred to the judgment of the Madhya Pradesh High Court in 1977 MP 188 which, he said, followed the decision of the Supreme Court in the case cited earlier except for the difference that in the Madhya Pradesh case the issue was between two creditors, neither of them being a Government.
5. The confiscability of the vessel is not in dispute before us.
Section 126 of the Act provides that when any goods are confiscated under the Act, such goods shall thereupon vest in the Central Government. The question is whether a situation where goods have been confiscated would be similar to one where goods are seized for satisfying a valid demand of Government. We note that Section 142 of the Act provides for recovery of sums due to Government and one of the options available to Government is to realise the amount as if it were an arrear of land revenue, a procedure in which goods or property could be seized and sold in satisfaction of sums due to Government. We would consider that the case dealt with by the Supreme Court would be relevant to a proceeding under Section 142 of the Act rather than one under Section 126 wherein the vesting of confiscated goods in Government, it appears to us, is absolute. On a valid order of confiscation being passed, the property vests absolutely in Government.
In this view of the matter we find that the claim of the appellant is not maintainable in law. Accordingly, the appeal is dismissed.