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V. Vembu Iyer Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtKarnataka High Court
Decided On
Case NumberW.P. No. 317 of 1968
Judge
Reported in1984(15)ELT125(Kar); (1973)1MysLJ258
ActsSea Customs Act, 1878 - Sections 167 and 167(8); Imports and Exports (Control) Act, 1947 - Sections 3; Customs Act, 1962 - Sections 112, 129, 129(1), 160(1), 160(3) and 160(4); General Clauses Act, 1897 - Sections 6; Constitution of India - Articles 226 and 227
AppellantV. Vembu Iyer
RespondentUnion of India (Uoi) and ors.
DispositionPetition dismissed
Excerpt:
.....by the petitioners also does not call for interference by the high court. - he failed to avail himself of that concession. in that view, the impugned order of penalty was perfectly legal......section 129(1) makes it obligatory on the person filing an appeal to deposit the duty demanded or penalty levied when the order or decision appealed against relates to any duty demanded in respect of goods which are not under the control of customs authorities or any penalty levied under the act. the proviso gives power to the appellate authority in particular cases to dispense with such deposit either unconditionally or subject to such conditions, as it may deem fit, when it is of the opinion that the deposit of duty demanded or penalty levied will cause hardship to the appellant. the contention of mr. srinivasan related to the manner of exercising the discretion under the said section. he said that if the appellate authority is of the opinion that the deposit of penalty levied will.....
Judgment:
ORDER

1. In this petition, under Articles 226 and 227, V.V. Iyer, the petitioner challenges the validity of the proceedings taken and the penalty imposed on him by the Collector of Customs of Bombay, by the order dated 29-7-1963.

2. The events leading to the petition are these : The petitioner was the sole proprietor of M/s. New India Corporation, Bombay during the period of 1953 to 1957. He was engaged in the business of importing sprayers operated either by hand or machines. The customs authorities proceeded against the petitioner for the offence of 'Under-invoicing' and unauthorised importation of the consignments. After giving opportunity to the petitioner, the Collector of Customs found the petitioner guilty of the offence under Section 167, clause (8) of the Sea Customs Act, 1878 read with Section 3 of the Imports and Exports (Control) Act, 1947. An aggregate amount of Rs. 3,23,800 as personal penalty was levied. Being aggrieved by the order, the petitioner filed appeals 201 to 206/64 before the Central Board of Excise and Customs. He did not pay the penalty but, pleaded his inability to pay. By a letter dated 11-6-1964, the petitioner was informed that the Board would consider all the appeals provided the petitioner deposited a sum of Rs. 1,50,000 by 3-7-1964 and produce Bank surety for the balance. Alternatively he was given the choice to deposit, the full amount of penalty imposed in any one of the 5 cases and upon, such deposit that case would be considered on merits keeping the remaining appeals pending. The petitioner did not choose to do so. On 17-7-1964, another letter was issued referring to the non-compliance of the concession offered to the petitioner in the matter of depositing the penalty and further calling upon him to deposit the entire penalty before 5-8-1964 failing which it was stated that the appeals would be rejected. The petitioner did not respond. Consequently all the appeals were rejected by the Board under Section 129 of the Customs Act, 1962 ('The 1962 Act') by the order dated 21-8-1964. His further revision petitions to the Government of India were also dismissed without entering into the merits. When the penalty was sought to be recovered by the revenue recovery process, the petitioner has preferred this writ petition.

3. The following two contentions in the alternative were urged for the petitioner by Mr. Srinivasan :

(i) That the rejection of the appeals, without exercising the discretion under Section 129 of the 1962 Act, was illegal; and

(ii) That the imposition of penalty under Section 167(8) of the Sea Customs Act, 1878, was unauthorised as the said Section was not attracted to the offence committed.

4. The first contention presents us little difficulty. Section 129(1) makes it obligatory on the person filing an appeal to deposit the duty demanded or penalty levied when the order or decision appealed against relates to any duty demanded in respect of goods which are not under the control of Customs Authorities or any penalty levied under the Act. The proviso gives power to the appellate authority in particular cases to dispense with such deposit either unconditionally or subject to such conditions, as it may deem fit, when it is of the opinion that the deposit of duty demanded or penalty levied will cause hardship to the appellant. The contention of Mr. Srinivasan related to the manner of exercising the discretion under the said Section. He said that if the appellate authority is of the opinion that the deposit of penalty levied will cause undue hardship to the appellant, then the authority cannot pass an order dispensing with a part of the deposit which the appellant was required to pay, but, it should be the entire deposit with or without any condition- In other words, he contended that the appellate authority in the instant case should have made the order dispensing with the deposit of the aggregate amount of Rs. 3,23,800 and not directing the appellant to deposit a part of it, i.e. Rupees 1,50,000 as he did.

5. We do not think that the provisions of Section 129 lend support to the contention. That contention also runs counter to the decision of the Supreme Court, in Navinchandra v. B.C. Central Board, Delhi, : 1981(8)ELT679(SC) . C.A. Vaidialingam, J. at page 2283 said :

'...But in the Act by the proviso to Sub-section (1) of Section 129 discretion has been given to the appellate authority to either waive the deposit of the entire amount of penalty or duty or reduce the quantum to be so deposited if the appellate authority is of the opinion that the requirement regarding the deposit of the full amount of penalty or duty will cause undue hardship to an appellant.'

We have already pointed out that the appellant made a request to exempt him from depositing the penalty levied. His plea was considered by the appellate authority who reduced the deposit from Rs. 3,23,800 to Rs. Rs. 1,50,000 with a Bank guarantee for the balance. Alternatively he was given the choice to deposit the full amount of penalty levied in any one of the five cases. As per this order, he could have deposited Rs. 12,100 which was the penalty imposed in one of the orders under appeal and proceeded with the appeal, keeping the other appeals pending. He failed to avail himself of that concession. Consequently, the appeals were dismissed. In our opinion, the appellate authority has properly exercised its discretion under Section 129 and, it was not incumbent upon it to dispense with the requirement of the entire deposit. It could take into consideration all the circumstances of the case and the means of the appellant and pass an order either dispensing with the deposit of the entire disputed amount or a part of it. It may be with or without any condition.

6. We shall now turn to the second contention. The approach of Mr. Sreenivasan was as follows: He submitted that the petitioner committed the offence during the period 1953 to 1957 when the Sea Customs Act, 1878, was in force. The proceedings against the petitioner commenced in the year 1960.

The said Act was repealed by the coming into force of the 1962 Act. Thereafter, on 29-7-1963, the Collector of Customs levied the penalty under Section 167(8) of the repealed Act. Counsel referred to Section 160(4) of the 1962 Act and submitted that the order levying the penalty could have been passed only under the provisions of the 1962 Act and not under the provisions of the repealed Act. The impugned order, according to him was, therefore, without any authority of law.

7. At one stage we were not inclined to permit learned Counsel to urge this contention because, it was not raised before the authorities below. But on second thought, we changed our mind in view of the importance of the question and the huge amount of penalty involved in the case.

In order to appreciate the contention, we have to set out the relevant sections :

'160(1) The enactments specified in the fourth column thereof.

* * * * * * * *160(3) Notwithstanding the repeal of any enactment by this section,-

(a) any notification, rule, regulation, order or notice issued or any appointment or declaration made or any licence, permission or exemption granted or any assessment made, confiscation adjudged or any duty levied or any penalty or fine imposed or any forfeiture, cancellation or discharge of any bond ordered or any other thing done or any other action taken under any repealed enactment shall, so far as it is not inconsistent be deemed to have been done or taken under the corresponding provisions of this Act.

* * * * * * * *(4) The Act shall apply to all goods which are subject to the control of customs at the commencement of this Act notwithstanding that the goods were imported before such commencement.

* * * * * * * *(8) The mention of particular matters in Sub-sections (4), (5), (6) and (7) shall not be held to prejudice or affect the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeals.'

(The remaining clauses are omitted as not necessary.) Section 6 of the General Clauses Act, 1897 as far as it is relevant, provides :

'6. where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not-

* * * * * * * *(c) affect any right, privilege, obligation or liability acquired, or incurred under any enactment so repealed ; or

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture, or punishment may be imposed as if the repealing Act or Regulation had not been passed.'

8. The offence committed by the petitioner was punishable under Section 167(8) of the Sea Customs Act, 1878. The penalty provided therein was three times the value of the goods. Similar offence was also punishable under Section 112(b)(ii) of the Act, but the penalty provided is up to five times the duty sought to be evaded.

It is true that provisions of the 1962 Act shall apply to all goods subject to customs notwithstanding that the goods were imported before the commencement of the said Act. But Sub-section (4) of Section 160 is subject to the applicability of Section 6 of the General Clauses Act, 1897. As the penalty provided for the offence under Section 112(b)(ii) of the 1962 Act is different from that provided by the provisions of Section 167(8) of the Sea Customs Act, 1878, the proceeding commenced against the petitioner under the Sea Customs Act, 1878, must be allowed to continue by the application of Section 6 of the General Clauses Act. In that view, the impugned order of penalty was perfectly legal.

Even otherwise the original and the appellate authorities under both the said Acts being the same and the petitioner having had the benefit of the lesser penalty by the original authority and also the benefit of the order under Section 129 of the 1962 Act before the appellate authority, we decline to interfere with the impugned order in the exercise of our writ jurisdiction. The petitioner in our opinion was in no way prejudiced by the proceedings taken and continued by the Sea Customs Act, 1878.

9. There is also one other reason why we should not exercise our jurisdiction, i.e., laches on the part of the petitioner. The Central Board of Excise and Customs dismissed the appeals by its order dated 21-8-1964. The revision petitions preferred by the petitioner were dismissed by the Government of India by their order dated 23-5-1966. This writ petition was preferred in January, 1968. There is thus an inordinate and unexplained delay on the part of the petitioner in approaching this Court.

10. In the result, the petition fails and is dismissed. In the circumstances, there will be no order as to costs.


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