1. S/Shri Naresh A. Tejwani and Nandalal R. Sachdeo have filed appeals registered under CD. (BOM) No. 65 & 66 of 1982 respectively, against the Order No. S/14-4-923/81 Pint dt. 13.8.82 of the Addl. Collector of Customs (Prey.) Bombay under which he has inter alia ordered confiscation of goods seized from M/s. Reshma Art Gallery which is owned jointly by the two appellants and ordered levy of penalty of Rs. 5C00/- on each of the appellants. Since the appellants had been aggrieved by the common order their appeals had been heard together and a common order is being passed in the matter.
2. The learned Counsel Shri Desai for the appellants has argued that the appellants did not receive the show cause notice within 6 months of the date of seizure of the goods from their shop and hence in terms of Section 110(2) of the Customs Act they asked the Addl. Collector to release the goods in their letter dt. 18.2.82. However, on 23.2.82, the appellants received a letter stating that the showcause notice was issued on 25,1.82 The appellant requested for inspection of the office records, to verify the contention of the Appellate Collector. Except for the endorsement in the file which has been reproduced in the order-under-appeal, there was no evidence to show that the show cause notice had been issued by the appellants within 6 months from the date of seizure on 17.8.81. The learned Advocate drew my attention to Section 124 of the Customs Act which says that no order of confiscation of any goods or imposing any penalty should be made unless the owner of the goods is given a notice in writing and given an opportunity of making representation. The learned Advocate has further referred to Section 153 ibid to say that the service of notice should have been as mentioned therein i.e. by tendering it in person or sending it by registered post and in case of failure to serve the notice in either way to affix it on the notice board of the Custom House. There was no evidence with the Addi. Collector that, the show cause notice reported to have been issued on 27.1.82 was actually issued in terms of Section 153. In this connection, the learned Advocate referred to the Addl.
Collector's findings that the show cause notice should be presumed to have been served. The learned Advocate contended that it was not known in which of the 3 manners the Addl. Collector had held the service of the notice had been done. He stated that the same point was raised before the Addl. Collector at the time of personal hearing, and the Addl. Collector had merely gone on the basis of presumption that the notice was issued without any fact in support of the same. He therefore argued that the order of the Addl. Collector of Customs was not valid and liable to be set aside for the aforesaid reasons.
2. As regards the merits of the case, Shri Desai submitted that the appellants had submitted a statement of reconciliation of the goods seized with the registers maintained by them in their letter dt.
18.2.81. According to the appellants, they had classified the goods seized fiom them into two categories namely, notified and falling under Section 123 of the Customs Act, and secondly others. In support of non notified goods, the burden of proof was on the department and the department had not discharged the same. All the same the appellants had submitted an explanation for the purpose of non-notified goods and the receipts under which these goods were purchased. In case of certain goods as mentioned in para 9 of the appeal, there were no markings or any evidence to show that the goods were of foreign origin. The confiscation of the goods was therefore not sustainable. Amongst the notified goods there was 1 chiffon sari and since this was a silk sari, the same was also not covered under Section 123 of the Customs Act as held by the Addl. Collector, and it was therefore not liable to confiscation in absence of any evidence to show that the same was smuggled. In case of notified goods, the appellants had maintained the registers, but the description of the goods as mentioned in the registers differed from the description given in the Panchanama relating to the seizure, and hence the Addl. Collector had held that these goods were not entered in the registers and were in excess. This erroneous impression happened with respect to goods which were entered as dress material. The description in the register would depend on the description in the baggage receipt under which the goods were purchased, and hence the mis-classification of the goods. In respect of 1 sari the panchanama recorded that the same was old. Though the appellants have furnished a detailed explanation of the excesses and the shortages, the Addl. Collector had not dealt with the explanation and jumped to the conclusion that the excesses and the shortages were contravening the Customs Rules. The learned Advocate therefore submitted that if the excesses are set off against the shortages, the goods would be fully accounted. Accordingly, he requested that the appeal be allowed.
3. Shri Krishan Kumar, the learned departmental representative has explained that the show cause notice was issued to the appellants as mentioned in the Addl. Collector's order. However, in answer to my question he explained that there was no record in the file to show whether the show cause notice was issued by registered post or by ordinary post. He has also offered the file for my inspection. I find from the inspection of the file that there is no evidence to show that the show cause notice was issued by registered post or that the same was received by the appellants. The learned departmental representative has further argued that in case the show cause notice could not be issued in time, the Addl. Collector could have granted extension as permitted under Section 110(2) of the Customs Act. As regards the merits of the case he argued that the discrepancies were due to lack of proper maintaining of records. The statements have been recorded under Section 108 of the Customs Act from S/Shri Naresh A. Tejwani and Nandalal R. Sachdeo and they had stated that they could not exphdn anything about the seized goods. The goods mentioned in Annexure A & B of the Pancha-namas were clearly contravening the Notified Goods (Prevention of Illegal Import) Rules 1969, and hence their confiscation was correct. The Panchanamas also recorded that, the goods were of foreign origin. In the aforesaid circumstances, he prayed that the order of the Addl. Collector of Customs be upheld and the appeal be dismissed.
5. I have examined the submissions on both the sides. The preliminary point which comes up for consideration is the determination as to whether the show cause notice as required under Section 124 of the Customs Act was issued to the appellants before the order of confiscation and imposition of penalty was made by the Addl. Collector of Customs. The learned Advocate of the appellants has contended that the show cause notice was not issued. There is no evidence to show that the show cause notice was issued. The relevant notings in the official file do not satisfy the requirements of Section 153 of the Customs Act as contended by the Advocate. Hence on this preliminary ground, I find that the order of confiscation and very of penalty passed by the Addl.
Collector of Customs in terms of Section 122 is bad. In this view it is not necessary for me to go into the merits of the case. Accordingly, I set aside the order of Addl. Collector of Customs and allow the appeals. The goods valued at Rs. 1070/- confiscated absolutely; under Section 11 l(d) and (h) are ordered to be released to the appellants.
Similarly, the fine of Rs. 2000/- in lieu of confiscation of the goods valued at Rs. 9060/-and Rs. 1083/- as per Annexures B & C of the panchanama is also ordered to be refunded. Similarly, the penalties of Rs. 5000/- on each of the appellants S/Shri Naresh A. Tejwatii and Nandalal R. Sachdeo is also to be refunded.