1. The captioned appeal was initially filed as a Revision Application before the Central Govt. which, under Section 131-B of the Customs Act, 1962, has come as transferred proceedings to this Tribunal for disposal as if it were an appeal filed before it.
2. The brief facts leading to the present appeal and necessary for its disposal are : (a) On 12-5-69, Customs Officer searched the Appellant's residence and recovered 156 watches of foreign origin ; (b) An insured parcel addressed to Smt Pandey was got delivered to her at G.P.O., Lucknow. From the said parcel, Customs staff recovered, in the Divisional Office, Lucknow, 230 foreign watches ; (c) The aforesaid watches were seized by the Customs staff under Section 110 of the Customs Act, 1962 (hereinafter referred to as the Act) in the reasonable belief that these had been imported into India in contravention of the prohibitions under the Import & Export Control Act read with Section 11 of the Act; (e) A show-cause notice dated 27-1-1970 was issued to Shri Pandey after grant of extension of time for issue of notice by the Collector cf Central Excise, Allahabad, as a special case, asking him to show cause why the seized watches should not be confiscated under Section 111 of the Act and why a penalty should not be imposed on him under Section 112; (f) A corrigendum dated 27-12-1978 was issued by the Assistant Collector, Lucknow, to show cause to the Deputy Collector Allahabad.
' (g) After holding adjudication proceedings, the Deputy Collector Allahabad, vide his order of 30-12-1978 (i) confiscated the seized watches under Section 111 of the Act; and (ii) imposed a penalty of Rs. 20,000/- on Shri Pandey under Section 112 of the Act.
(h) The appellant preferred an appeal against the Assistant Collector's order which was disposed of by the Appellate Collector of Customs Delhi vide his order of 8-4-1982, in which he :- (i) reduced the penalty on Shri Pandey to Rs. 10,000/-; and (ii) otherwise, upheld the Order-in-Original.
3. It is against the last-mentioned order that the appellant is before us. Several contentions have been made therein but it does not seem necessary, for disposal of the present appeal to refer to all of them.
The case was heard on 27-10-1983. Shri Effendi, the learned Counsel for the appellant vehemently urged that the impugned adjudication order dated 30-12-1978 was wholly without jurisdiction. Though the seizure was effected on 12-5-1969 at Lucknow in the jurisdiction of the Collector of Customs, Allahabad, the Patna Customs Collectorate was established on 4-3-1972 by Customs Notification No. 35 and the Collector of Customs, Patna was vested with jurisdiction inter alia over Lucknow District. This notification had the effect of extinguishing the jurisdiction of the Collector of Customs, Allahabad.
This point was raised before the adjudicating authority - Deputy Collector of Customs, Allahabad-who, however, did not touch upon this point in his order dated' 30-12-78.
4. Shri Effendi also urged, equally vehemently, that the goods were seized on 12-5-1969 but the show-cause notice was issued on 27-1-1970, that is more than six months from the date of seizure. The Collector appeared to have granted an extension of the period for issue of the show-cause notice (as seen from the Order-in-Original) but without giving an opportunity to the appellant for showing cause against grant of such extension. The show-cause notice was, therefore, bad in law as also the proceedings in pursuance thereof. In this context, reliance was placed on the decision of the Supreme Court in the case of Charan Das Malhotra (A.I.R. 1972 S.C. 689). Though this point was taken before the lower authorities, they had not really touched upon it.
5. Shri Effendi also stated that a criminal complaint was filed by the customs against the appellant on 30-3-1975. However, the trying Magistrate, vide his order of 29-9-1978, discharged the accused on the ground that the prosecution had miserably failed to adduce oral or documentary evidence in the case, despite ample opportunity.
6. It was also urged that the corrigendum of 27-12-1978 to the show-cause notice, Issued beyond six months from the date of seizure of the goods was again without jurisdiction.
7. In the aforesaid circumstances, It was prayed, the appeal should be allowed and the penalty imposed on the appellant should be set aside.
8. Shri Ramanathan, Senior Departmental Representative, in reply to Shri Effendi's arguments, submitted that the seizure of the goods was effected on 12-5-1969 before the creation of the Patna Collectorate of Customs. Notification No. 35 of 4-3-1972 did not modify or cancel Notification No. 37 of 1-2-1963 appointing the Collector of Central Excise as the Collector of Customs for the Allahabad Collectorate in which fell Lucknow Division. Therefore, it was not correct to say that the 1972 notification had the effect of extinguishing the Allahabad Collector's jurisdiction to deal with the present case. The corrigendum merely had the effect of informing the appellant to show cause to the Deputy Collector in whose power the case fell. There was no irregularity or infirmity in this. He. however, agreed that the show cause notice was issued after the date of seizure of the goods. No.opportunity was "given to the appellant to show cause against the proposed extention. However, this would not vitiate the imposition of penalty on the appellants. For this proposition, he relied on 1974 MLJ-88-A.I.R. 1975 Madras 43 in the case of Collector of Customs, Hyderabad v. Amruta Lakshmi.
9. In reply, Shri Effendi contended that when the law required return of the goods (because no show-cause notice was issued within the prescribed period) thus effectively absolving the appellants of the extreme penalty of confiscation, there could be no question of levy of a penalty either because the question of penalty arose only if the goods were liable to confiscation. He also contended that the 1963 notification stood superseded by the 1972 Notification.
10. We have carefully considered the submissions of both sides. It Is an admitted position that the show-cause notice was issued in this case more than six months after the date of seizure of these goods. The Collector seems to have granted extension of the initial six months period for issue of the notice but this has been done without affording an opportunity to the appellants of showing cause against the proposed extension. This requirement is clearly laid down by the Supreme Court in the case of Charan Das Malhotra (A.T.R. 1972 S.C. 689). The Supreme Court held in that case that the power of the Collector to extend the period to give notice under Section 124(a) was to be exercised only on "sufficient cause being shown". This expression envisaged at least some sort of enquiry on facts placed before the authority and determination by him of those facts. An opportunity of representing against the proposed extension must be given to the person from whom the articles are seized. In para 15 of the judgment, the Supreme Court observed : "But in the present case also, the right to restoration of the seized goods is a civil right which accrues on the expiry of the initial six months and which is defeated on an extension being granted, even though such extension is possible within a year from the date of the seizure." "We cannot also agree with the learned Judge that there is no indication in the Act to suggest that the Collector is required to act judicially, firstly, because the proviso requires determination on facts and not on mere suspicion and a sufficient cause being made out by the applicant-officer, and secondly, because a civil right of a citizen to the restoration of the goods on expiry of the period, whether initial or extended, is affected." 11. In A.I.R. 1975 Madras 43, the Madras High Court has held that non-issue of a show-cause notice within the period of six months contemplated by Section 110(2) does not take away the power of the department to proceed on with the confiscation of the goods and penalty proceedings under Section 124. The Court further held (in para 9) :- "Nor are we able to accept the view of the learned Judge that a vested right is created in favour of the owner of the goods when a show-cause notice under Section 124 is not given within six months as provided for under Section 110(2)." The effect of this decision is that the claim of the person from whose possession goods are seized, on the ground of non-issue of show-cause notice within the period of six months or in the event of extension of the notice period without his being heard, gets extinguished once the goods are properly confiscated under Section 124.
12. As against the above decision, we have the decision of the Calcutta High Court in 1982 E.L.T. 902 (Cal.) in Kantilal Somchand Shah and Anr.
in which the Court held that since the provisions of Section 110(2) of the Act are mandatory, the goods retained unlawfully cannot be confiscated without contravening the said mandatory provisions and such confiscation would be improper, void, irregular and without jurisdiction and that the petitioner would be entitled to the return of the goods seized from his possession.
12. (a) We have also a recent judgment of the Delhi High Court in the case of Shanti Lal Mehta reported in 1983 E.L.T. 1715 wherein the Court has discussed at length conflicting judgment of various High Courts on the question. The Court held that the retention of the seized goods beyond the time-limit prescribed under Section 110, without a valid order of extension - after issue of a notice to the affected party and hearing him-was illegal and without jurisdiction as the same was directly in contravention of Section 110(2) of the Act. The right of restoration of the seized goods, the Court goes on to say is a vested civil right which accrues to the owner of the goods on the expiry of six months from the date of seizure unless the period is extended by a valid order which can go upto another six months. Anything that the department does in pursuance of such illegal detention would also be illegal. The order of confiscation which the Customs authorities passed in 'the case before the Court was held to be illegal. In the words of the Court: "There could not be any decision in an adjudication proceeding under the Act if inherent nullity lies at the very root of the said proceedings. A quasi-judicial authority in exercising quasi-judicial power cannot take advantage of its own illegality. The whole object of Section 110(2) of the Act become nugatory and meaningless, if by contravening the mandatory provisions of the statute the Collector of Customs confiscate the seized goods which he has no right to retain and must have been returned to the owner long before." 13. Following the ratio of the decision in 1982 E.L.T. 902 (Cal.) and 1983 E.L.T. 1715, we must hold that the confiscation of the goods in the instant case cannot be sustained and we, therefore, set it aside.
The goods shall be returned to the appellants within three months from the date of communication of this order.
14. The point taken up by Shri Effendi that the corrigendum to the show-cause notice was without jurisdiction, because 'it was issued after the notice period in Section 110, is without substance since the corrigendum only asked the appellant to show cause to the Deputy Collector, in whose power the case fell, instead of to the Collector.
There is no irregularity, impropriety or illegality in this.
15. The learned Counsel for the appellants did not address the Bench on the merits of the case (evidence adduced by the Department against the appellants) with respect to the findings that the seized goods would be liable to confiscation and the appellants to penalty. Nor does the memo of appeal advert to this aspect. We are, therefore, not required to go into this aspect of the matter. However, since the confiscation has been set aside by us, it would not follow automatically that the order levying penalty must also be set aside. Section 112 makes any person : (i) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act, or (ii) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111. liable to a penalty. A careful reading of this provision would show that if the adjudicating officer records a finding, after due process, that the goods are liable to confiscation, he may proceed to impose a penalty on any person who comes within the ambit of Section 112. The goods may or may not, in fact, be physically available for confiscation and being taken over by the departmental authority. Nothing in the several pronouncements, we have referred to, lead us to conclude that in a case where goods are ordered to be released for non-compliance with Section 110(2), the person concerned cannot be proceeded against under Section 112, if the facts and circumstances of the case warrant and a clear finding is recorded that the goods in question are liable to confiscation and that the person who is to be penalised falls within the mischief of Section 112. As we have stated earlier, the learned Counsel for the appellants did not address the Bench with regard to the merits of the matter, that is, the evidence against the appellants. As such we see no reason to interfere with the order of penalty.
16. Though the appeal memorandum states that the appellant was not afforded an opportunity of being heard by the adjudicating authority despite a request to that effect, the Counsel for the appellant did not urge this ground before us.
17. The only submission of the appellants remaining for consideration is the question of jurisdiction of the Deputy Collector, Allahabad to adjudicate the case. Customs Notification No. 37 dated 1-2-1963 issued by the Central Government under Section 4(1), appointed, among others, Collector of Central Excise, Allahabad., to be the Collector of Customs within his jurisdiction ; so also Deputy Collectors posted under him to be Deputy Collectors of Customs within their respective jurisdictions.
On 4-3-1972, Notification No. 35 was issued appointing the Collector of Customs (Preventive), Patna, to be the Collector of Customs for the areas specified therein. Lucknow District of U.P. was one of the specified areas. This notification did not, in terms, supersede or modify Notification No. 37 of 1963. The Counsel for the appellants produced before us a copy of letter No. 552/25/72-LC-I dated 1-5-1972 from the Under Secretary to the Government of India to the Collector of Customs, Patna. The letter reads thus: "Subject I-Nepal Jurisdiction of the Collector of Customs (Preventive) Patna-Clarification regarding.
In forwarding herewith a copy of the Notification No. 35-Custom dated 4th March, 1972, I am directed to say that the Collector of Customs (Preventive) Patna will have jurisdiction over the various districts of Uttar Pradesh, Bihar and West Bengal States as given in this Notification. He will adjudicate all the Customs cases falling within his power, if the goods have been seized by any Custom and Central Excise Officers in these Districts. Customs cases detected in the remaining Districts of the States will be adjudicated by the Collector of Customs and Excise concerned in these States." It is clear from this that "the Collector of Customs, Patna was to adjudicate Customs cases falling within his power if the goods had been seized by any Customs or Central Excise Officer in the District specified in Notification No. 35/72. It follows, therefore, that Customs cases which fell in the power of the lower authorities (such as the Deputy Collector, in this case) did not have to be adjudicated by the Collector of Customs, Patna. The lower authorities would have continued jurisdiction to adjudicate cases falling within their respective powers. This view is supported by the fact that Notification No. 35/72 did not modify in any way Notification No. 37/63. We do not, in this view of the matter, agree that the Deputy Collector, Allahabad acted without jurisdiction in adjudicating the instant case, 18. In the result, the appeal is partly allowed to the extent of setting aside the order of confiscation of the watches but is rejected in so far as the levy of penalty on the appellants is concerned.
19.I regret my inability to agree with my learned brother Sankaran on the question of the jurisdiction of the Deputy Collector of Central Excise, Allahabad, to have adjudicated on the issues arising in this case.
(a) the show-cause notice was issued and adjudication commenced on or about 27-1-1970; (b) a corrigendum was issued to the said show cause notice on 27-12-1978 requiring the Appellant to show-cause to the Deputy Collector of Central Excise, Allahabad ; (c) the Deputy Collector of Central Excise, Allahabad made his order in adjudication on 30th December, 1978 i.e. within three days thereafter ; (d) in the meanwhile, Notification No. 35-Cus., dated 4th March, 1972 was issued appointing the Collector of Customs (Preventive), Patna, to be the Collector of Customs for the District of Lucknow amongst other Districts in the States of U.P., Bihar, West Bengal and Sikkim ; (e) on 24-2-1978 another Notification was issued appointing the Deputy Collector of Customs, Muzaffarpur to be the Deputy Collector of Customs within the jurisdiction of the Collector of Customs (Prev.), Indo-Nepal Border, Patna (Notification No. 33B-Cus., dated 24-2-1978), 21. It is not, therefore, as if merely the Collector of Customs, Patna had been appointed. A Deputy Collector of Customs also came to be appointed specifically for the areas included within the jurisdiction of the Collector of Customs (Prev.), Patna and amongst them the District of Lucknow.
22. It is not necessary that the aforesaid Notification No. 35-Cus.
should have been issued in modification or supersession of the earlier Notification constituting the Collector of Central Excise, Allahabad to be the Collector of Customs within his jurisdiction. It is axiomatic in Jaw that if a later enactment, notification or order is so repugnant and inconsistent with the provisions of an earlier one that the two cannot stand together, the earlier is abrogated by the latter. When, therefore, the Collector of Customs (Prev.), Patna had been appointed to exercise jurisdiction over the District of Lucknow, it cannot be that the Collector of Central Excise, Allahabad continued to exercise any such jurisdiction specifically vested in the Collector of Customs (Prev.), Patna. The divestiture of his jurisdiction in so far as Lucknow is concerned is complete when the Collector of Customs (Prev.), Patna had been appointed to exercise jurisdiction over Lucknow. Nor does the Notification No. 35-Cus. make any reservation for the continuance of the jurisdiction of the Collector of Central Excise, Allahabad. It does not say that the Collector of Customs (Prev.), Patna will also concurrently exercise jurisdiction along with the Collector of Central Excise, Allahabad.
23. The same applies to the Deputy Collector of Customs, Muzaffarpur.
Even if till 24-2-78, the jurisdiction of the Deputy Collector of Central Excise, Allahabad may be assumed to have continued unimpaired at least on or from the said date he had no jurisdiction.
24. In the premises, I would conclude that the order of adjudication was without jurisdiction and hence a nullity in law. The Appeal, therefore, should succeed.