Sankar Prasad Mitra, C.J.
1. This appeal and Appeal No. 72 of 1973 arise out of the judgment and order of Sabyasachi Mukharji, J., D/- 13-7-1972 on an application under Article 226 of the Constitulion. The petitioners before the trial court were Messrs. Hindustan Motors Ltd. and Rajendra Prosad Jhunjhunwala, Vice-President (Finance) of the Hindustan Motors Ltd. The respondents were the Collector of Customs and Central Excise, West Bengal, several Customs Officials and the Union of India. In this judgment we propose to cover both the appeals. The appellants in the present appeal are the respondents in Appeal No. 72 of 1973. Let us discuss the relevant facts of the case. On December 15, 1967, an import licence was issued in favour of Hindustan Motors Ltd., for importing primary nickel. Items Nos. 1 and 2 of this licence are-- (1) 'Country from which consigned' and (2) 'Country of origin.' Against the aforesaid items there are blank spaces and thereafter the words 'All countries excluding Union of South Africa and South West Africa' have been printed. In the first blank space against 'Country from which consigned' the following countries have been type-written 'USSR, Poland, GDR, Czechoslovakia, Yugoslavia, Rumania,Hungary, Bulgaria.' In the blank space against 'Country of origin' the word 'do' has been typed in. From a plain reading of the licence, therefore, there can be no doubt that the goods are to be consigned from one of the countries the names whereof have been typed out and the goods must have as their origin one of the same countries.
2. In March, 1969, 21 drums of primary nickel were shipped from Bulgaria against orders placed by Hindustan Motors Ltd. They also opened the letter of credit in terms of the licence. The goods were cleared by them from the Bonded Warehouse after full payment of customs duty from time to time.
3. Between October 4, 1969 and October 22, 1969 there were searches and seizures by the Enforcement Directorate of the Central Government of Documents at, inter alia, the factory premises, the office premises of Hindustan Motors Ltd., and the residence of some of the officers of the said company under Section 19-D of the Foreign Exchange Regulation Act, 1947.
4. On November 7, 1969 the Customs Authorities effected a seizure of 9 drums of primary nickel under Section 110 of the Customs Act, 1962.
5. Between October 15, 1969 and November 29, 1969 on diverse dates the Enforcement Directorate served notice under Section 19-E of the Foreign Exchange Regulation Act for examination of persons and for documents.
6. On December 4, 1969 Hindustan Motors Ltd., and some of its officers moved an application in this court under Article 226 of the Constitution against the aforesaid search and seizure by the Enforcement Directorate. The Customs authorities were not parties to this application. The application was marked as CR No. 7477 (W) of 1969. P. K. Banerjee, J. issued a Rule and an interim order in terms of Clause (d) of the prayers in the petition. The clause was as follows :
'Injunction restraining the respondents, their servants and agents from acting upon and/or enforcing and/or taking any proceedings under or in connection with the said illegal search and seizure and/or any of the said notices Nos. SIC8/68-69/DG/OM/5/69/70/ 136 dated 7th November, 1969 to petitioner No. 2, SIC8/68/69/143/DG/OM/5/69-70 dated 18-11-1969 topetitioner No. 4 and SIC/68/69/DG/OM/5/ 69-70 dated 29-11-1969 to petitioners Nos 2, 3 and 5 under Section 19-E of the said Act, and/or stay of operation of the same pending the disposal of this application.'
7. It is obvious that the order of injunction was directed against the Enforcement Directorate only.
8. On December 23, 1969 the Enforcement Authorities moved an application inCR No. 7477(W) of 1969 for vacating the interim order of injunction. The court did not vacate the order but restricted the order of injunction to the petitioners to the said Rule only.
9. Between January 15, 1970 and March 16, 1970 Civil Rule No. 7477(W) of 1969 was heard by P. K. Banerjee, J.
10. On May 4, 1970 the Collector of Customs and Central Excise, made an ex parte order under Section 110(2) of the Customs Act, 1942 extending the time for issue of show cause notice by a period of six months from May 6, 1970 in the matter of seizure of 9 drums of nickel as aforesaid. This order extending the time was challenged in the application before Sabyasachi Mukharji, J.
11. On May 8, 1970 P. K. Banerjee, J. discharged the Civil Rule No. 7477(W) of 1969, but his Lordship stayed the operation of the order for a period of six weeks and the ad interim order of injunction previously made was also continued. Extensions of the said order were subsequently granted till July 9, 1970.
12. On May 13, 1970 Hindustan Motors Ltd., wrote to the Collector of Customs and Central Excise for release of the seized consignment of primary nickel on execution of bond.
13. In July, 1970 an appeal was preferred against the order of P. K. Banerjee, J. dated 8-5-1970 in Civil Rule No. 7477(W) of 1969. The appeal was marked as FMA 280 of 1970.
14. On July 9, 1970 the Deputy Director, Enforcement Directorate, wrote to the Assistant Collector of Customs informing him of the dismissal of the Writ petition in Civil Rule No. 7477(W) of 1969 and of the appeal pending in this court, as well as of the interim order of injunction that was passed. The Deputy Director suggested that the seized goods should not be released on bond and advised the Customs Authorities to apply for being added as a party to the proceedings against the Enforcement Directorate.
15. The Collector of Customs and Central Excise made an application on September 10, 1970 in FMA 280 of 1970 for being added as a party and for directions on the Enforcement Authorities to deliver and return the documents to them.
16. On October 28, 1970 the Assistant Collector of Customs and Central Excise issued a show cause notice requiring Hindustan Motors Ltd., to show cause why the seized goods (9 drums of primary nickel) should not be confiscated under Section 111(d) of the Customs Act, 1962 and why penalty should not be imposed under Section 112 of the Act. The notice was issued under the provisions of Section 124(a) of the Act. This notice has also been challenged in the application before Sabyasachi Mukharji, J.
17. On December 28, 1970 Hindustan Motors Ltd. gave its reply to the show cause notice denying the allegations made.
18. On March 24 and 25, 1971 theappellate court delivered judgment in FMA280 of 1970. The appeal was allowed in part.The judgment and order of the trial courtwas set aside. The Rule was made absoluteexcept in so far as it related to the noticeunder Section 19-E of the Foreign ExchangeRegulation Act, 1947.
19. On May 7, 1971 Hindustan Motors Ltd., and Jhunjhunwala filed the application under Article 226 of the Constitution, challenging, inter alia, the seizure dated November 7, 1969, the extension order dated May 4, 1970 and the show cause notice dated November 28, 1970 mentioned above. A rule nisi was issued on that application and certain interim orders were passed. This was the application which was finally heard by Sabyasachi Mukharji, J.
20. After the disposal of FMA 280 of 1970 the application of the Customs Authorities in that appeal for being added as a party and for directions on the Enforcement Directorate to make over the seized documents was heard on May 20, 1971. Since the appeal had already been disposed of, liberty was only given to the Customs Authorities to intervene, if so advised, in the appeal before the Supreme Court.
21. We have already said that the application of Hindustan Motors Ltd. and Jhunjhunwala under Article 226 of the Constitution against the Customs Authorities was heard by Sabyasachi Mukharji, J. and judgment was delivered on July 13, 1972. By this judgment Sabyasachi Mukharji, J. has, (1) upheld the order of seizure dated November 7, 1969; (2) set aside the order dated May 4, 1970 and directed the respondents to return the goods seized and to withdraw the prohibitory order; and (3) upheld the show cause notice dated October 21, 1970 as being not without jurisdiction. The respondents, i. e., the Customs Authorities were given liberty to proceed with the show cause notice and the petitioners it was stated, would be entitled to take any valid defence in respect of the same. It was stated further that the respondents would decide the show cause notice in accordance with law. Writs in the nature of Mandamus and Certiorari were issued accordingly. The Rule was made absolute in part to the extent indicated above.
22. Appeal No. 47 of 1973 by the Collector of Customs and Central Excise, West Bengal and others is directed against the order of Sabyasachi Mukharji, J. setting aside the order of the Collector of Customs and Central Excise dated May 4, 1970 extending the time for issue of the show cause notice by a period of six months.
23. Appeal No. 72 of 1973 by Hindustan Motors Ltd., and Jhunjhunwala is direct ed against the order of Sabyasachi Mukharji, J. upholding the order of seizure dated November 7, 1969 and the show cause notice dated October 28, 1970.
24. We will first deal with the order setting aside the order of extension dated May 4, 1970. Section 110 of the Customs Act, 1962 is in the following terms:--
'110. Seizure of goods, documents and things-
(1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods:
Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer;
(2) where any goods are seized under Subsection (i) and no notice in respect thereof is given under Clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized; Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Collector of Customs for a period not exceeding six months.
* * * *'
25. Section 124 of the Customs Act, 1962 is as follows :--
'124. Issue of show cause notice before confiscation of goods etc.-
No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person--(a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty;
* * * *'
We have seen that on May 4, 1970 the Collector of Customs and Central Excise made an ex parte order under Section 110(2) of the Customs Act, 1962 extending the time for issue of the show cause notice by a period of six months from May 6, 1970. This order was set aside by Sabyasachi Mukharji, J. The principal ground for setting aside the order is that it was passed ex parte. The learned trial Judge has relied principally on the Supreme Court's decision in Asst. Collector of Customs v. Charandas Malhotra, : 1973ECR1(SC) . In this judgment the Supreme Court considered the scope of Section 110(2) and of Section 124(a) of the Customs Act, 1962. The Supreme Court has said that the power under the proviso to Sub-section (2) of Section 110 is quasi-judicial or at any rate one requiring a judicial approach. Consequently, says the Supreme Court, an opportunity of being heard ought to have been given to the respondent before orders for extension were made.
26. If we apply this decision of the Supreme Court to the facts of this case there can be no doubt that the ex parte order of May 4, 1970 was invalid; but learned counsel for the Customs Authorities relied on a Division Bench judgment of this court in Appeal No. 122 of 1969 (Cal) to which I was a party. The Division Bench held that under certain circumstances an ex parte order could be made but in view of the Supreme Court's judgment referred to above it is not necessary to go into this question.
27. The next argument of Mr. G. P. Kar, learned counsel for the Customs Authorities is that Hindustan Motors Ltd. and the other petitioner have waived their right to contend that the notice under Section 110(2) was not served. In support of this contention Mr. Kar says that during the pendency of the present appeal his clients made an application for stay of the order of Sabyasachi Mukharji, J. setting aside the ex parte order of May 4, 1970. An order for stay was passed ex parte on February 19, 1973. On April 4, 1973 the respondents (in Appeal No. 47 of 1972) appeared before the court and obtained an order for release of the goods in their favour upon their furnishing bank guarantee for Rs. 2,20,000/- and upon a further undertaking that the guarantee would be renewed as and when necessary till the disposal of the appeal.
28. In support of this contention Mr. Kar, has relied on two decisions of the Supreme Court, viz., Lokenath Tolaram v. B. N. Rangwani, : 1975CriLJ540 and The Director of Inspection of Income-tax (Investigation), New Delhi v. Pooran Mall and Sons, : 96ITR390(SC) .
29. In the first case the appellants filed a writ petition in the Bombay High Court as certain textile goods had been seized from their possession. They challenged the legality of the order of the Excise Authority granting extension of time to serve notice under Section 124(a) of the Customs Act, 1962, after expiry of the period of six months from the date of seizure. They also prayed for return of the seized goods. During the pendency of the petition the appellants, in pursuance of consent orders, deposited certain securities with the Excise Authorities and executed bonds in their favour and obtained release of the said goods. The appellants also agreed that in the event of their failure in the writ petition the securities deposited shall be treated as sale proceeds of the said goods and treated as goods so seized for the purpose of any adjudication proceedings. The appellants further agreed that they shall not raise any contention in the adjudication proceedings that the said proceedings will not be valid on the ground that the goods had been released to the appellants or were not available for confiscation or imposition of fine in lieu of confiscation. The Supreme Court has held :
(i) that after the appellants had obtained release of the goods in accordance with the terms of the said agreement embodied in the consent terms, the goods went out of the province of application of Section 110 of the Actfor extension of time for serving a notice.
(ii) that the consent terms operated as a waiver of notice for extending time within six months of seizure of goods; and,
(iii) the appellants had no locus standi to ask for release of the goods because the bank was in possession of the goods as the pledges and the Excise Authorities seized the goods from the possession of the Bank. 39. The third point decided by the Supreme Court is not relevant for our purposes. But Mr. G. P. Kar strongly relies on the first two points mentioned above and urges that on the facts of the present appeal also there has been a waiver by reason of the order that the respondents herein obtained for the release of the goods.
31. The second case of the Supreme Court referred to above does not appear to us to be relevant at all. We shall refer to this case in another connection in this judgment.
32. We do not agree with Mr. Kar that the principles which the Supreme Court enunciated in Lokenath Tolaram's case : 1975CriLJ540 can be applied to the facts of this case. Here Mr. Justice Sabyasachi Mukharji passed an order setting aside the order of extension granted on the 4th May, 1970, and directing the release of the goods. The Customs Authorities felt aggrieved by this order. They came up on appeal. In the appeal they asked for an order that the operation of the Trial Court's order be stayed. The respondents resisted this application for stay and insisted on the release of the goods. The Appeal Court put the respondents on terms. The effect of the Appeal Court's order is that the respondents can take advantage of the Trial Court's order for release of the goods provided that they furnish a bank guarantee for Rs. 2,20,000/- and provided further that they undertook to renew the guarantee as and when required till the disposal of the appeal. The respondents submitted to this order. This was not an order by consent in the strict sense. Such an order cannot, in our opinion, amount to waiver of any right of the respondents.
33. The second contention of counsel for the Customs authorities has been that a distinction should be made between a seizure of goods under Section 110(1) of the Customs Act, 1962 and a prohibitory order under the said sub-section as envisaged by the proviso thereto. It is submitted that under proviso to Sub-section (2) an order for extension of time is necessary provided that the goods have been seized. In the instant case the goods had not been seized but merely a prohibitory order in terms of the proviso to Section 110(1) was passed. In these premises there was no necessity for an order for extension of time.
34. This argument, prima facie, appears to be attractive. But it would not benecessary for us to express our opinion, one way or the other. We have looked into the order of seizure dated the 7th November, 1969, at pages 23 and 24 of the Paper Book. It is true that in this order the Inspector of Customs says: 'That it is not practicable to seize such goods' and that 'in the exercise of powers vested in me under Section 110(1) of the Customs Act, I do hereby order that you the owner of the said goods shall not remove, part with or otherwise deal with the said goods except with my prior permission.' But when we turn to the next page, i. e. page 24, we find a different picture altogether. There are two witnesses to this document, viz., one Pannalal Banik and one Gorennath Kapore. Before these two witnesses, 5 original drums and 4 drums repacked in local drums were sealed with the seal of the Assistant Collector of Customs, West Bengal, Calcutta. This overt act of sealing the packed drums amounts to exercise of dominion over the goods. In other words, it is an act of seizure of the goods within the meaning of Section 110(1) of the Customs Act 1962. Moreover, in all the affidavits on behalf of Customs Authorities which have been shown to us it appears that their case is that the goods were actually seized. It is not, therefore', a prohibitory order in terms of the proviso to Section 110(1). There is no dispute that when goods have been seized a notice to show cause under Section 124(a) is to be served within six months provided that the period may be extended on sufficient cause being shown.
35. The last argument of Mr. G. P. Kar is that by reason of the order of injunction against the Enforcement Directorate which we have discussed above the time for issuing the Show Cause Notice did not run at all.
36. Mr. Kar relies on the Supreme Court judgment in Director of Inspection of Income-tax (Investigation), New Delhi v. Pooran Mall & Sons, : 96ITR390(SC) . In that case the Supreme Court has said that ft is a well-established principle of judicial procedure that where any proceedings are stayed for a period by an order of Court or by injunction issued by any Court that period should be excluded in computing any period of limitation laid down by law. There can be no question that when an order of injunction is passed against one of the parties to the litigation, the aforesaid principle would apply. But in the instant case no order of injunction was ever passed against the Customs Authorities at any stage of the proceedings. The order of injunction was against the Enforcement Directorate which conducted the searches under Section 19-D of the Foreign Exchange Regulation Act and seized certain documents in course of the search. The Customs Authorities were not parties to the application under Article 226, marked CR No. 7477(W) of 1969. There was no bar at any stage to the Customs authorities taking anysteps or proceedings under the Customs Act, 1962. In fact the Customs Authorities applied to be added as party to the appeal being Appeal No. FMA 280 of 1970 but that application also was not ultimately allowed. On these facts in our opinion, it is not open to the Customs Authorities to contend that the order of injunction passed against the Enforcement Directorate saved the period of limitation prescribed by Section 110(2) of the Customs Act, 1962. We are unable to uphold this contention of learned counsel for the appellants.
37. In the result, Appeal No. 47 of 1973 is dismissed.
38. There will be no order as to costs.
39. We now proceed to deal with Appeal No. 72 of 1973 (Hindusthan Motors Ltd. v. Collector of Customs and Central Excise, West Bengal).
40. In this appeal the appellants have challenged the order of seizure dated the 7th November, 1969 and the notice to show cause dated the 28th October, 1970. The seizure was made under the provisions of Section 110(1) of the Customs Act, 1962, which provides that if the proper officer 'has reason to believe' that any goods are liable to confiscation under the said Act, he may seize the goods.
41. Counsel for the appellants has urged that the condition precedent for the exercise of power under Section 110(1) is 'reason to believe.' There must be objective reasons for forming this belief. According to counsel the condition precedent in the instant case is absent. Our attention has been drawn to paragraphs 2, 3 and 4 of the affidavit of Rampriti Lahiri, Inspector of Customs and Central Excise, West Bengal, affirmed on the 15th September, 1971, at pages 106-107 of the paper book. We set out below the paragraphs relied on :
'2. That on 7th November, 1969, acting on an information that a consignment of contraband primary nickel ostensibly from Bulgaria was lying in the premises of the factory of M/s. Hindustan Motors Ltd. I went to the factory of the aforesaid company at Uttarpara in Hooghly District and detected a consignment of 9 drums of primary nickel all of foreign or U. S. A. origin and weighing about 6210 Kgs. valued at Rs. 2,16,428 (approximately).
3. That when I asked the factory authorities to produce the documents as to the actual source of supply of the goods and lawful importation of the consignment of primary nickel they could not produce any. Thus the fact of this prior information and my detection of the goods admittedly of foreign or U. S. A. origin, the illicit importation of which could not be established by the Factory Authorities, were sufficient reasons for me to believe that the goods were illegally imported and were liableto confiscation under the Customs Act, 1962.
4. That upon forming this belief I seized the said goods on that date namely the 7th November, 1969 under Section 110 of tie Customs Act, 1962 and served an order on M/s. Hindustan Motors Ltd. not to remove, part with or otherwise deal with the said goods except with my permission.'
42. The order of seizure is at page 21 of the paper book which also says that the officer concerned had reason to believe that the goods specified in the schedule were liable to confiscation.
43. It has been argued before us that the above affidavit of Rampriti Lahiri does not disclose any materials on which a reasonable man could come to the finding that the goods were liable to confiscation. Rampriti Lahiri has not said whether be made any investigation as to the origin of the goods. The contention is that he had initial lack of jurisdiction in effecting the seizure under Section 110(1) of the Customs Act, 1962. In the application under Article 226 tried by Mr. Justice Sabyasachi Mukharji, a challenge was thrown to this act of seizure on the ground that he had no reason to believe that the goods were liable to confiscation but in his affidavit he has not been able to produce materials to sustain this belief,
44. We are unable to agree with these contentions. In his affidavit Rampriti Lahiri, in our opinion, has disclosed sufficient reasons for formation of his belief. He received an information that a consignment of contraband primary nickel ostensibly from bulgaria was lying in the Premises of Hindustan Motors Ltd. He went to the premises, detected a consignment of foreign or USA origin valued at Rs. 2,16,428 approximately. He called upon the factory authorities to produce documents to show the country of origin of the goods. The factory authorities could not produce any documents. He, therefore, had reasons to believe that these goods were illegally imported and seized the goods under the provisions of Section 110(1). It seems to us that on the facts stated by him it cannot be urged that he had no objective reasons to believe to satisfy the condition precedent in Section 110(1) of the Customs Act, 1962. We overrule the appellant's contention that the seizure was bad or illegal.
45. The next attack was on the show-cause notice. It is stated on behalf of the appellants that if the original seizure was bad and the extension order was also bad, the show cause notice would be bad. We have held that the extension order should be set aside but we do not think that the seizure was bad. Mr. Justice Sabyasachi Mukharji has held that in spite of the order of extension being set aside it would be open to the Customs Authorities to issue a show-cause notice. The learned Judge has relied on ajudgment of this Court in Appeal No. 122 of 1969 as well as on the case reported in : AIR1975Mad43 . Since the point is covered by a Division Bench judgment of this Court, it has not been taken before us. But the appellant's counsel made it clear that he was not making any concessions. We accept the view of Mr. Justice Sabyasachi Mukharji that if the seizure was good, a notice to show-cause could be given.
46. The next argument is that a distinction should be maintained between goods imported in breach of the conditions of a licence and those imported without any license. If goods are imported in breach of the conditions of licence, the Customs Authorities have no jurisdiction to adjudicate on the same, Tide, : 1983(13)ELT1538(SC) , (Addl. Collector of Customs Cal. v. Best & Co.) affirming a judgment of a Division Bench of this Court reported in : AIR1965Cal478 . If, however, the goods have been imported without any licence, the relevant provisions of the Customs Act would be attracted. They would be attracted by reason of the provisions of the Imports and Exports (Control) Act 1947, The Imports (Control) Order, 1955 read with the Customs Act of 1962.
47. Section 3(1)(a) of the Imports and Exports (Control) Act 1947 provides as follows :--
'3. Powers to prohibit or restrict imports and exports.-
(1) The Central Government may by order published in the Official Gazette, make provisions for prohibiting, restricting or other-wise controlling in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order;
(a) the import, export, carriage coastwise or shipment as ships' stores of goods ofany specified description;
48. Then Sub-section (2) of Section 3 prescribes that all goods to which any order under Sub-section (1) applies shall be deemed to be goods of which the import or export has been prohibited under Section 11 of the Customs Act, 1962 and all the provisions of that Act shall have effect accordingly.
49. Section 11 of the Customs Act is in the following terms :--
'11. Power to prohibit importation or exportation of goods :--
1. If the Central Government is satisfied that it is necessary so to do for any of the purposes specified in Sub-section (2), it may, by notification in the Official Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specific description.'
50. It appears clear, therefore, that if any goods are imported in violation of the provisions of Section 3 of the Imports andExports (Control) Act 1947, they would be deemed to be imported in violation of Section 11 of the Customs Act, 1962 and all the provisions of the Customs Act would be applicable. There is no dispute in the instant case that a restriction on the import of primary nickel was imposed under clause 3 of the Imports (Control) Order 1955 which was passed in exercise of powers conferred by the relevant provisions of the Imports and Exports (Control) Act 1947.
51. Before us counsel for the respondents did not dispute the propositions that if importation be made without any licence the Customs Act would be attracted. But he says that, if an importation be made in breach of the condition of licence the Customs Act would not be attracted.
52. On behalf of the appellants it is argued before us that a plain reading of the show-cause notice would show that the complaint of the Customs authorities was not that primary nickel was imported without licence but that it was imported in breach of the conditions of licence. The show-cause notice is at page 55 of the paper book. We intend to set out the relevant portions of this notice. These are as follows :--
'It appears that the goods mentioned in the schedule below have been imported into India ..... without a valid import licence,as required under Notification No. 17/55 dated 7-12-1955, issued under Section 3 (1) of the Imports and Exports (Control) Act, 1947, for the following reasons :
(i) That an information was received from a reliable source to the effect that some of the conditions of the Import Licence No. P/RM/2161212 dated 15-12-1967 under which a consignment of 21 drums of primary nickel imported had not been complied with by M/s. Hindustan Motors Ltd. Uttarpara, Hooghly .....
(ii) It appears that the Import Licence No. P/RM/2161212 dated 15-12-67 was not valid to cover the importation of 21 drums of primary nickel valued at Rs. 5 lakhs which were from U. S. A. and the seized goods, therefore, appeared to be liable to confiscation under Section 111(d) of the Customs Act, 1962 and would also appear liable for personal penalty under Section 112 of the Customs Act 1962.'
53. Learned Counsel for the appellants has submitted to us that it is clear from the terms of the show-cause notice that the Customs authorities were complaining of a breach of the conditions of licence No. P/RM/ 2161212 dated 15-12-1967 and in view of the Supreme Court's decision, reported in : 1983(13)ELT1538(SC) , no provision of the Customs Act could be applied to this case. We do not agree with counsel for the appellants. We have already referred to certain terms of thelicence. The licence related to consignments from USSR, Poland, GDR, Czechoslovakia, Yugoslovia, Rumania, Hungary and Bulgaria only. The licence also stated that the countries of origin of the goods consigned must also be the same. From the notice to show-cause it appears that the allegation of the Customs authorities is that the goods that were imported were of USA origin and as such imported without a valid import licence. We do not express any opinion as to the correctness of this allegation. But there can be no doubt that on the basis of alleged importation without licence the Customs authorities were within their rights to issue the notice to show cause.
54. The last contention of learned counsel for the appellants is based on Section 47 of the Customs Act, 1962. This section is in these terms :--
'47. Clearance of goods for home consumption :
Where the proper Officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption.'
55. Our attention was also invited to Section 130 which confers on the Central Board of Revenue constituted under the Central Board of Revenue Act 1924 powers of Revision. This section says inter alia, that the Board may of its own motion or on the application of any aggrieved person call for and examine the record of any proceeding in which an officer of Customs has passed any decision or order under this Act not being an order passed in Appeal under Section 128 for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may pass such orders thereon as it thinks fit. In other words, an order passed under Section 47 can be revised by the Central Board of Revenue under Section 130 of the Act.
56. In the instant case Clause iv (paragraph 1) of the show-cause notice says :--
'That on importation at the Port of Calcutta the subject consignment was warehoused by them in their Bond at Uttarpara Factory under W. R. Bill of Entry No. 1, dated 1-4-1969 and that the goods were ultimately cleared for home consumption in four instalments as under :.....'
57. In paragraph 11 of the petition, at page 6 of the paper book it is stated inter alia that : 'The Customs authorities after satisfying themselves that everything was in order allowed the said goods which were 21 drums in all to be cleared for home consumption in 4 instalments on payment of customs duty.'
58. In paragraph 14 of the affidavit of Kamakshya Ranjan Ghose, Assistant Collector of Customs, West Bengal, affirmed on the 15thSeptember, 1971, it is stated that the goods were allowed to be cleared through mistake and ignorance of facts which were subsequently discovered after clearance.
59. Counsel for the appellants has strongly urged that the goods were allowed to be cleared for home consumption after the proper officer was satisfied that those were not prohibited goods. If the order permitting clearance under Section 47 had been revised under Section 130 the matter might have been different, But so long as that order stood unrevised there was no scope for issuing a notice to show cause under Section 124 (a). It is urged further that it is no longer open to the Central Board of Revenue to revise that order under Section 47 because the period of limitation of two years from the date of the order under Sub-section (2) of Section 130 has already expired.
60. This is an argument which was never made before the trial court and Sabyasathi Mukharji, J. had no opportunity of considering it. The point has not been taken in the grounds in paragraph 10 of the petition. Our attention was drawn to Clauses (1) and (y) of these grounds. Clause (1) says :
'The goods were imported under a valid licence and were allowed to be cleared by the Customs Authorities. Consequently, there was no infringement of any order issued under Section 3 (1) of the Imports and Exports (Control) Act, 1947 during the course of the import of the said goods.'
Clause (y) says :
'For that no penalty could be imposed under Section 112 of the said Act if the goods could not be confiscated under Section 111 of the said Act.'
These grounds do not indicate the appellants' contention that in view of the order passed under Section 47 of the Customs Act, 1962, the notice to show cause under Section 124(1) could not be given.
61. This point has not also been taken in the grounds of appeal. We were referred to Clauses (f) and (j) of these grounds. Clause (f) is as follows :
'For that the learned Judge failed to appreciate that the appellant No. 1 had the import licence for importing the goods and that the said goods were duly cleared by the Customs Authorities after the importation against the said licence and after receiving the full duty in respect thereof and that it could not be said that the said imports were made without any licence. The learned Judge further failed to appreciate that what was in effect alleged in the said notice to show cause was that the condition of the said import licence as to the country of import had been violated.'
Clause (j) runs thus :
'For that the learned Judge should have held that no proceedings for imposition of any penalty under Section 112 of the Customs Act, 1962 could be taken in respect of the saidgoods as no order of confiscation could be passed in respect of the same.'
We do not think that any of these grounds can be relied on in support of the contention that by virtue of an order under Section 47 the notice to show cause is bad.
62. Since this point is being taken for the first time in appeal without mentioning the same either in the grounds in the petition or in the grounds of appeal we are of opinion that the appellants should not be allowed to take it at this stage.
63. But assuming that the argument can be entertained, we are unable to sustain it.
64. Section 89 of the Sea Customs Act, 1878 provided as follows :
'89. Clearance for home consumption.--When the owner of any goods entered for home consumption, and (if such goods be liable to duty) assessed under Section 87, has paid the import duty (if any) assessed on such goods and any charges payable under this Act in respect of the same the Customs Officer may make an order clearing the same; and such order shall be sufficient authority for the removal of such goods by the owner.'
This section came up for consideration in the case of Lakshminarayan Ramniwas v. Collector of Customs, reported in : AIR1961Cal616 before D. N. Sinha, J. as His Lordship then was. The learned Judge held that it was not the scheme of the Sea Customs Act that a personal penalty could not be imposed under Section 167 (8) after the goods had left the customs barrier, even though an order had been obtained under Section 89. The learned Judge appears to be of the view that whether the importer has committed an offence under Section 167 (8) has nothing to do with the passing of the goods beyond the customs barrier. If the offence has been committed while the goods are within the customs barrier, it cannot cease to be an offence, just because the goods have been removed beyond the customs barrier. If an offence has been committed under Section 167 (8) there is no estoppel on the part of the Sea Customs authorities from taking action under it, even though the goods might have passed the customs barrier after an order has been made under Section 89 of the Sea Customs Act.
65. We have noted the difference in language between Section 89 of the Sea Customs Act, 1878 and Section 47 of the Customs Act, 1962 but the purport of both the sections is clearance of goods for home consumption. Sinha, J. however has relied on a Privy Council judgment which in our opinion provides the complete answer to the argument based on Section 47 advanced before us on behalf of the appellants herein. This is the case of Maritime Electric Co. Ltd. v. General Dairies Ltd., 1937 AC 610 = AIR 1937 PC 114. The New Brunswick Public Utilities Act prohibited any public utility company from making any greater or less charge for its services than that prescribed for the time beingunder the Act. By the negligence of its servants, an electricity company rendered and was paid an account based upon erroneous meter reading, so that the consumers were charged for only one-tenths of the electricity actually used. In an action to recover the balance of nine-tenths the Privy Council rejected a plea of estoppel. Lord Maugham delivering the judgment of the Privy Council has observed :
'* * * where, as here, the statute imposes a duty of a positive kind, not avoidable by the performance of any formality, for the doing of the very act which the plaintiff seeks to do, it is not open to the defendant to set up an estoppel to prevent it. This conclusion must follow from the circumstance that an estoppel is only a rule of evidence which, under certain special circumstances, can be invoked by a party to an action; it cannot, therefore, avail, in such a case, to release the plaintiff from an obligation to obey such a statute, nor can it enable the defendant to escape from a statutory obligation of such a kind on his part. It is immaterial whether the obligation is onerous or otherwise to the party suing. The duty of each party is to obey the law.'
66. In the present case the Customs Authorities have stated that the appellants were permitted to clear the goods by mistake. It was the duty of the appellants to obey the law. If the allegations of the Customs Authorities be correct they had no right to import goods without a valid licence. They should not be heard to say that because of the order under Section 47 steps cannot be taken against them under the other provisions of the Customs Act. This contention of counsel for the appellants is, therefore, overruled.
67. In the result, this appeal is dismissed. There will be no order as to costs. The respondents would be at liberty to proceed with the show cause notice and the appellants would be entitled to take any valid defence in respect of the same. The respondents would decide the show cause notice in accordance with law.
S.K. Datta, J.
68. I agree.