RAJMAL LAKHICHAND Vs. COMMR CEN EXC AND CUSTOMS

JUDGEMENT

(1.) Leave granted.

(2.) This appeal is directed against the judgment and order dated 20.04.2010 passed by the Bombay High Court in Custom Reference No. 1 of 2002 whereby the High Court answered the question referred to it by the Customs, Excise and Gold (Control) Appellate Tribunal (for short "the Tribunal") in favour of the Appellant and against the Revenue holding that the Tribunal was not justified in invoking the provision of Section 120(2) of the Customs Act, 1962 to confiscate the seized silver to the extent it was confiscated in exercise of that power in absence of any show cause notice and also in absence of opportunity of being heard. By the aforesaid judgment and order, however, the High Court refused to expand the scope of reference to the confiscated seized silver to the extent of 1713.807 kgs. and restricted it to the silver of 194.250 kgs. only.

(3.) The Directorate of Revenue Intelligence (for short "the DRI") searched the premises of the Appellants on the basis of information gathered by it to the effect that large quantity of about 132 bricks of silver had been smuggled through sea route and diverted to Jalgaon. During the aforesaid search the DRI seized silver in Choursa form weighing 1913.256 kgs. Pursuant to the same, a show-cause notice was issued to the Appellants dated 07.08.1993 to which they submitted their replies. The adjudicating authority took up the matter for consideration and by its order dated 30.08.1994 discharged the show-cause notices holding that the evidence collected were not convincing enough to hold the allegations as proved. The Central Board of Excise and Customs, New Delhi exercising powers under Section 129D of the Customs Act directed the collector to apply to the Tribunal for determination of the issues specified in the review order, consequent upon which, the Tribunal was approached. The Tribunal by its order dated 19th March, 1996 allowed the appeals by setting aside the impugned order and ordered for confiscation of the seized silver absolutely. The Tribunal further held that Mr. Ishwarlal Lalwani and M/s. Rajmal Lakhichand, in whose custody the seized silver was found were liable for imposition of penalty under Section 112(b) of the Customs Act. Accordingly, a penalty of Rs. 10 lakhs was imposed as personal penalty on Mr. Ishwarlal Lalwani for acquiring the smuggled silver. The Tribunal, however, did not impose separate penalty on M/s. Rajmal Lakhichand since personal penalty on the person managing the affairs of the firm was imposed. The Tribunal also imposed penalty of Rs. 1 lakh on Mr. Sureshkumar Seth who had procured smuggled silver and delivered it to Mr. Ishwarlal Lalwani. M/s. Rajmal lakhichand and Mr. Ishwarlal Lalwani being aggrieved by the order dated 19th March, 1996 filed two reference applications in which they framed as many as 11 questions and prayed for reference to the High Court. The Tribunal by its order dated 26.09.1996 rejected the reference applications holding that none of the questions raised therein required consideration at the hands of the High Court.