T HAZARIMAL Vs. COLLECTOR OF CENTRAL EXCISE MADRAS

JUDGEMENT

(1.) ON 10th August, 1959, some officers of the Customs (Preventive) Department, searched three premises and seized certain goods having reason to believe that the goods had been illicitly imported into India from a foreign country without a valid import licence. ONe Tharachand, brother of the present petitioner, who was present at the time of the seizure, stated that the petitioner was the proprietor of a particular business, of which premises were also searched, and that the goods seized from the other premises belonged to a deceased brother of his by name Dhanraj. The petitioner gave a statement subsequently stating inter alia that three cases of press buttons had been purchased by him in the year 1957 at Madra s through a representative of a merchant of Pondicherry . Action was taken on the basis of these statements and show cause notices were issued to the petitioner, his brother, Tharachand, and the widow of the deceased brother, Dhanraj. ON enquiry, the Collector of Central Excise made an order confiscating all the goods except one camera and a radio set and also imposed a personal penalty of Rs. 5, 000 on the petitioner. The petitioner filed W. P. No. 1303 of 1961 and his brother's widow, Pattasi Bhai filed W. P. No. 1381 of 1961 questioning the orders of the Collector of Central Excise. These petitions came up for hearing before Srinivasan J. The learned Judge found that the order of imposition of penalty was unsustainable. To that extent, the Learned Judge quashed the order. So far as the order of confiscation is concerned, the learned Judge pointed out that the Collector of Central Excise had failed to examine the extent of prohibition or restriction with regard to the items which were ordered to be confiscated before he could reasonably draw the inference that the goods should have been brought into the country in violation of such restriction or prohibition. The learned Judge found that such a consideration of the matter was absent and that, therefore, the order of confiscation was unsustainable. In that view, the learned Judge quashed the order of confiscation and left the matter open to the Collector to examine it afresh if he thought fit and pass orders as may be called for. This order was passed on 27-4-1964.

(2.) ON 18-5-1965, the Collector of Central Excise issued fresh show cause notices, to the petitioner, his brother Tharachand and his brother's widow, Pattasi Bhai. This was followed by another show cause notice on 30-10-1965 to each of them. The petitioner and others submitted their explanations. The petitioner reiterated his contention as regards his purchase of nita press buttons. ON a consideration of the materials, the Collector held that the items of goods seized from the residence of Pattasi Bhai were liable to be released to her and he accordingly directed the release of those items in her favour. There remained only the nita press buttons. As regards this item, the case of the petitioner was that he had purchased it from a merchant of pondichery by name Messrs. Popular Trading Company, No. 8 Calve College Road, pondicherry, as per a receipt dated 29-7-1957. The Collector found, on verification, that there was no such road in Pondicherry and that there was also no such firm by that name. Having observed this, he concluded :- "i, therefore, consider that, so far as these press buttons are concerned contraband imported into India without an I. T. C. licence and without payment of duty in contravention of Section 19 of the Sea Customs act, 1878, read with section 3 (2) of Imports and Exports (Control) Act, 1947 as the evidence let in by the party is false. They are, therefore, liable to confiscation under section 167 (8) of the Sea Customs Act, 1878, read with section 3 (2) of the Imports and Exports (Control) Act 1947. As there is no sufficient evidence to implicate T. Hazarimal and T. Tarachand as the persons concerned in the offence, I refrain from imposing a penalty on them. " * with the result, the Collector of Central Excise directed confiscation absolutely of the Nita Press buttons. The appeal filed by the petitioner to the Central Board of Revenue and the revision filed to the central Government having been dismissed, he has come forward with this petition praying that the order of confiscation may be quashed.

(3.) THE contention of the petitioner that action taken under the 1878 Act is unsustainable and that action should have been taken under the 1962 Act, is not acceptable. Mr. Kothari, counsel for the petitioner, drew my attention to Sub-section (4) of section 160 of the 1962 Act which reads :- "this 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. " * After referring to this provision, the counsel drew my attention to Section 110 which provides for seizure of goods, documents and things. Sub-section (1) of that section says that if the proper officer has reason to believe that any goods are liable to confiscation, he may seize such goods. Sub-section (2) provides that where any goods are seized under sub-section (1) 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. Section 124 requires a show cause notice to be issued before an order of confiscation is passed so as to give a reasonable opportunity to the person concerned to make his representations and being heard. Mr. Kothari contended that inasmuch as the action taken under the 1878 Act had been quashed by this Court, it was incumbent upon the Collector to take action only under the 1962 Act which had by then come into force and that under section 110 read with section 160 (4) the collector should have issued notice within six months from the date of the judgment. I am unable to accept this argument. Sub-section (4) of section 160 applies only to goods which are subject to the control of the Customs and not to the goods seized by the Customs at the commencement of the Act. Goods are subject to the control of the customs if they are kept in the warehouse (Section 62 ). THEre are certain restrictions imposed by section 45 with regard to clearance of imported goods. In such cases, it may be said that the goods are subject to the control of the officials. But the goods which have already been seized cannot be said to be subject to the control of the Customs so as to attract sub-section (4) of section 160. Action was taken under the 1878 Act which was then in force. Though the order of confiscation was quashed by this Court, the collector issued a fresh show cause notice. This should be deemed only in continuation of the earlier show cause notice which was in no way affected by the decision of this court. All that was quashed was the decision of the collector confiscating the goods and imposing penalty. THE show cause notice issued on 18-5-1965 explicitly stated that it was being issued as per the decision of this court. THE other show cause notice dated 30-10-1965 was issued expressly stating that it was issued as part of the show cause notice dated 18-5-1965. THE repeal of the 1878 Act by the 1962 Act did not affect this action already taken, as there does not appear a different intention in the repealing act. THErefore, the action taken is thus saved by section 6 of the general Clauses Act. 8. In the result, the writ petition is allowed and the impugned order is quashed.