COLLECTOR OF CUSTOMS AND CENTRAL EXCISE Vs. AMRUTHALAKSHMI

JUDGEMENT

(1.) THESE appeals arise out of four writ petitions, W. P. Nos. 944 of 1971, 1408 of 1971, 1409 of 1971 and 1411 of 1971. The relief asked for was for the issue of a writ of certiorari to quash the order of Collector of Customs dated 18 -8 -1970 and 12 -8 -1970, directing the confiscation of 450 watches and levying of penalties, and against the order of the Collector of Customs granting sanction of prosecution against the petitioners under Section 135 of the Customs Act.

(2.) THE main contention that was raised before the learned Judge and which found acceptance was that the notice as contemplated under Section 110 of the Customs Act was not in accordance with law and as such further proceedings taken by the Collector under Section 124 of the Customs Act was illegal and without jurisdiction. The short facts that are necessary may be stated. The watches were seized on 1 -6 -1969. The Collector gave a notice on 4 -11 -1969 extending the period of notice to 31 -5 -1970. He actually gave a show cause notice on 1 -5 -1970 that is more than six months after the seizure of the watches but before the expiry of one year. The contention that was raised was that the requirements under Section 110 of the Act had not been complied with, and therefore no further action could be taken by the authorities under Section 124 of the Act.

(3.) SECTION 124 occurs in Chapter XIV relating to confiscation and imposition of penalties. Now in dealing with the power of confiscation or imposing penalty, the section provides that no order of confiscating any goods or imposing any penalty on any person shall be made unless the conditions provided for under sub -sections (a), (b) and (c) are fulfilled. Sub -section (a) of Section 124 requires that a notice in writing informing the owner of the grounds on which it is proposed to confiscate the goods or to impose a penalty should be given and sub -section (b) requires that an opportunity of making a representation in writing should be given within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein and sub -section (3) requires that a reasonable opportunity of being heard in the matter should be given. Now Section 110 requires that the goods seized or directed to be kept in the custody of the owner have to be returned to the person from whose possession they were seized if no notice in respect thereof is given within 6 months of the seizure of the goods under clause (a) of Section 124. It follows, therefore, that if within the period of six months or one year as the case may be, no notice has been given under clause (a) of Section 124, the goods shall be returned to the person from whose possession they were taken. The power to retain the goods is no longer available after the period had expired. We find no connection between the exercise of power of confiscation of the goods and of imposing penalty, and the provision in Section 110 which requires the officer to hand over the goods to the owner after the period specified, if no notice under Section 124 (a) is given. Section 110 puts a limit to the power of seizure and retention of goods by the officer. When once action is taken under Section 124 before the expiry of the period as contemplated in Section 110, he may continue to retain the goods. But the failure to give notice under Section 110 does not in any way affect the power of the authorities to proceed with the proceedings for confiscating the goods or imposing any penalty. Mr. Delia the learned counsel for the respondent submitted that a valid notice, within the period specified under Section 110 is sine qua non for taking action under Section 124 of the Customs Act. We do not see any justification for the acceptance of such a contention. These two sections are entirely independent. Section 110 deals with the right of the officer to retain the seized goods for a specified period and his duty to return them to the possession of the owner from whom they were seized unless action under Section 124 had been taken. Section 124 prescribes the procedure under which the goods can be confiscated and penalty can be imposed. All that Section 124 requires is fulfilling the conditions specified in sub -clauses (a) (b) and (c). In this case the Collector extended the period upto 31 -5 -1970 and the show cause notice was actually given on 1 -5 -1970, before the expiry of the extended period. In this case we do not propose to go into the question as to whether the time for issue of a show cause notice was properly extended or not, for, it does not arise. The proceedings were taken for confiscation of the goods and for imposing a penalty. The petitioner in those proceedings did not contend that the notice under Section 110 was not in accordance with law or that as the notice under Section 110 was not in accordance with law, proceedings under Section 124 were not open to them. In those proceedings, it is already stated, that Collector directed the confiscation of the goods which were seized from the two ladies, and also imposed a penalty on the two owners. That order is the subject -matter of appeal to the Central Board of Excise and Customs.