RAM KISHAN AGARWALA Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) CHALLENGE in this application under Article 226 of the Constitution is to the order dated 6 -4 -1971 (Annexuie -12) passed by the Collector of Customs and Central Excise (opposite party No. 1) in purported exercise of powers vested under Section 125 of the Customs Act, 1962 (hereafter referred to as the 'Act'), confiscating an ambassador car bearing registration No. ORR 1763 and authorising redemption thereof by one Bipin Prasad Agarwala on payment of a fine of Rs. 25,000 and also directing confiscation of 370.850 Kilogrammes of silver and authorising redemption of the same by the said Sri Bipin Prasad Agarwala on payment of a fine of Rs. 2 lakhs.

(2.) PETITIONER alleges that he carries on money -lending business in his individual capacity from June, 1974 and he also started dealing in silver from September, 1976. He is an assessee under the Income -tax Act in respect of his business. In regard to his silver business, petitioner used to make local purchases of silver as also of old ornaments from the Tarava Market within Bolangir district. Petitioner's natural father Bipin Prasad Agarwala is a partner of a firm running under the name and style of Messrs Nagarmal Chhotelal (opposite party No. 4). The said firm also deals in silver. Petitioner maintains that in September, 1976, he sent 17 small silver bars, 98 silver coins, 4 silver sticks, 2 silver plates, 9 silver ingots weighing in all 370.850 Kilogrammes in an Ambassador Car driven by one Gobardhan Meher with a view to melting the same at Bargarh. Petitioner wanted the melted silver to be sent to Messrs Jalan and Company at Calcutta who are Commission Agents in Silver. On the basis of secret intelligence claimed to be available with the Preventive Officers of the Central Excise Department, the vehicle was intercepted on the way at about 5 a.m. and the silver was seized. A written statement was taken from Sarbeswar Dwari, the person accompanying the driver. Dwari happened to be an employee of Messrs Nagarmal Chhotelal (opposite party no. 4). A seizure list (Annexure -1) was drawn up. The Preventive Officers came to Tarava, raided the residential hcuse of Bipin Prasad Agarwala (opposite party no. 5) and recovered and seized silver ingots weighing about 123 Kilogrammes. By noon time that day, the Assistant Collector of Central Excise together with Preventive Officers interrogated the petitioner and recorded his statement where petitioner claimed that the silver seized from the car belonged to him. In the afternoon that day. samples were drawn from the seized silver for assaying. A statement was taken from the driver of the vehicle. Further statements were also taken from Dwari, but all these statements had been collected behind the back of the petitioner. On 18 -10 -1976, petitioner applied for return of the seized silver and made a second petition to the same effect on 13 -12 -1976. On 7th of March, 1977, the Assistant Collector recorded a further statement of Bipin Prasad Agarwala behind the back of the petitioner and on the same day samples were drawn for the purpose of assaying from the seized silver from the residence of Bipin Prasad Agarwala. On 2 -8 -1977, the Collector of Central Excise issued show -cause notices to opposite parties 3 to 8 and the petitioner. In the notice petitioner was described as the son of Bipin Prasad Agarwala and it was stated therein that the specified goods were being transported in a suspicious manner to Bombay without cover of appropriate transport voucher and thus provisions of Section 11K of the Customs Act read with Rule 3(1) of Specified Goods (Prevention of Illegal Export) Rules 1969, had been violated. The noticees were, therefore, called upon to show ca.use why the goods should not be confiscated under Section 113(b) of the Act and the car being the means of transport of the specified goods should not be con -ficated under Section 115(2) of the Act. They were also called upon to show cause why they may not be penalised under Section 114(i) of the Act. Petitioner claimed that the seized silver belonged to him. The other noticees took the same stand. Affidavits were filled in support of the claim. Summons had been issued to the petitioner under Section 63 of the Gold Control Act and Section 108 of the Customs Act describing the petitioner as owner of the seized silver. Petitioner alleges that there was no material to support the stand of the Department that Messrs Nagarmal Chhotelal or its partner Bipin Prasad Agarwala (opposite parties 4 and 5 respectively) were owners of the seized silver. Petitioner submitted that Section 11 -K of the Act had no application inasmuch as the place of seizure did not justify a conclusion that the silver was intended to be sent to Bombay within the specified area. According to the petitioner there is no prohibition on transport of silver bullion outside the specified area and no transport voucher is necessary to authorise such transport. Without consideration of these aspects and without furnishing adequate opportunity to the petitioner to substantiate his stand and notwithstanding abundant material on the record supporting the stand of the petitioner, the Collector by the impugned order came to hold that the stock did not belong to the petitioner and directed confiscation of the stock of silver as also the ambassador car. That order of confiscation is assailed on the following grounds : -

(3.) THERE is no dispute that silver is a specified goods under the provisions of the Act. Petitioner has, however, from the very commencement of the proceeding taken the stand that there was no material to support the assumption that the specified goods was being taken from or into a specified area and, therefore, there was no necessity for a transport voucher. There is no dispute that the place from where the seizure was made is not a specified area while Bombay is. Mr. Mohanty for the petitioner relies upon the finding of the Collector in the impugned order where it has been stated : -