Customs, Excise and Gold Tribunal - Delhi
N. Devidas And Company vs Collector Of Customs on 25 February, 1987
Equivalent citations: 1987(13)ECR828(TRI.-DELHI), 1987(29)ELT247(TRI-DEL)
ORDER M. Gouri Shankara Murthy, Member (J)
1. The facts in this Revision Application to the Government of India, transferred and heard as if it were an appeal in the Tribunal, pursuant to S.131-B of the Customs Act, 1962 (hereinafter, the Act) are :-
(a) a consignment of 4-19 bags of Tanzanian Gum Arabic, valued at Rs. 2,91,607/- c.i.f. were imported by the Appellant and cleared on payment of duty in a sum of Rs. 2,18,705.25, on or about 16-8-1979;
(b) nevertheless, 395 bags out of the aforesaid lot were seized from the appellants' warehouse and in an adjudication by the Collector of Customs of a notice to show cause alleging under valuation, the goods were directed to be confiscated subject to redemption on payment of fine in a sum of Rs. 1,25,000/-. He also levied a penalty of Rs. 25,000/-. He further directed payment of the difference in duty in a sum of Rs. 1,69,500/-;
(c) on appeal to the Board, the aforesaid order was confirmed;
(d) the instant Revision now heard as an appeal was the sequel.
2. Before us, it was submitted that the Revision is confined only to the issues of the legality of the confiscation and the penalty imposed.
3. Once again, Shri Deshpande had, in the words of the learned Member of the Board, Shri S. Venkataraman, "tried to do a fine bit of vain hairsplitting". In his oral submissions supplemented in writing by his letter dated 25-6-1986, he was submitting inter alia, that :-
(a) goods cleared on payment of duty after satisfaction in terms of S.47 of the Act, cease to be "imported goods" defined in S.2(25) of the Act;
(b) on a, true construction of S.111, it would appear to apply only to "imported goods" and not those cleared for home consumption;
(c) on the language of S.111(m) ["any goods that do not correspond" and not "any goods that did not correspond"] read with the heading of Section 111 indicates that it applies only to those goods in the course of import and not those already cleared;
(d) in regard to such goods cleared after payment of duty, it is only a recovery of duty not levied that is provided under S.28 of the Act but not confiscation. There is no question of resort to Section 111 in such cases;
(e) that being so, there is no question of a levy of penalty as well under S.112 of the Act;
(f) confiscation being illegal without or in excess- of jurisdiction, the amount paid in lieu thereof as well as the penalty are to be refunded.
4. That Section 111 of the Act itself had made no use of the expression "imported goods", is conveniently ignored. It speaks, on the contrary, of "goods brought from a place outside India". It may be that the word "import" had been defined to mean the act of bringing goods into India from a place outside India [S.2(23) of the Act]. But that is not the only criterion laid down in the definition of the expression "imported goods". The definition goes further than mere "import". It does not include those cleared for home consumption. Once Section 1111 did not use the expression "imported goods", there is no warrant to read that expression into it merely because the words "brought from a place outside India - merely descriptive of the word "goods" - tally with the definition of "import" in S.2(23) of the Act. Nor does it mean and imply that we should read for "goods brought from a place outside India" the word "import". A definition" is meant to be the key for understanding the words used in a statute not for replacing the words actually used in a statute with the words defined, just because of the identity of the words sought to be replaced with the meaning given in the definitions.
5. If, therefore, the words "brought from a place outside India" are merely descriptive of the words "goods" they do not signify the act of bringing them in. They do not exclude even by implication goods cleared for home consumption. When once the words "imported goods" do not find a place in Section 111, it is unnecessary to specify therein further that the goods liable to confiscation .include those that have been cleared for home consumption. In other words, if it were the legislative intent to exclude goods cleared for home consumption from any liability to confiscation, all that was necessary was to substitute the words "goods brought from a place outside India" with the words "imported goods". Nothing would have been easier.
6. There is no warrant or scope for quibbling on the language of Sub-section (m) of S.1 11 of the Act. It is not as if goods that "do" not correspond in respect of the value with the entry made (in the Bill of Entry) prior to clearance, at once metamorphose into those whose value corresponds with the entry once they are cleared. Even after clearance and as long as they exist, their value does not correspond with the declaration in the Bill of Entry. It is the act of misdeclaration that is the offence. Once it is committed, it stays put. The consequence of mis-declaration is that the goods whose value had been misdeclared become liable for confiscation. It is unwarranted to construe from Sub-section (m) that it speaks of goods that "do" not correspond with the value and, consequently, it does not apply to goods cleared, as if clearance is a benediction that confers absolution upon the act of misdeclaration and, thereafter, there is no question but the goods "do" correspond with the entries made in the Bill of Entry.
7. Confiscation is an act of appropriation of private property for State or Sovereign use and usually been the result of the doing by the owner of some prohibited act. The seizure and appropriation of property as a punishment for breach of the law whether municipal or international was held to be confiscation in (1947) Ch. 629 [Frankfurther v. W.L. Exner]. A proceeding for confiscation is one in rem rather than one in personam - like e.g. penalty under S.1112 of the Act - one in relation to the goods rather than in relation to the person in any way concerned [AIR 1974 S.C. 859 - Collector of Customs v. Boormull]. Once their value had been misdeclared, they are impressed with the character of misdeclared goods and, consequently, offending goods, which could, even after clearance, be confiscated. Liability to confiscation, declared in S.111 of the Act, regardless of clearance. Hence the power to search premises (S.105) or conveyances (S. 106) or inspect places of storage of notified 'goods (S.106-A) and the power of seizure (S.110). If the goods cease to be liable for confiscation after clearance, these powers would be rendered nugatory.
8. This was the contention that was negatived in AIR 1970 Cal. 134 [Sheik Mohd. Sayeed v. Assistant Collector of Customs].
9. Section 28 of the Act, doubtless, empowers recovery of duties short-levied or erroneously refunded within the limitation provided. It does not speak of confiscation. Obviously because, it is not inconceivable that a short-levy or erroneous refund may occur even in cases where the goods are not liable in any way to confiscation. One cannot infer from this that once there is a short-levy, may be because of misdeclaration, there could be no confiscation. Liability to confiscation is without prejudice to recovery of duty short-levied.
10. In the premises it has to be held that confiscation was neither illegal nor in excess of jurisdiction. The Appeal has no merits and is, accordingly, dismissed.