Customs, Excise and Gold Tribunal - Delhi
Engee Industrial Services P. Ltd. vs Collector Of Customs on 17 May, 1996
Equivalent citations: 1996(87)ELT152(TRI-DEL)
ORDER
U.L. Bhat, J. (President)
1. This appeal is directed against the order passed by the Collector of Customs (Preventive), Bombay under the proviso to Sub-section (2) of Section 110 of the Customs Act, 1962 (for short, the Act) extending by six months the period for issue of the show cause notice under Section 124 of the Act in respect of goods seized by him.
2. The contention that the appeal is not maintainable has been rejected in the earlier order which has been recalled and the contention is not being pursued at this stage.
3. The goods were seized at Taloja in Raigad District of Maharashtra State. The learned Counsel for the appellant contended that Taloja is in Taluka Panval of District Raigad which, according to Shri T.R. Malik, SDR is the new name for the erstwhile Kolabe District. The seizure was effected by Collector of Customs (Preventive), Bombay under the belief that the goods in question which were imported by a ship at Mangalore Port for breaking up were partly removed clandestinely and partly removed on payment of duty misdeclaring the value. The goods were taken from Mangalore to Taloja village.
4. One of the submissions is that this Collector has no jurisdiction over Panval Taluka in Kolabe District and the jurisdictional Collector is the Collector, JNPT. There is no specific contention that the village in question falls within the limits of Panval Taluka. Even otherwise, looking at the notifications in question it would appear that while Collector, JNPT has jurisdiction over Panval Taluka of Kolabe on Raigad District, Collector (Preventive), Bombay has jurisdiction over the entire district. Therefore, it can be said that the seizure was within the territorial jurisdiction of Collector (Preventive), Bombay.
5. The more important contention raised by the appellant is that the goods had been cleared at Mangalore Port on payment of duty on the value assessed by the proper officer of that Port, that no part of the goods had been clandestinely removed from the ship and if the department has reasonable belief that there was misdeclaration of value and underassessment of duty, it is only the Collector of Customs, Bangalore (Mangalore Port is under the jurisdiction of this Collector) who has jurisdiction to initiate action either under Section 110(2) proviso or Section 124 of the Act. The action contemplated under the proviso of Section 110(2) of the Act is to extend the time for issuing the show cause notice under Section 124 of the Act.
6. Section 110 deals with seizure of goods, documents and things. A proper officer having reason to believe that the goods are liable to confiscation under Act may seize such goods. Sub-section (2) requires that where the goods are seized under Section (1) and no notice in respect is given under Section 124(a) (informing him of the grounds on which it is proposed to confiscate the goods or impose penalty) within six months from the seizure of goods, the goods shall be returned to the person from whose possession they were seized. According to the proviso, the period of six months may, on sufficient cause being shown, be extended by the Collector of Customs for a period of not exceeding six months. The Tribunal has taken the view that such extension can be granted only after issuing show cause notice and opportunity of making a representation, to the person concerned. In the present case the Collector (Preventive), Bombay within whose jurisdiction the goods were found, seized the goods. The legality or otherwise of the seizure is not a matter for consideration before us. The proper officer who effected the seizure or is in custody thereof has the duty of releasing the goods if notice under Section 124(a) of the Act is not issued within six months of the seizure of the goods. If the period for issuing notice under Section 124(a) is extended and the notice is issued within the extended period, question of releasing the goods under Section 110(2) of the Act will not arise. The Collector of Customs (Preventive), Bombay extended the period by the impugned order and followed it by issuing notice under Section 124(a) of the Act. Seizure was effected on two grounds, namely, clandestine removal of goods and misdeclaration of value leading to under assessment of duty on goods cleared at Mangalore Port.
7. In Ramnarain Bishwanath v. Collector of Customs, Calcutta - 1988 (34) E.L.T. 202 (Tribunal) after import at Paradwip Port, the goods were taken to Howrah by Rail and the Collector of Customs, Calcutta having reason to believe that clearance was obtained on the basis of a fake licence instructed the Railway authorities not to deliver the goods to the consignee and purported to seize the goods by such instruction. The Tribunal held that there was rta seizure at all and the instruction issued to the Railway authorities was only a detention order which could be issued only if it was not practicable to effect seizure physically. The Tribunal further held that an adjudicating authority can exercise power only within the territorial jurisdiction notified under Section 4 of the Customs Act, 1962 that a Collector can adjudicate in respect of goods and persons only if the cause of action arose within his territorial jurisdiction, that it is the basic act of import which initially gives rise to cause of action, that an order passed under Section 47 of the Act by a proper officer must be respected by other officers and the Collector of Customs, Calcutta cannot have reason to believe that the goods were liable to confiscation in the face of the order passed under Section 47 and his duty was to inform his counterpart at Paradwip and he could not initiate adjudication proceedings. Accordingly the order of adjudication passed by the Collector of Customs, Calcutta was set aside. In Singh Radio and Electronics v. Collector of Customs - 1988 (36) E.L.T. 713 (Tribunal), goods imported at Bombay and cleared under Section 47 of the Act were taken to New Delhi and seized by the New Delhi authority under Section 110(1) of the Act under the belief that there was misdeclaration of description and value Show cause notice and adjudication order followed. The Tribunal, following the decision in Ramnarain Bishwanath's case and Metro Exports v. Collector of Customs, Cochin - 1988 (14) ECR 169, set aside the adjudication order holding that the New Delhi authority had no jurisdiction to issue notice or pass-order under Section 110 of the Act. Section 110, it may be noticed, does not deal with passing an order. Sub-section (2) and proviso thereto refer to "notice" which is the notice required under Section 124 of the Act. We do not understand the decision as holding that the New Delhi authority has no jurisdction to effect seizure under Section 110(2) of the Act. Metro Exports' case dealt with a case involving an allegation of non-compliance with the conditions in an undertaking and of non-payment of duty. In Costa Foods v. Collector of Customs -1989 (43) E.L.T. 279, Goods imported at Madras were cleared duty free on the basis of advance licence under Notification No. 117/78. The appellant filed Shipping Bill at Cochin for export in dischage of export obligation. Documents seized by officers attached to Cochin Custom House showed that the imported goods had not been utilised in the goods sought to be exported and only locally made goods were used. The Customs authority at Cochin issued show cause notice followed by an adjudication order holding that the appellant had made a wrong declaration in the Shipping Bill and was liable to pay duty on the goods imported at Madras. The Tribunal set aside the order on the ground of lack of territorial jurisdiction, relying on the decision in Metro Exports case.
8. All the above decisions were in cases of irregular clearance of goods imported at one place and action taken by the Customs authority of another place without territorial jurisdiction over the place of import passing adjudication orders. The decisions lay down that the Collector of Customs or proper officer not having territorial jurisdiction over the place of import or clearance of imported goods cannot act against the order passed by the jurisdictional proper officer under Section 47 of the Act and that such an order will stand and has to be respected until challenged successfully in accordance with the provisions of the Act. This principle will apply to a case where an order under Section 47 has been passed by proper officer. The notice can be issued and adjudication order can be passed only by a competent proper officer having territorial jurisdiction over the place of import or clearance. The notice referred to in Section 110(2) of the Act and the proviso thereto is such show cause notice preceding adjudication. Necessarily it is only the Collector of Customs who or whose subordinate officers can issue the show cause notice i.e. the Collector of Customs having territorial jurisdiction over the place of import or clearance who can extend the period of six months for issue of the notice referred to in Section 110(2) and the proviso thereto. Extension of such period must be proceeded by a show cause notice and opportunity of making an appropriate representation. Obviously it is only such Collector of Customs having territorial jurisdiction who can issue such notice or on whose behalf it can be issued and can pass an order of extension of period.
9. The above principle cannot apply to clandestinely imported goods, that is, goods in respect of which no order has been passed under Section 47 of the Act and no assessment has been made. In such a case, there is no assessment or order passed by a proper officer having territorial jurisdiction over the place where the goods have been seized. The proper officer having jurisdiction over the place of clandestine import and the proper officer having jurisdiction over the place of seizure, either of them can take action. The latter can himself take action or he can bring the facts to the notice of the former, who can thereupon take action. The cause of action which commenced at the place of clandestine import continues and removal or transfer of such goods is part of the continuing cause of action. A part of the cause of action is at the place to which the goods are conveyed and the proper officer having territorial jurisdiction over the place of seizure has jurisdiction to initiate, conduct and conclude adjudication proceedings. In such a case, the Collector of Customs having territorial jurisdiction over the place of seizure has jurisdiction to grant extension of period under the proviso to Section 110(2) of the Act.
10. The impugned order passed by the Collector of Customs (Preventive), Bombay deals with clandestine removal of a part of the goods and misdeclaration of value of another part of the goods. From what we have indicated above, it follows that the impugned order to the extent it relates to goods removed clandestinely has been validly passed by the officer but he had no jurisdiction to pass the order in relation to goods imported and cleared at Mangalore Port on the ground of mideclaration of value or underassessment of duty. The impugned order to the extent it relates to allegation of misdeclaration of goods cleared at Mangalore on payment of duty is without jurisdiction and is set aside. It is made clear that the adjudication proceeding initiated by him on the allegation of clandestine removal of goods at Mangalore Port is valid. The appeal is allowed only in part as indicated above.