Customs, Excise and Gold Tribunal - Calcutta
Dolphin Laboratories vs Collector Of Customs on 29 December, 1986
Equivalent citations: 1988ECR45(TRI.KOLKATA), 1987(29)ELT243(TRI-KOLKATA)
ORDER S.K. Bhatnagar, Member (T)
1. This is an appeal against the order of the Additional Collector No. 169, dated 25-11-1982, by which he has imposed a redemption fine on the appellants.
2. The learned Advocate Shri J.N. Roy submitted that the appellants have riot committed any charge of violation of any provision of the Customs Act against them.
3. The fact is that they had imported a consignment of drugs and medicines by ship M.V; TAIAN.
4. After the ship had berthed, some miscreants stole the goods and were trying to take them away in a boat when they were apprehended by the CISF.
5. In the meanwhile, they had filed the bill of entry and got it processed but when they went to docks they were told by the C.P.T. that the goods had shortianded. The CISF subsequently handed over the goods to the customs and the customs authorities issued show cause notice to the steamer agents and a number of importers whose goods were found on boat including the appellant.
6. They approached the Custom House with the request that since they had imported the goods legally and their bills of entry have been processed and they had also paid the duty, the goods may be released to them. Accordingly, the goods were released to them and were cleared by them out of Customs control after payment of duty on 8th December, 1980. The goods passed out of customs control on 18-12-1980.
7. During the course of adjudication ' proceedings they had made their submissions and the Additional Collector came to the conclusion that they were not guilty and passed an order dated 4-6-1981. However, he confiscated the goods in question and imposed a redemption fine of Rs. 30,000/- on the steamer agents with reference to all the seized goods including their consignment.
8. Since the goods had already been released to them before passing of the order and no fine or penalty was imposed on them, therefore, they were not required to take any further action. But the steamer agents who were asked to pay the redemption fine and on whose master a penalty was imposed, appealed to the Board and the Board set aside a part of the order in so far as it related to Section 111D and remanded the case to the Additional Collector on the ground that Under Section 125 redemption fine could only be imposed on the owner of the goods.
9. The Board also did not held the present appellants as guilty of violation of any provision of law.
10. During the remand proceedings also, the Additional Collector did not hold them guilty of violation of any provision of the Customs Act. However, he felt that since the order of confiscation had already been upheld and the option to pay the fine in lieu of confiscation is required to be given to the owners, therefore, he imposed a fine on the importers including the present appellants.
11. It was his submission that since they were not held as guilty at any stage of the proceedings including both initial and remand proceedings, therefore, it was incorrect to impose any fine. Indeed, they were not liable to pay any fine. It was also his submission that as the goods have already been released by the Customs before the first order-in-original was passed and the goods were not actually available for confiscation at the time of passing of the order, in fact, it was wrong on the part of the Additional Collector to say that the seized goods under Sl. No. 1-6 of the search list 'are confiscated'.
12. Similarly, at the time of remand proceedings they neither received any notice nor were asked to appear before the Additional Collector and no persona] hearing was in fact granted with the result that they had no opportunity to state that the goods had been released on payment of duty and were already with them and that they were not liable to pay any fine, but in any eventuality, since the goods had been legally imported and had been duly cleared by the Customs on payment of duty by them, they were not held as guilty of violation of any provision of the Customs Act and, therefore, it was not correct or proper on the part of the Additional Collector to pass an order of confiscation and to impose a redemption fine and to ask them to pay the same. He would, therefore, pray that the order may be set aside.
13. Shri Chakraborty speaking for the department submitted that the learned Counsel has correctly stated the facts of the case. He would only like to mention and emphasise that the Board had upheld the Department's charges with reference to Section 111(h) and (j) and thus the goods were held as liable to confiscation with reference to these provisions. The Board's order was thus in the nature of a limited remand and the Additional Collector hearing the case, in the remand proceedings, was required to act within the ambit of this limited remand. The appellant has come up in appeal against this order of the Additional Collector. He, however, agrees that the appellants were not held as guilty of violation of any provision of the Customs Act, 1962 but the goods were held as liable to confiscation in terms of Section 11 l(h) and (j) referred to above. It was his contention that action against goods is action in rem and not action in personam, and Under Section 125 redemption fine could only be imposed on the owner of the goods. Therefore, keeping the Board's observation in mind the Additional Collector has passed the present order.
14. He would also like to clarify that the goods were ordered to be released on payment of duty at the request of the appellants and the release was a provisional release on an undertaking to abide by the adjudication order to be passed by the Additional Collector. He would also like to clarify that during the remand proceedings the appellants were not given any show cause notice but were offered an opportunity to appear in person, but the appellants were merely content by sending a reply in writing and did not avail of the opportunity.
15. We observe that the submissions of learned Advocate for the appellant Shri J.N. Roy are correct both on facts and in respect of law.
16. We find that the department has also conceded that the appellant was not held guilty of any offence whatsoever at any stage and that the goods in question belong to him, and were allowed to be cleared by the Customs in due course.
17. We also observe that the learned J.D.R. is correct in pointing out that the impugned order was passed as a result of an order of remand by the Board and, therefore, the learned Additional Collector was required to keep the Board's observations in mind.
18. However, it is obviously not correct or proper to make a person suffer financially or otherwise when he was admittedly not guilty.
19. Merely because action against goods is action in rem it does not mean that a person who had committed no offence in respect of them or with reference to them could be made to suffer by way of payment of fine or otherwise. We will do well to remember, in this connection, that imposition of fine in effect, amounts to awarding a punishment to the person held liable to pay the same and we can hold a person as liable to punishment only if we find him responsible for some act of omission or commission with reference to the law and the goods in question. In our view, to impose or inflict punishment (directly or indirectly) on a person who is not guilty is against all canons of natural justice and fair play. Even otherwise, merely because the goods were liable to confiscation it was not always necessary to impose a fine in lieu of confiscation; in the same way, as merely because a penalty was imposable under a provision, it was not necessary that it must always be imposed. The facts and circumstances of the case, as a whole, have to be borne in mind and it has to be ensured that absurd situations, unintended by law, do not result. There are umpteen cases in which goods are released on caution or warning when some technical violation or breach of provision is noticed and imposition of fine or penalty is not warranted. In the instant case, there was no cause even for caution or warning as the appellant was admittedly not guilty at all.
20. In other words, there was no justification for imposition of any fine.
21. As already observed, although action against goods is action in rem ultimately the fine is paid or required to be paid by the owner of the goods, just as a penalty is paid or required to be paid by the person who has violated the law and, therefore, the only difference between the two is that in the case of fine, the punishment is imposed indirectly and in the case of penalty, the imposition is directly on the person. But in both' the cases it is the non-observance of law by the person concerned which is required to be established in the first instance; and the observations of the Hon'ble Supreme Court in the case of Hindusthan Steel Ltd. v. State of Orissa reported in AIR 1970 (SC) 253 regarding the principles underlying the imposition of penalty are required to be kept in mind and duly applied, mutatis mutandis, in cases of confiscation of goods and imposition of redemption fine as well.
22. We may also mention en passant that actually the reason for remand by the Board is not very clear. As far as we can see, there was hardly any justification for the order of remand itself, but we are refraining from going into this aspect further as the Board's order is not in appeal before us (as rightly pointed out by the learned JDR).
23. We further observe that the learned Counsel for the appellant was also correct in pointing out that the goods had already been cleared in the normal course by the Customs and had been taken over by then before the de novo proceedings (arising out of the Board's order of remand) and therefore, during this proceedings the Additional Collector could not have confiscated the goods which were no longer available for confiscation and could not have ordered clearance of goods which had already been cleared through Customs (whether on Bond or otherwise). In fact, a question of redemption does not arise in these circumstances. In this view of the matter also, the order of the Additional Collector was illogical and incorrect.
24. In the light of above discussions, we hold that the learned Additional Collector had erred in imposing a fine and making the appellants liable to pay the same when they were admittedly not guilty of any offence whatsoever with reference to or in respect of the goods in question. The order of the Additional Collector was even otherwise vague and incorrect. We, therefore, set aside the order of the learned Additional Collector and allow the appeal, as already announced in open court.