Madras High Court
K.P. Abdul Majeed vs Collector Of Customs And Central ... on 14 July, 1995
Equivalent citations: 1995(80)ELT35(MAD)
ORDER
1. In respect of seizure of 900 gold bars at Kerala by the Special Customs Preventive Unit, Calicut, a case was initiated under the Customs Act by the Central Excise Collectorate, by the issuance of a show cause notice dated 11-8-1989. Ultimately, the said proceedings ended in the levy of a penalty of Rs. 25,00,000/- on the petitioner. It is stated that the appeal against the said levy of penalty is pending before the Customs, Excise and Gold (Control) Appellate Tribunal. The grievance of the petitioner in this writ petition is that simultaneously action is being taken by the second respondent for the seizure of gold bars which were transported to Coimbatore by one P. B. Nawaz Khan. While taking action against the said P. B. Nawaz Khan and his associates, a show-cause notice was also issued to the petitioner asking him to show-cause why penalty should not be levied on him with respect to the dealings of the said Nawaz Khan. According to the petitioner, the sale and purchase of about 700 gold bars by the said Nawaz Khan was completed at Calicut on 24-2-1989 and beyond that the petitioner had no connection with the said Nawaz Khan or the transfer of the gold to Coimbatore. The petitioner pointed out that paragraph 62 of the show-cause notice itself clearly indicated that the seizure at Coimbatore was nothing but a follow-up action in respect of seizure at Calicut and therefore, the petitioner cannot be made liable once over again. In other words, it was contended that there was no cause of action against the petitioner in respect of the action initiated against the said Nawaz Khan and his associates and therefore, the second respondent has no jurisdiction to levy penalty against the petitioner. By the impugned order dated 30-12-1991 a penalty of Rs. 5,00,000/- has been imposed on the petitioner. The only argument of Mr. Abdul Karim, learned Senior Counsel is that the Customs Act does not authorise the second respondent to levy penalty in respect of self same goods especially when there is no cause of action in so far as the petitioner is concerned. It is contended that even the show-cause notice does not indicate that the petitioner had played any part in the seizure of the gold at Coimbatore or the smuggling of the same into Coimbatore.
2. The second respondent has filed a counter affidavit stating that the writ petition is not maintainable because against the impugned order there is a statutory appeal provided to the Customs, Excise and Gold (Control) Appellate Tribunal. On merits, it is contended that the petitioner is involved in the smuggling of 650 gold bars into Coimbatore and the proceedings initiated by the second respondent is totally independent of the proceedings initiated by the first respondent. In respect of seizure of 650 gold bars at Coimbatore the investigation revealed that the petitioner was also involved in the smuggling and the alleged acts of commission on the part of the petitioner was distinct and different from those for which a penalty was levied by the first respondent. In particular, it is contended that the action against the petitioner is under Section 112(b) of the Customs Act and Section 74 of the Gold Control Act whereas the action of the first respondent was initiated under Section 112(a) of the Customs Act. The role of the petitioner in so far as the smuggling of 650 gold bars seized at Coimbatore on 1-3-1989 is clearly distinct from the earlier offence. It is therefore, contended that the impugned order is perfectly valid and within the jurisdiction of the second respondent.
3. Before adverting to the facts of the case, it is good to remember the provisions of law under which action is purported to have been taken. For this purpose, one has to refer to Section 112(a) and (b). It is as follows :
"112. Penalty for improper importation of goods etc. Any Person - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act, or
(b) who acquires possession of or is in any way concerned in carrying, removing,.. depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111."
There is no dispute that the subject goods are liable for confiscation being of foreign origin and coming within the mischief of Section 111 of the Customs Act. The question is only whether the petitioner is liable to be penalised under Section 112(b) of the Customs Act and whether such penalty can be imposed by the second respondent. There are notifications issued under Section 4(1) of the Act appointing officers as Collectors of Customs for specified territorial areas. In respect of the following areas, the notification says that the Collector of Customs, Cochin (Ist respondent) will have jurisdiction "the whole of the State of Kerala, the Union territory of Lakshdweep and the territory of Mahe of the Union territory of Pondicherry. " Similarly, the second respondent namely, the Collector of Customs has jurisdiction over the following areas :-
"The whole of -
(a) the State of Tamil Nadu, excluding (i) the areas under the jurisdiction of the Collector of Customs, Madras, and (ii) the areas under the jurisdiction of the Collector of Customs and Central Excise, Madurai as defined in Rule (2) (ii) of the Central Excise Rules, 1944, and
(b) the Union territory of Pondicherry (excluding the territory of Mahe and the village of Yanam) ".
4. With the above legal position let me now examine whether the second respondent has disclosed in his order the relevant facts which would give him power to penalise the petitioner and pass the impugned order. Both the counsel have taken me through various portions of the order to emphasise their respective cases. I will first refer to the order of the first respondent dated 11-2-1991 to see the extent to which the petitioner was punished in respect of the gold haul of 900 biscuits at Calicut on 24-2-1989 at the residence of one N. K. Abdul Rahiman and the seizure of 16 cloth jackets containing 1596 gold biscuits from the Car KEZ 2028 parked in the residential premises of one K. V. Moosan Haji, Tellichery. In respect of these seizures, after due investigation the following finding was rendered :-
"Accordingly, I find that K. P. Abdul Majeed (Petitioner herein) is the kingpin of the entire operation assisted by various persons in some capacity or the other. No statement could be recorded from Abdul Majeed and even when he appeared once before the Assistant Collector of Customs, S. C. P. Division, Calicut, he never chose to give any statement or volunteered any information. But all the others in these proceedings have implicated his involvements and I have no hesitation to hold that he is the person directly connected with the smuggling of 25 jackets of gold biscuits which were actually seized. He was behind arranging the team for transporting the gold from the main vessel to the sea-shore, transferring part of it from the sea-shore to the house of Abdul Rahiman and also transporting another portion in the contessa car parked in the compound wall of the house of K. V. Moosan Haji.
The entire 900 + 1596 gold biscuits were confiscated and the petitioner was levied with a penalty of Rs. 20,00,000/-.
5. The impugned order of the second respondent arises out of the seizure of six jackets containing 600 gold biscuits from the house of one V. C. Soundararajan at 25, Nallasivan Street, Coimbatore on 1-3-1989, as well as the seizure of gold biscuits from the room occupied by one James Pichai at R. K. Chetty street, Coimbatore. In respect of these seizures one P. B. Nawaz Khan was found to be the main culprit. He had stated that he knew the Petitioner as one engaged in the smuggling of gold in Kerala and that he (Nawaz Khan) used to purchase gold from the smugglers at Kerala and sell them in Coimbatore. The relevant finding so far as the petitioner is concerned is as follows :
"It is thus clear that K. P. Abdul Majeed (Petitioner) together with E. Prasad and E. Pramod removed 7 jackets of Gold from the house of E. Prasad at Chevarambalam to the car KLH 8181 of Nawaz Khan who transported them to Coimbatore. Shri Assu, s/o. Majeed assisted them in carrying and keeping the contraband Gold. Shri K. Abdullah was thus concerned in the smuggling of the Gold Bars under seizure."
6. The learned counsel for the respondent has taken me through paragraphs 4, 17, 40, 45, 64, 67 and 69 of the impugned order to impress upon me that the petitioner had some part to play in the transfer of the gold to Coimbatore. But a careful reading of the passages clearly shows that whatever part the said Petitioner had played in the appropriation of the subject gold from the main cargo of smuggled gold and sending them to Coimbatore, the Petitioner never left the Kerala territory or accompany the gold while being transported to Coimbatore. In other words he never did anything within the territorial jurisdiction of the second respondent. In fact the second respondent says that it was apparent that the gold seized by the first and second respondents are interlinked and are traceable to the same source operating on the Kerala Coast. The finding of the second respondent is as follows :
"The details of such evidence are discussed below and it prima facie appears that the complicity of Shri Kadavath Abdullah, K. P. Abdul Majeed (Petitioner), Assu, E. Prasad and E. Pramod in supplying the contraband gold stands further exposed by the statements of the following persons. ".
Later the second respondent finds :
"From this deposition it will be quite clear that both S/Shri Kadavath Abdullah and Abdul Majeed (Petitioner) had equally vital roles to play in regard to landing and disposal of contraband gold and this is significant in the context of the seizure of 650 gold bars also and they are thus equally culpable. Thus, the allegations made against S/Shri K. Abdullah, K. P. Abdul Majeed (Petitioner) and Assu in the show-cause notice issued for the seizure of 650 gold bars at Coimbatore on 1-3-1989 stand established and all the three are liable for penal action under both the Acts".
7. Neither the discussions nor the findings of the second respondent disclose any overt act on the part of the petitioner within the territorial jurisdiction of the second respondent. It is therefore, argued that the second respondent cannot fasten any liability on the petitioner in respect of the seizures at Coimbatore. While it may be true that under Section 112(b) of the Act the petitioner might have been responsible For selling or dealing with the very same goods which are seized and confiscated, the argument is that the petitioner is not shown to have done anything within the jurisdiction of the second respondent.
8. On the other hand, reliance is placed on Collector of Customs, Madras v. D. Bhoormull, . That case related only to confiscation of the goods and the Supreme Court observed, "23. Goods found to be smuggled can, therefore, be confiscated without proceeding against any person and without ascertaining who is their real owner or who was actually concerned in their illicit import".
It is next contended by the respondent that the very same argument addressed before this Court in Crl. OP. No. 5520 of 1992 was rejected. The charge in those Criminal cases related to Section 135(1)(b)(1) of the Act read with Section 13(1) of the Foreign Exchange Regulation Act. In seeking to quash the proceedings it was contended that the Chief Judicial Magistrate, Coimbatore, had no jurisdiction. Observed the High Court :
"A reading of the above would show that each and every act is part of a single transaction. It is not as if one can be disassociated from another. It is not as if, the act of one accused is a water tight compartment by itself, so as to segregate it from the act of the other accused. So, I am unable to accept the first submission made by Mr. Abdul Nazeer."
It is no doubt true that an offence under Section 135(1)(b)(1) of the Act is different from penalty under Section 112(b) of the Act.
9. The above arguments advanced on behalf of the petitioner by learned Senior Counsel Mr. Abdul Karim were prima facie attractive. However, on deeper consideration I entertained doubts regarding acceptance of such an argument and therefore, posted the case for further hearing on 30-6-1995 and gave time to the petitioner's counsel to argue further on the tenability of his submissions. After hearing both sides on 7-7-1995 I am of the opinion that the contention advanced on behalf of the petitioner cannot be accepted. My reasons are as follows:
Section 4 of the Customs Act, 1962 only enables the Central Government to appoint Officers of Customs. Section 5 of the Customs Act says that subject to such conditions and limitations as the Board may impose, an officer of customs may exercise the powers and discharge the duties conferred or imposed on him under the Act. I have already noticed the fact that the Notification No. 250/83 Customs, dated 27-8-1983 was issued in exercise of the power under sub-section (1) of Section 4 of the Customs Act appointing certain officers as Collectors of Customs for the areas mentioned in the column against each officers. In respect of the place from which the subject gold biscuits were seized namely at No. 25, Nallasivan Street, Coimbatore on 1-3-1989 and small quantity from a place at R. K. Chetty Street, Coimbatore, there is no dispute that the second respondent has jurisdiction to initiate action. In the course of investigation and enquiry the second respondent had information that it was the petitioner along with certain others who removed about seven jackets of gold from the house of one E. Prasad at Chevarambalam to the car KLH 8181 belonging to one Nawaz Khan who in turn transported the same to Coimbatore. The argument of Mr. Abdul Karim, learned Senior Counsel, is that the second respondent can on doubt, proceed against the person from whom the gold was seized and the person who brought the gold to Coimbatore. His argument is that the person (Petitioner) who sold or transferred the gold at Chevarambalam to one Nawaz Khan, cannot be proceeded against by the second respondent. It cannot be disputed that the person who transferred the gold at Chevarambalam to the said Nawaz Khan is liable under Section 112(b) of the Customs Act. It is in this sense that the second respondent had issued notice to the petitioner because in respect of the goods which was seized at Coimbatore, within his jurisdiction, the petitioner was also found liable under Section 112(b) of the Customs Act. If the argument of the petitioner is to be accepted, it would mean that the second respondent should stop with taking action against the persons who entered his territorial jurisdiction, but refrain from taking action against the persons who dealt with smuggled goods outside his jurisdiction. In my opinion, there is no such restrictions in the Act. There is no procedure to transfer the papers to the Customs Officer in the territorial jurisdiction where the person who smuggled the goods or sold the goods is residing. Further, in Section 122 of the Customs Act relating to adjudication of confiscations and levy of penalties, there is only a monetary limit fixed for each officer of Customs. There is no bar under Section 122 of the Customs Act to proceed against the person who is outside the territorial limits. In this connection, we have to remember that the cause of action arose within the territorial jurisdiction of the second respondent. It so happens that one of the persons involved in the transaction is outside the territorial jurisdiction. Under such circumstances, I am of the opinion that the petitioner cannot import notions of the Civil Procedure Code into the field of adjudication under the Act. Even under the Civil Procedure Code it is well known that whether the cause of action arose within one court, leave to sue can be obtained for proceeding against the person who are outside the territorial limit. In as much as there is no specific bar under the Customs Act, to proceed against the person outside the territorial limit, the plea of want of jurisdiction cannot be urged or accepted. If the argument of the petitioner is to be accepted, in my opinion it would render the Act itself unworkable and cumbersome.
10. Learned counsel for the petitioner has repeatedly referred to passages both in the order of the first respondent as well as the order of the second respondent to suggest that the petitioner had not committed any overt act within the territorial jurisdiction of the second respondent. I am of the opinion that the question cannot be approached from that angle only. We have to approach the question from the fact that the cause of action arose within the jurisdiction of the second respondent where seizure of gold was made and in respect of such gold which is liable for confiscation, who are the persons who get attracted under Section 112(b) of the Act. The Officer who has jurisdiction in respect of seizure of the goods, has, in my opinion, jurisdiction to proceed against all persons who are involved under Section 112(b) of the Customs Act in respect of confiscated gold.
11. In this view of the matter the only contention raised by the petitioner regarding the jurisdiction of the second respondent is rejected. Since no other argument was advanced on the merits, the impugned order of the second respondent dated 30-12-1991 is upheld. The writ petition is accordingly dismissed.
12. No costs.