Customs, Excise and Gold Tribunal - Mumbai
Natwarlal Jethalal Solanki And Ors. vs Collector Of Customs on 30 September, 1987
Equivalent citations: 1988(34)ELT257(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. Appeal CD(Bom) 530 of 83 arises out of and is directed against order-in-original No. 68/Addl. Collr./1982 dated 30.11.1982 passed by the Addl. Collector of Customs, Ahmedabad.
2. The appeals CD(Bom) 562 of 83, 563 of 83, 564 of 83 and 654 of 83 arise out of and are directed against the Order-in-Original No. 80/Addl. Collr./1982 dated 30.11.1982 passed by the Addl. Collector of Customs, Ahmedabad.
3. As these appeals involve common questions of law and somewhat similar facts they were clubbed together, heard together and hence this common order.
4. The brief facts necessary for the disposal of these appeals are :
On information that Shri Jethalal Nanji Solanki of M/s. Jethalal Nanji & Co., Bhuj was exporting silver illegally out of India to Pakistan his residential and business premises were searched by the Customs Officers of Bhuj on 24.2.1982. From the residential premises 467 pieces of silver coins marked as "5 Koris" of Kutch State valued at Rs. 16,345/- and Indian currency worth Rs. 15,000/-were seized. The officers of the Customs also seized 24.226 kgs of silver bullion in the form of 'Chaka' valued at Rs. 36,173/80 from the shop premises of M/s. Dethalal Nanji, After investigation two separate show cause notices were issued in respect of the two searches. After the receipt of the reply to the show cause notices, by two separate adjudication orders, the Addl. Collector of Customs, Ahmedabad ordered confiscation of the seized coins and silver bullion Under Section 113(c) as well as Under Section 113(1) of the Customs Act. In respect of the seizure of silver coins the Addl. Collector imposed a penalty of Rs. 2,000/- on Shri Natwarlal J. Solanki.
5. In respect of the seizure of silver bullion, the Addl. Collector imposed a penalty of Rs. 2,500/- each on the partners of the firm M/s. Jethalal Nanji & Co. and also on the firm. Feeling aggrieved by the above orders, Natvarlal J. Solanki, Shri Jethalal Nanjibhai Solanki, Shri Harish Jethalal Solanki and M/s. Jethalal Nanji & Co. have filed the above appeals. During the hearing of these appeals, among other contentions, Sh. B.M. Parikh, who had appeared for the appellants, contended that no part of Bhuj town falls within 50 kilometres in width from the coast and as such Chapter IV-B of the Customs Act is inapplicable. Therefore, the entire proceedings initiated against the appellants are wholly illegal and the orders of confiscation and penalty are unsustainable in law.
6. The other legal contentions taken by Shri Parikh was that the learned Addl. Collector had ordered confiscation of the seized silver Under Section 113(c) but then there is neither allegation nor proof that the silver in question had been brought near land Frontier or the coast of India or near bay, gulf, creek or tidal river for the purposes of being exported from a place other than a land Customs Station or a Customs Port appointed for the loading of silver. He, therefore, urged that the confiscation of the silver Under Section 113(c) is wholly illegal.
7. Shri Parikh had urged that the contention regarding Bhuj being not a specified area had been taken before the adjudicating authority but the adjudicating authority had not dealt with that aspect nor recorded a finding that the town Bhuj is a specified area to which the provisions of Chapter IV-B are applicable.
8. In support of the contention that Bhuj does not fall within 50 kilometres in width from the coast, Shri Parikh firstly relied on a political map of State of Gujarat based on Survey of India Map with the permission of Surveyor General of India. This map produced by Shri Parikh contains an endorsement "The external boundary and coast line of India agrees with the Record/Master copy certified by Survey of India, vide their letter No. TB. 803/62-A-3/274 dated 23.3.1982. Secondly a certificate issued by one Shri N. N. Mehta, a Consulting Engineer who had certified that there is no sea within a crow fly distance of fifty kilometres from Bhuj city of Kutch District.
9. Shri Pattekar appearing for the Collector also produced a Political Map of Gujarat State published in the year 1985. The map contains an endorsement "Based upon Survey of India map with the permission of the Surveyor General of India. The responsibility for the correctness of internal details rests with the publisher". Shri Pattekar contended as per the map produced by him, Bhuj would fall within 50 kilometres width from the coast. Shri Pattekar also placed reliance on a Public Notice issued by the Baroda Collector, dated 10.1.1969. In this Public Notice, the Collector of Baroda had clarified for the information of silver trade and public in general the places falling within the inland area of 50 kilometres in width from the coast of Gujarat State and Daman and Diu. Among the places mentioned, the town 'Bhuj' appears. Shri Pattekar therefore contended that there is no force in the contention of Shri Parikh that the provisions of Chapter IV-B are not applicable to the town of Bhuj.
10. As regards the liability of the seized silver confiscated Under Section 113(c) the submission of Shri Pattekar was that the information received by the Department was that the main partner and the firm was exporting silver illegally out of India to Pakistan and the silver was also found within the specified area. And therefore, the Addl. Collector was right in ordering confiscation Under Section 113(1).
11. In reply to Shri Pattekar's contention, Shri Parikh submitted that Public Notice has no statutory force. The same is not binding on the appellant. He urged that the appellant had taken a specific contention before the Addl. Collector as to the applicability of the revisions of Chapter IV-B. The Addl. Collector ought' to have considered that contention and recorded his finding. The Department had not produced the Public Notice or any authentic document before the adjudicating authority and Shri Parikh therefore prayed that the matter may be remanded to the Addl. Collector for determination of the question as to whether Bhuj town or any part of which falls within 50 kilometres width from the coast of Gujarat.
12. As I am inclined to accept the contention of Shri Parikh, that the matter requires to be remanded, I do not propose to go into the other contentions, except the order of confiscation Under Section 113(c) raised by Shri Parikh or Pattekar.
13. In appeal CD(Bom) 530/83 while setting out the contentions urged during the personal hearing, the Addl. Collector had referred to the contentions as to the non-applicability of Chapter IV-B. The relevant portions reads : "Further he stated that the 50 kms. from any coast of India, under the circumstances he pleaded that there is no contravention whatsoever and therefore the show cause notice should be discharged and the silver under seizure may be returned to the party".
14. In the whole of his order the learned Addl. Collector did not consider the said contention urged on behalf of the appellant.
15. Before an order of confiscation could be made Under Section 113(1) the Department has to establish that Bhuj town or any part of it falls within 50 kilometres width from the coast of Gujarat. If Bhuj or any part -of Bhuj town does not fall within 50 kilometres in width from the coast of Gujarat or Daman and Diu, then there is no scope to invoke Chapter IV-B of the Customs Act or to order confiscation Under Section 113(1) of the Customs Act. The contention raised involves a question of jurisdiction of the authorities to initiate action for violation of provisions of Section 113(1) of the Customs Act. It was obligatory on the part of the adjudicating authority to decide its jurisdictional question before ordering confiscation Under Section 113(1). Being a jurisdictional question it could be raised even at the stage of appeal. In the instant case this had been raised even at the adjudication stage. In my view, an opportunity should be given to both the sides to adduce evidence to determine the question as to whether Bhuj town or any part of it falls within 50 kms. width from the coast of State of Gujarat or Union Territory of Daman and Diu.
16. The Public Notice relied on by Shri Pattekar has no statutory force. Therefore that cannot be made a basis to hold that the town of Bhuj falls within 50 kilometres of width from the coast of Gujarat or Daman or Diu.
17. If I could uphold the Addl. Collector's order of confiscation Under Section 113(c) there would not have been any necessity to remand the matter for the purposes of determination of the jurisdictional issue. But then, on the fase of it, the finding of the Addl. Collector that the seized goods have become liable to confiscation Under Section 113(c) is not sustainable in law. In order to attract the provisions of Section 113(c), the Department has to firstly establish that the seized silver were brought near land frontier or the coast of India or near any bay, gulf, creek or tidal river for the purpose of being exported and secondly that the silver so bought was to be exported from a place other than a Land Customs Station or a Customs Port appointed for the loading of such goods. There is no allegation nor proof to establish the two ingredients. The reasons given by the Addl. Collector for ordering confiscation Under Section 113(c) were firstly that the party was indulging in illegal export of such silver was the specific information and secondly, the party has not been maintaining a clear account and thirdly they were kept in the specified area for the purpose of illegal export. The Addl. Collector, no where, stated that the silver in question was brought near land frontier or the coast of India or creek or tidal river for the purpose of being exported from a place other than land Customs Station or Customs Port apart from loading of silver. In the absence of such a finding the order of confiscation Under Section 113(c) is not sustainable under Law. And therefore, the same is required to be set aside, and accordingly, I set aside the same. But then, to determine the liability of seized silver to confiscation Under Section 113(1), it is necessary to consider the contention of the appellants as to the non-applicability of Chapter IV-B to Bhuj town but then the proper authority to consider this question is the adjudicating authority and further it is necessary that there should be proper evidence for final determination of this question. I, therefore, accept Shri Parikh's contention that the matter should be remanded to the Addl. Collector for consideration afresh.
18. In the result, I allow all these appeals, set aside the order of confiscation made Under Section 113(c) but remand all the matters to the Additional Collector of Customs, Ahmedabad for determination afresh as to the liability of the seized silver for confiscation Under Section 113(1) of the Customs Act. The parties are at liberty to adduce evidence before the Additional Collector. The Addl. Collector shall determine the question as to the applicability of Chapter IV-B and other questions in the light of the observations contained in this order and thereafter pass such order as he consider fit but in accordance with law.