Calcutta High Court
Suresh Bhosle vs Commissioner Of Customs (Preventive) on 3 November, 2008
Author: Pinaki Chandra Ghose
Bench: Pinaki Chandra Ghose
GA NO. 454 OF 2008
CUSTA No. 2 of 2008
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Customs)
ORIGINAL SIDE
SURESH BHOSLE
Versus
COMMISSIONER OF CUSTOMS (PREVENTIVE)
BEFORE:
The Hon'ble JUSTICE PINAKI CHANDRA GHOSE
The Hon'ble JUSTICE SANKAR PRASAD MITRA
Date : 3rd November, 2008.
The Court : The instant appeal is against an order dated August 3,
2007 passed by the Appellate Tribunal upholding an adjudication order dated
April 7, 2004 passed by the Commissioner of Customs (Preventive), West
Bengal, Kolkata.
Dr. Chakraborty submitted that the order passed by the adjudicating
authority, inter alia, absolutely confiscating the seized gold under
sections 113(b) and (d) of the Customs Act, 1962, import of gold was allowed
"Free" under the Export-Import Policy, 2002-07, as amended and, hence, gold
was not "prohibited goods" within the meaning of the Customs Act but was
'dutiable goods' within the meaning of the said Act. As such, it was
incumbent upon the adjudicating authority to, under Section 125(1) of the
Customs Act, allow redemption of the confiscated gold, upon payment of a
redemption fine to be fixed by the adjudicating authority.
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He further submitted that even if it is held that gold continued to
remain "prohibited goods" on the relevant date, within the meaning of the
Customs Act, the adjudicating authority had discretion conferred by Section
125(1) of the Act to order release thereof on payment of fine in lieu of
confiscation. In the event the adjudicating authority was not inclined to
exercise his discretion, it was incumbent upon him to state the reasons
therefor in his order. In the instant case the adjudicating authority has
absolutely confiscated the seized gold without considering the question of
release thereof upon payment of fine in lieu of confiscation in terms of
Section 125(1) of the Act.
According to him the learned Tribunal only dealt with the first of
the submissions made on behalf of the appellant.
It appears that in this matter the only question which asks our
opinion and raised by the appellant that when there is an option to pay fine
in lieu of confiscation as specifically enumerated in Section 125 of the
Customs Act, 1962, which is reproduced herein :
" 125. Option to pay fine in lieu of confiscation.- (1) Whenever
confiscation of any goods is authorised by this Act, the officer adjudging
it may, in the case of any goods, the importation or exportation whereof is
prohibited under this Act or under any other law for the time being in
force, and shall, in the case of any other goods, give to the owner of the
goods [or, where such owner is not known, the person from whose possession
or custody such goods have been seized,] an option to pay in lieu of
confiscation such fine as the said officer thinks fit:
Provided that, without prejudice to the provisions of the proviso to
sub-section (2) of section 115, such fine shall not exceed the market price
of the goods confiscated, less in the case of imported goods the duty
chargeable thereon."
Dr. Chakraborty further submitted that the Tribunal relied upon a
decision of this High Court reported at 2000 (120) ELT 322 (Cal.)
Commissioner of Customs (Preventive) vs. Uma Shankar Verma.
The learned Tribunal failed to appreciate that the Hon'ble Division
Bench held that even if the 'prohibited goods' within the meaning of the Act
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there is an option with the adjudicating authority to allow release of the
said goods upon payment of a fine in lieu of confiscation.
Dr. Chakraborty submitted that the learned Tribunal failed to
appreciate the said position.
The learned senior advocate appearing on behalf of the appellant
contended that the learned Tribunal who passed the order for absolute
confiscation it was his duty to properly exercise his discretion
judiciously. According to him, it has not been done by the learned Tribunal
and had the discretion is being applied judiciously the appellant ought to
have got a chance to give the option for redemption. It is further the case
of the appellant/petitioner that the learned Tribunal did not apply the
discretion judiciously which would be evident from the order so passed by
the learned Tribunal.
A decision has also been relied upon before us which is reported in
1982(2) SCC page 230 (Hargovind Das K. Joshi & Ors. vs. Collector of Customs
and ors.) where the Supreme Court has laid down the law as follows:
"3. We are of the view that insofar as the order directing
confiscation of the goods is concerned, it is unassailable in facts or in
law. So also the order levying penalty is justified by facts and warranted
by law. There is, however, substance in the last contention urged on behalf
of counsel for the appellants. The Collector of Customs has passed an order
for absolute confiscation of the imported goods without giving the
appellants an option to redeem the same on payment of such fine as may
considered appropriate by him. Reliance has been placed by learned counsel
for the appellants on Section 125(1) of the Customs Act in support of the
plea that the Collector had the discretion to pass such an order and he
should have addressed himself to the question whether or not the discretion
should be so exercised having regard to the facts and circumstances of the
case. The Additional Collector of Customs who passed the order of
confiscation undoubtedly had the discretion to give an option to the
appellants to pay a fine in lieu of confiscation. Presumably the Additional
Collector of Customs assumed that he was bound to confiscate the goods
because he has not adverted to this aspect in his order. He had undoubtedly
the authority under the law to give an option to the importers to pay such
fine as was considered appropriate by him (not exceeding the full market
value of the goods in question) in lieu of confiscation of the goods. We
are of the opinion that since the Additional Collector of Customs who passed
the order for absolute confiscation had the discretion to give the option
for redemption, it was but just, fair and proper that he addressed himself
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to this question. The order passed by the Additional Collector of Customs
as confirmed by the Customs, Excise and Gold (Control) Appellate Tribunal
therefore requires to be modified only to this limited extent.
4. We therefore direct that the matter be remitted to Collector of
Customs for this limited purpose to this limited extent as to whether or not
to give an option to the importers (appellants) to redeem the confiscated
goods on payment of such fine as may be considered appropriate by him in
lieu of confiscation. It will be open to the concerned officer to take a
decision one way or the other in accordance with law as is considered
appropriate in the circumstances of the case after hearing the appellants.
We have no doubt that the concerned officer will take into consideration all
the relevant circumstances including the submission urged on behalf of
counsel for the appellants that the goods in question, zip fasteners, can at
present be imported freely, for whatever it is worth."
In the instant case the adjudicating authority without adverting to
this aspect of Section 125(1) of the Act proceeded to confiscate absolutely
the seized gold. No reason was disclosed in the impugned order as to why
the adjudicating authority was of the conclusion that the discretion
required to be exercised by him under Section 125(1) of the Act was not to
be exercised in the facts and circumstance of the instant case.
We have also heard the learned counsel appearing on behalf of the
respondent and as it appears that there is no doubt with regard to the
exercising such discretion judiciously by the learned Tribunal and he also could not join issue in respect there with the learned advocate appearing on behalf of the appellant, therefore, in our considered opinion the matter is to be remitted back before the authority for this limited purpose and to this limited extent as to whether or not to give an option to the appellants to redeem the confiscated goods on payment of such fine as may be considered appropriated by him in lieu of confiscation.
Accordingly, we direct the said authority to decide the matter within six weeks from the order so passed by us.
The order appealed is, therefore, modified or set aside to this extent.
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The appeal is treated as on day's list and disposed of by consent of parties.
All parties concerned are to act on a signed copy of the minutes of this order on the usual undertakings.
Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(PINAKI CHANDRA GHOSE, J.) (SANKAR PRASAD MITRA, J.) kc.
R.O.(ct.)