Judgment

BACHAWAT, J.: The appellant M/s. Hind Trading Company, imported 1,65,000 pieces of Chinese silver dollars from Yatung in Tibet to Kalimpong, via Nathula Pass and Hungpo through Sikkim State under two Reserve Bank import licences, dated April 22, 1957. As there were two Reserve Bank licences, the dollars were divided into two lots at Yatung. Each lot consisted of 66 bags containing 82,500 dollars. One lot of bags bore the mark "H.D. and Serial Nos. 1 to 66, and the other lot bore the mark "H. N. and Serial Nos. 1 to 66. On May 15, 1957, the appellant made two applications bearing Nos. 32 and 34 to the officer-in-charge. Land Customs Station, Kalimpong, for the grant of permits for passing the goods across the frontier. Application No. 32 related to the bags marked "H. N. Application No 34 related to the bags marked "H.D. . On May 16, the two consignments arrived at the land Customs Station, Kalimpong and were examined and appraised by the Land Customs Officer-in-charge of the station On the duty being paid, the officer endorsed the two applications, certifying that the duty was paid and permitting the import of the goods. The consignments loaded in trucks then passed out of the Customs House and on the way to Silguri were checked at the Teesta Bazar check-post at 8-45 p.m. on May 16. On the night of May 16, they reached Siliguri and were delivered to M/s. Amalgamated Transport Co., for carriage by air to Dum Dum. On the morning of May 17, one consignment of 22,500 dollars packed in 66 bags together with the import appln. No. 34 was sent by plane from the Sonapur airstrip to Dum Dum Airport and on the same date the consignment reached Dum Dum and was delivered to the appellant at Calcutta. On May 18, 1957, the Range Officer, Matidhar, seixed the second consignment to 82,500 dollars packed in 66 bags bearing the mark "H.D. together with the application No. 32, when they were about to be despatched by air from the Sonapur airstrip. The seizure was made under s. 5 (3) of the Land Customs Act on the ground that the mark on the bags was "H.D. whereas the accompanying import appln. No. 32 related to "H.N. bags.

2. On July 7, 1957, the Collector of Land Customs, Calcutta, issued a notice to the appellant to show cause why the dollars seized on May 18, 1957, should not be confiscated and why a penalty should not be imposed upon the appellant under Sections 5 (3) and 7(1) of the Land Customs Act, 1924, and Section 167 (8) read with Section 19 of the Sea Customs Act, 1878 as made applicable by S. 23-A of the Foreign Exchange Regulation Act, 1947, as there was reason to believe that the goods had been imported by the appellant by land from Tibet into India on lay 16, 1957 through Indo-Tibet border, (i) without a valid permit under Section 5 of the Land Customs Act, and (ii) without valid permission granted by the Reserve Bank of India under notification No. F. 3 (84) E. F. VII/56 dated May 4, 1956 issued under Section 8 (1) of the Foreign Exchange Regulation Act. That notification prohibited the import into India of silver coins current in the Tibet region of China without the permission of the Reserve Bank of India. On July 30, 1957, the appellant showed cause against the proposed action by a letter stating that the first consignment of 82,500 dollars was packed in bags marked "H.N. , that by inadvertence the carriers M/s. Amalgamated Transport Co., had sent import application No. 34 with the first consignment and had kept application No. 32 with the bags marked "H.D. , that the two consignments were covered by valid Reserve Bank licences and import passes, that the seixure of the dollars kept in "H.D. bags under Section 5 (3) of the Land Customs Act was not justified and that there was no ground for confiscating the goods or imposing any penalty. The appellant was heard by the Collector on August 26, and December 11, 1957. On January 10, 1958, the Collector passed an order adjudging that offences under Section 5 (