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1988 Supreme(SC) 341
SUPREME COURT OF INDIA
(BEFORE SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.)
CHUHARMAL
Versus
UNION OF INDIA AND OTHERS
Special Leave Petition (Civil) No. 1008 of 1986{From the Judgment and Order dated November 25, 1985 of the Madhya Pradesh High Court in Misc. Petition No. 551 of 1981}, decided on May 2, 1988
Advocates appeared
Dr N. M. Ghatate and S. V. Deshpande, Advocates, for the Petitioner;
Kuldip Singh, Additional Solicitor General (B. B. Ahuja and Miss A. Subashini, Advocates, with them), for the Respondents.
A.Subhashini, B.B.Ahuja, Kuldip Singh, N.M.GHATATE, S.V.DESHPANDEY
Headnote:
Constitution of India - Article 136 - Article 226 - Customs Act, 1962 - Section 111 - Section 105 - Section 110(2) - Section 124 (a) - Section 123 of – Section 123(1) - Conservation of Foreign Exchange and Prevention of Smuggling Activities Act. 1974 - Business of Cutlery - Registered Sale Deed - Petitioner along with his father and brothers migrated to India from Pakistan - It is stated that petitioner started business of cutlery in Indira Market Durg and has got this separate business from other two brothers - Petitioner further asserted that he was not also associated in any business with his cousin Hariram or business of his father - He stated that he lives separately from his brother and father - Petitioner purchased a piece of land for Rs 6250 from one Yeshwant Ram under registered sale deed in respect of plot bearing Khasra admeasuring about 182 sq. ft - Similarly his brothers had also purchased plot adjoining plot of petitioner - Petitioner stated that he was living in two temporary rooms constructed by his brother and petitioners plot was lying vacant - Whether a notice was given or not within a stipulated time for extension as contemplated under Section 110(2) is a question of fact – Held, This provision had been substituted by Act 36 of 1973 and would be applicable in instant case - Petitioner failed to discharge burden of proof of thrust on him by aforesaid section - Next question which was canvassed before High Court was that quantification of penalty was very high - High Court however, noted that liability was incurred by petitioner and Collector made order - Admittedly, for about ten years even after Collectors order imposing penalty, amount of penalty had not been paid by petitioner - Value of smuggled goods was Rs 87,455 even at that time - On that there is no dispute - Penalty permissible is up to five times value of goods - High Court noted that benefit derived by petitioner by non-payment of amount of Rs 2,00,000 at least for ten years is sufficient indication that penalty could not be treated as arbitrary - That of course, by itself in court opinion is not always a safe guide - But in facts and circumstances of this case, penalty was not heavy and High Court was right - It is true that this Court in Malhotra case had laid down that penalty could not be arbitrary and excessive - But in facts of this case, it was not so - As far as value of wrist-watches is Rs 87,455, it was not arbitrary because it was not denied even though it was so stated in show cause notice – Petition dismissed.
Judgment
SABYASACHI MUKHARJI, J.-This is a petition for leave to appeal under Article 136 of the Constitution of India directed against the judgment and order dated November 25, 1985 of the High Court of Madhya Pradesh at Jabalpur. The petitioner herein had challenged by a petition under Article 226 of the Constitution the order dated December 26, 1975 passed by the Collector of Central Excise, Nagpur, directing confiscation of 565 wrist-watches seized from the petitioners possession on May 12, 1973 under Section 111 of the Customs Act, 1962 (hereinafter called the Act) and the imposition of penalty of Rs 2,00,000 under Section 112 of the Act and as well as the order dated August 10, 1979 passed by the Central Board of Excise and Customs dismissing the petitioners appeal and thereafter the order dated January 8, 1981 passed by the Government of India dismissing the petitioners revision.
2. It appears that the petitioner along with his father and brothers migrated to India from Pakistan. It is stated that the petitioner started business of cutlery in Indira Market Durg and has got this separate business from other two brothers. The petitioner further asserted that he was not also associated in any business with his cousin Hariram or business of his father. He stated that he lives separately from his brother and father. In or about April 1966, the petitioner purchased a piece of land for Rs 6250 from one Yeshwant Ram under the registered sale deed in respect of the plot bearing Khasra No. 1167 admeasuring about 182 sq. ft. Similarly his brothers had also purchased plot adjoining the plot of the petitioner. Since 1973, the petitioner stated that he was living in two temporary rooms constructed by his brother and petitioners plot was lying vacant. On or about May 12, 1973 Superintendent of Central Excise Raipur issued search warrant under Section 105 of the Act authorising one L. B. Tiwari Inspector, Central Excise to search the residential premises of the petitioner. They searched the residential premises at Durg and it was alleged that the house belonged to the petitioner. On April 1, 1974. the petitioner was detained under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act. 1974 (hereinafter called COFEPOSA). On or about March 22, 1975. the petitioner while in jail received the letter issued by the Collector for the purpose of extension of six months time for the issuance of show cause notice under Section 110(2) of the Act under which the period was extended up to November 14, 1974. The petitioner alleged that this letter was never received by him. There is another order on or about January 5, 1976 passed by the Collector, Central Excise under which it was held that the petitioner had acquired the possession of the wrist-watches and these were smuggled goods and imposed a penalty of Rs 2,00,000.
3. The High Court noted the facts as below :
On May 12, 1973 in a search made of the petitioners bedroom at Durg, a total of 564 wrist-watches of foreign mark valued at Rs 87,455 were seized from a suitcase, a secret cavity in a locked steel almirah, and behind the almirah concealed in a bundle of waste paper from the petitioners possession during his presence. A panchnama was prepared at the same time mentioning these facts. The petitioner found himself unable to make any statement at that time on account of which recording of his statement was deferred. However, the petitioner went out of station on May 14, 1973. His statement was then recorded on May 30, 1973, as soon as he was available for this purpose. In his statement Annexure R-III duly signed by him, he admitted these facts and merely denied knowledge of the manner in which the watches came to be in his house. The petitioner was also given a notice to show cause why the period of six months fixed by Section 110(2) of the Customs Act should not be extended but no reply was given by him till November 10. 1973 or even thereafter, therefore, by an order da
