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High Court Of Delhi
C.D.MINING AND EXPORT COMPANY PRIVATE LIMITED - Appellant
Versus
UNION OF INDIA - Respondent
L.P.A. 85 of 1978
Decided On : 05/22/1992
CUSTOMS ACT, 1962 - SECTION 130 - REVISION OF ORDERS - JURISDICTION OF COLLECTOR OF CUSTOMS - SCOPE OF ENQUIRY - CONFISCATION OF GOODS - GROUNDS - PENALTY - IMPOSITION - REDEMPTION FINE - LEVY - PRINCIPLES OF NATURAL JUSTICE - VIOLATION - IGNORING RELEVANT EVIDENCE - JUDICIAL REVIEW.
Fact of the Case:
The petitioner, M/s. Satyanarayana Khaitan Pvt. Ltd., imported goods described as stainless steel angles under two import licenses. The goods were cleared for home consumption after assessment under Section 63 (1) of the Indian Customs Tariff (ICT). Subsequently, the Collector of Customs issued a show cause notice proposing to set aside the order of clearance, confiscate the goods, and impose a fine and penalty. The petitioner challenged the Collector's jurisdiction and the legality of the proceedings.
Finding of the Court:
The Court held that the Collector of Customs had jurisdiction to review the order of clearance under Section 130 of the Customs Act, 1962, as the power of the Board of Review under Section 130 had been delegated to the Collector by the Central Government under Section 152 of the Act. The Court also held that the Collector could rely on an enquiry conducted subsequent to the clearance of the goods to satisfy himself about the legality or propriety of the order of clearance.
Issues: 1. Whether the Collector of Customs had jurisdiction to review the order of clearance under Section 130 of the Customs Act, 1962? 2. Whether the Collector could rely on an enquiry conducted subsequent to the clearance of the goods to satisfy himself about the legality or propriety of the order of clearance? 3. Whether the goods were liable to confiscation under Section 111 of the Customs Act, 1962? 4. Whether the petitioner was liable to penalty under Section 112 of the Customs Act, 1962? 5. Whether the redemption fine was properly levied under Section 125 of the Customs Act, 1962? 6. Whether the principles of natural justice were violated during the proceedings?
Ratio Decidendi: 1. The Court held that the Collector of Customs had jurisdiction to review the order of clearance under Section 130 of the Customs Act, 1962, as the power of the Board of Review under Section 130 had been delegated to the Collector by the Central Government under Section 152 of the Act. 2. The Court held that the Collector could rely on an enquiry conducted subsequent to the clearance of the goods to satisfy himself about the legality or propriety of the order of clearance. 3. The Court held that the goods were liable to confiscation under Section 111 of the Customs Act, 1962, as they were imported contrary to the prohibition imposed by the Act and did not correspond with the entry made in the bill of entry. 4. The Court held that the petitioner was liable to penalty under Section 112 of the Customs Act, 1962, as he had committed an act which rendered the goods liable to confiscation. 5. The Court held that the redemption fine was properly levied under Section 125 of the Customs Act, 1962, as the Collector had the option to give the petitioner an option to pay a fine in lieu of confiscation. 6. The Court held that the principles of natural justice were violated during the proceedings as the Collector declined the petitioner's request to inspect certain documents which were relevant to the case.
Final Decision: The Court allowed the appeal, set aside the order of the learned Single Judge, and quashed all proceedings emanating from the notice issued under Section 130 of the Customs Act by the Collector of Customs. The Court also held that the imported goods would remain assessed under Item 62 (2) ICT and no refund would be permissible to the petitioner on that ground.
( 1 ) THE petitioner is in appeal. Its petition filed under Article 226 of the Constitution was dismissed though partly by a learned Single Judge of this Court by judgment dated 9 August 1978. The petitioner had sought quashing of the order dated 18 May 1972 of the Government of India in the Ministry of Finance, Department of Revenue and Insurance, passed in revision under the provisions of the Customs Act, 1962 (for short the Act ).
( 2 ) WE will come to the sequence of the events a little later and would note the substantive part of the order of the Collector of which revision was filed before the Government of India. The Collector held that: (1) goods imported were classifiable as stainless steel sheets under Item 63 (20a) ICT; (2) the import licences originally produced for the clearance of the goods were thus not valid; (3) M/s. Satyanarayana Khaitan Pvt. Ltd. (original name of the appellant) deliberately misdeclared the goods to evade the duty and to pass the goods under the licences which were not valid. The goods were, thus, held liable to confiscation under Section 11 l (d) and also under Section 11 l (m) of the. Act, and further that the importers were liable to penalty under Section 112 of the Act for improper importation f the goods. Consequently, the Collector set aside the order of clearance made earlier by the customs authorities under Section 47 of the Act when the goods were assessed under Item 63 (2) ICT as stainless-steel angles as per bill of entry, and consequently the Collector ordered the confiscation of the goods (which had been seized after clearance) under Section lll (d)of the Act read with Section 3 (2) of the Imports and Exports Control Act, 1947 and the Import (Control) Order, 1955 as also under Section 11 l (m) of the Act. Option was, however, given to the owners under Section 125 of the Act to pay a fine of Rs. 21 lakhs in lieu of confiscation. Personal penalty of Rs. 4 lakhs was also imposed. The Collector also raised a demand of Rs. 6,13,741. 59 being the duty of customs short levied on the goods when they were classified under Item 63 (20a) and not under Item 63 (2) ICT.
( 3 ) BY its order the Government of India held that the goods which had been imported were liable to duty as strips under Entry 63 (14) ICT read with Notification No. 118 of 1962, but at the same time it was observed that differential duty could not be allowed to appellant as there was no claim made by it within the time limit of six months, and redemption fine of Rs. 10 lakhs was also levied on the appellant. The Government of India also remitted in full the personal penalty imposed by the Collector. In fact the revision had been partly allowed by the Government of India. The petitioner had claimed that the goods imported were stainless steel angles classifiable under Item 63 (2) ICT. Collector of Customs held the goods to be classifiable as stainless steel sheets under Item 63 (20a) ICT. This order by the Collector is dated 7 February 1971 and was made under Section 130 of the Act. It was against this order that a revision was filed under Section 131 of the Act on which impugned order dated 18 May 1972 was passed by the Government of India.
( 4 ) THE learned Single Judge directed refund of the difference in duty which had been collected as per order of the clearance at the rate of 27-1/2% ad valorem and that held by the Government of India at the rate of 10 % ad valorem. The redemption fine of Rs. 10 lakhs was quashed with liberty, however, to reimpose that fine in the light of the observations made in the judgment inasmuch as it was noticed that under the proviso to Section 125 of the Act such fine could not exceed the market rate of the goods on confiscation. The learned Single Judge did not agree with the appellant that there was no jurisdiction for confiscation when personal penalty had been remitted. He said that two provisions, Sections lll (d)and 112, were independent of each other and that the o
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