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1976 Supreme(Mad) 501
High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. KAILASAM & THE HONOURABLE MR. JUSTICE BALASUBRAHMANYAN
Assistant Collector of Customs, Madras - Appellant
Versus
Misrimal and Another - Respondent
Case No : Criminal Revn. Case No. 206 of 1976
Decided On : 20 September 1976
A criminal court cannot order the disposal of goods that have been confiscated under the Customs Act and vested in the Central Government. S. 517 of the Cr.P.C. does not empower the criminal court to make an order regarding the disposal of such goods.
Headnote:
CUSTOMS ACT - CONFISCATION OF GOODS - DISPOSAL OF CONFISCATED GOODS BY CRIMINAL COURT - S. 517, CR.P.C. - SCOPE AND EFFECT - CUSTOMS ACT, 1962, SS. 110, 111, 122, 124, 126, 127.
Fact of the Case:
The Customs Department seized 384 wrist watches of foreign make from the respondents' shop, believing they were illegally imported. Adjudication proceedings were initiated, and the Assistant Collector ordered confiscation of the watches. A criminal prosecution was also launched, but the Chief Metropolitan Magistrate acquitted the respondents, holding that the prosecution failed to prove the watches were smuggled goods. The Magistrate directed the Customs authorities to re-deposit the watches into Court for delivery to the second respondent. The Customs Department appealed, and the Principal Sessions Judge dismissed the appeal, relying on a previous decision. The case was referred to a Bench due to differing opinions among judges.
Finding of the Court:
The Court held that when goods are validly confiscated under the Customs Act, a criminal court cannot ignore the law and make an order regarding the disposal of the property. An order of confiscation can only be altered or set aside by authorities as contemplated under the Act. The Court further held that S. 517 of the Cr.P.C. does not empower the criminal court to make an order regarding the disposal of goods that have been confiscated under the Customs Act and vested in the Central Government.
Issues: 1. Whether a criminal court can order the disposal of goods that have been confiscated under the Customs Act and vested in the Central Government? 2. Whether S. 517 of the Cr.P.C. empowers the criminal court to make an order regarding the disposal of such goods?
Ratio Decidendi: 1. The Customs Act provides a comprehensive scheme for the seizure, confiscation, and disposal of goods that are illegally imported or exported. The Act empowers the Customs authorities to take adjudication proceedings and, after observing all the formalities, direct confiscation. Once an order of confiscation is made, the goods vest in the Central Government. 2. S. 517 of the Cr.P.C. empowers the criminal court to make an order for the disposal of property or documents produced before it or in its custody or regarding which any offence appears to have been committed or which has been used for the commission of any offence. However, this power is subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying, or otherwise dealing with such offences. 3. In the present case, the offence with which the respondents were charged was under S. 135(b) of the Customs Act. The procedure regulating the manner or place of investigating, inquiring into, trying, or otherwise dealing with the offence as prescribed under the Act has to be followed in preference to the procedure under the Code.
Final Decision: The Court allowed the criminal revision case preferred by the Assistant Collector of Customs and overruled the decision of Krishnaswamy Reddy, J. in Misrimal Hansraj v. Union of India.
KAILASAM, C.J.
This criminal revision case has been posted before us, as Natarajan, J. before whom the matter originally came up, found himself unable to agree with the decision of Krishnaswamy Reddy, J., in Misriml Hansraj v. Union of India (1974 Mad LW (Cri) 134 : 1975 CrLJ 1617).
2. The facts of the case are briefly as follows. A search was conducted in the shop of the respondents on 8-12-1969 by a Preventive Officer of the Customs Department, who seized 384 wrist watches of foreign make in the reasonable belief that they had not been licitly imported into this country. Adjudication proceedings were taken by the Customs Department and after due observance of all formalities the Assistant Collector on the first respondent and ordered confiscation of the wrist-watches.
3. In addition to the adjudication proceedings, a criminal prosecution was also launched. The Chief Metropolitan Magistrate, who tried the case, acquitted the respondents on the ground that the prosecution had failed to show that the wrist watches were smuggled goods liable to confiscation under S. 111 of the Customs Act, 1962. Following the decision in Misrimal Hansraj v. Union of India (1974 Mad LW (Cri) 134) : 1975 CrLJ 1617) the Magistrate held that the respondents were entitled to the return of the wrist watches and the Customs authorities who were in possession of the wrist watches were directed to re-deposit them into Court for effecting their delivery to the second respondent. The Customs Department preferred an appeal to the Principal Sessions Judge against that part of the trial Court's order which directed the re-deposit of the property. Relying on the decision of Krishnaswamy Reddy, J., above referred to, the Session Judge also dismissed the appeal. After an elaborate discussion of the various provision of the Customs Act and the decision of the various Courts, Natharajan, J., found himself unable to agree with the decision of Krishnaswamy Reddy, J., and considered it necessary that the matter should be placed before a Bench. That is how the matter has come up before us.
4. Chapter XIII of the Customs Act (Act 52 of 1962) deals with searches, seizure and arrest. The section that deals with the seizure of goods, documents and things is S. 110. S. 110(1) provides that, if the officer has reason to believe that nay goods are liable to confiscation under the Act he may seize such goods. Sub-sec. (2) of S. 110 requires that, where any goods are seized under sub-sec. (1) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized, S. 111 lists out the goods brought from a place outside India which are liable to confiscation. When a person improperly imports goods and renders such goods liable to confiscation under S. 111 or acquires possession or contravenes or does, any of the acts mentioned in S. 112(b), he shall be liable to penalty not exceeding five times the value of the goods or one thousand rupees whichever is the greater, and, in the case of dutiable goods, to penalty not exceeding five times the duty sought to be evaded. By an amendment, the penalty that may be imposed has been enhanced. Section 122 provides that, when any goods are liable to confiscation or any person is liable to penalty, such confiscation or penalty may be adjudged by the officers mentioned in the section S. 124 requires that a show-cause notice should be issued before an order of confiscations passed, Section 126 vests the goods that are confiscated under the Act in the Central Government. The officer adjudging confiscation shall take and hold possession of the confiscated goods. The award of confiscation or penalty under the Act by an officer shall not prevent the infliction of any punishment to which the person affected thereby is liable under the provisions of Chapter XVI of the Act or under any other law. (vide S. 127). Chapter XVI deals with prosecution
