V.T. Raghavachari, Member (J)

1. M/s. Export Enterprises, of which Shri Hasmukh Dalpatrai Ganatra is the owner, had imported 992 takes of synthetic fabrics and cleared them under Bill of Entry No. 003415 dated 12-7-1982, the import being covered under 4 REP licences. Subsequently 79 takas were seized from the appellants, the ground being that they were out of the stock imported as aforesaid and that the provisions of Chapter IV-A of the Customs Act had been contravened in respect thereof. On adjudication the Additional Collector ordered absolute confiscation of the seized goods under Section 111(p) of the Customs Act and imposed personal penalty of Rs. 75,000.00 on Shri Ganaffa, Rs. 25,000.00 on M/s. Export Enterprises and certain penalties on others. An appeal was preferred to the West Regional Bench of the Tribunal against the said order by Shri Hasmukh Dalpatrai Ganatra and M/s. Export Enterprises. After hearing both sides two separate orders were passed by the Members of the West Regional Bench in which they had indicated the points on. which they were not in agreement. Thereupon papers were submitted by them to the President under Section 129-C(5) of the Customs Act. The President of the Tribunal under order dated 14-8-1986 constituted the present bench for hearing submissions on the points of difference arising under the orders of the Members of the West Regional Bench. The president had indicated that since the points of difference had been differently formulated by the two Learned Members of the West Regional Bench the Members of this Bench will formulate the points of difference on which submissions are to be heard.

2. Accordingly members of this Bench formulated the points of difference as follows :

(i) Whether, on the facts and in the circumstances of the case, the 79 takas in question were prohibited goods (for purposes of confiscation without option for redemption) as held by Shri Dilipsinhji, Member (T) or whether they were not prohibited goods as held by Shri Hegde, Member (3)?

(ii) Whether, on the facts and in the circumstances of the case, the levy of penalty of Rs. 75,000.00 under Section 112 of the Customs Act on Shri H.D. Ganatra was justified or Not?

(iii) Whether, on the facts and in the circumstances of the case, any penalty could be imposed on Shri H.D. Ganatra, under Section 117 of the Customs Act as has been done in the order of the Member (Judicial)?

3. Accordingly, after issue of notice to both sides, we have heard Shri S.P. Luthra, Advocate for the appellants and Shri K.C. Sachar for respondents.

4. The confiscation of the seized goods had been ordered under Section 111 of the Customs Act. Both Members of the West Regional Bench have held that the seized goods were liable for confiscation. Hence Shri Luthra himself does not question before us the correctness of the said conclusion. The confiscation has been ordered since no proper accounts as required to be kept under the provisions of Chapter IV-A of the Customs Act had been maintained in connection therewith. The confiscation was therefore under the provisions of Section 11(p) of the Customs Act. The question is whether in respect of such goods confiscation of which had been ordered under Section 111(p) of the Customs Act an order for penalty could be passed under Section 112 of the Customs Act or whether an order for penalty can only be under Section 117 of the Customs Act. This would again depend on the interpretation of the provisions of Section 112(i) of the Customs Act which refers to goods in respect of which any prohibition is in force.

5. Shri Luthra submits that the goods had been validly imported in terms of REP licences produced in that connection and therefore they were not prohibited goods and hence no penalty could be levied under Section 112 of the Customs Act even if the goods may be liable for confiscation under Section 111(p). On the other hand Shri Sachar contends that the word "prohibition" in Section 112(i) would not be restrict