1. This is an appeal filed against the order of the Collector of Customs, Calcutta, dated 14-8-1986.
3. On these dates we heard the submissions of the parties on the question of jurisdiction.
4. Both the sides submitted their respective versions of the case but the submissions were mainly confined to the question as to whether in view of the facts and circumstances of the case, the Calcutta Customs had the jurisdiction to take action under the law.
5. Both the sides also submitted their written briefs and referred to the action of Paradwip Customs as well as Calcutta Customs and cited various provisions of relevant Acts and case laws in support of their respective contentions.
The learned Counsels for the appellant submitted that Mrs. Ramnarain Biswanath, as Letter of Authority holder, imported 1514.790 metric tonnes of Seconed Grade G.P. Sheets/Coils amounting to Rs. 26,79,475.25 p. These goods were shipped from Japan on 31st January, 1985. The Appellant paid the full C. & F. value of the goods as also the insurance premium on .11-3-1985 and 18-2-1985 respectively.
6. The goods arrived at Paradwip Port during middle of March 1985 and the Appellant filed Bill of Entry for Home Consumption on 14-3-1985.
The proper officer Under Section 46 of the Customs Act, 1962, namely the Appraiser, Paradwip Customs, physically examined the goods and checked the declaration and assessed the duty payable in respect of the said goods. The assessment of duty was countersigned by the Assistant Collector of Customs, Paradwip. The Appellant thereafter paid the entire Customs duty as assessed by Paradwip Customs amounting to Rs. 50,13,034.21 p. on 21-3-1985. The Appellant also paid port charges of Paradwip Port Trust amounting to Rs. 91,620/- and Rs. 18,920/- for clearance of the goods.
7. Upon payment of the assessed Customs duty and the Port charges on or about 21-3-1985 the said goods were cleared for Home Consumption Under Section 47 oi the Customs Act, 1962. The Appellant thereafter brought the said goods by Railways to Shalimar Howrah. The goods arrived at Shalimar on 11-4-1985 and your Appellant paid a sum of Rs. 2,95,836/-towards freight and Octroi duty of Rs. 17,450/- for clearing the said goods from Railways.
8. Thereafter on llth April, 1985, when the Appellant wanted to take delivery of the goods against production of Railway receipts, the Railway authorities, Shalimar refused to give delivery of the goods, and on the following day, they informed the Appellant that the Calcutta Customs had issued instructions on them for stoppage of delivery of the goods to the Appellant. Subsequently it was contended on behalf of the Calcutta Customs that they had seized the said goods in exercise of powers Under Section 110 of the Customs Act, 1962. The validity of such seizure is under challenge.
9. Subsequently on or about 7-10-1985 Assistant Collector of Customs, Calcutta, issued a purported show cause notice Under Section 124 of the Customs Act, 1962, alleging that the said goods are liable to confiscation Under Sections 111(d) and 112 of the Customs Act, 1962, and asked the Appellant to show cause before the Collector of Customs, Calcutta. The Collector of Customs, Calcutta, thereafter held the adjudication proceedings and passed an order against which this appeal is preferred before this Hon'ble Tribunal.
10. On the basis of the aforesaid facts, it was contended on behalf of the Appellant, on the threshold, that the Calcutta Customs had no jurisdiction to issue a show cause notice Under Section 124 of the Customs Act or pass any adjudication order against the clearance made by the Paradwip Customs as per the procedure provided under the Customs Act, 1962 by the Appellant on the question of jurisdiction are as follows : (i) Once the Bill of Entry has been assessed in one Port, the Collector of Customs of another Port has no jurisdiction to initiate proceedings Under Section 124 of the Customs Act, 1962, and adjudicate upon the same goods once again.
(ii) In any event, Collector of Customs of either Port has no jurisdiction to issue show cause notice Under Section 124 of the Customs Act, 1962, and adjudicate in respect of goods which have been cleared for home consumption upon payment of assessed duty and all charges. The power of Collector of the port of import, if not satisfied with an assessment already made by an officer subordinate to him, is only to direct the matter to be referred to the Collector (Appeals) Under Section 129(d) of the Customs Act, 1962. Such power has to be exercised within a period of one year from the date of assessment of the Bill of Entry.
(iii) Unless the original assessment order passed Under Section 47 of the Customs Act, 1962 is set aside, even the Collector of the Port of import has no jurisdiction to issue show cause notice Under Section 124 of the Customs Act, or to reopen the assessment proceedings.
11. In support of the aforesaid contention, it was urged on behalf of the Appellant that the assessment of the Bill of Entry filed by the Appellant having been made by a "proper officer", the same remains valid until it is set aside. The expression "proper officer" has been referred to in the Customs Act at following places :Section 2, Sub-section 34 - The proper officer defined.Section 17 : Proper officer to examine the goods for assessment.Section 18 : Proper officer to make provisional assessment.Section 21 : Proper officer to satisfy to admit duty-free entry of certain goods.Section 26 : An application for a refund of duty to be moved to a proper officer.Section 28 : Power to give notice by a proper officer, in case the duty is short levied,Section 30 : Delivery of import manifest to the proper officer.Section 31 : No goods to be unloaded from the vessel until entry inwards granted bySection 32 : No imported goods to be unloaded until permitted by the proper officer.Section 33 : No goods to be loaded or unloaded at an approved place without permission of the proper officer.Section 34 : No goods to be loaded or unloaded without the supervision of the properSection 38 : Proper officer empowered to require production of documents andaskSection 39 : Export goods not to be allowed without order of the proper officer.Section 41 : Proper officer empowered to permit the amendment in the export manifest.Section 42 : No conveyance to leave the port without order of the proper officer.Section 45 : The custodians of the imported goods in the Customs area are required toSection 46 : Entry of goods to be filed with the proper officer.Section 47 : Clearance of goods for home consumption to be allowed by the properSection 48 : Proper officer empowered to extend the period of 45 days for clearanceSection 50 : Entry of goods for exportation to be filed with the proper officer.Section 51 : Proper officer to allow clearance of goods for exportation.Section 54 : Bill of transhipment to be presented to the proper officer.Section 59 : The proper officer empowered to accept a fresh Bond from the transfereeSection 60 : Proper officer may permit deposit of the goods in a warehouse withoutSection 63 : Proper officer empowered to permit to sell the warehoused goodsif rentSection 64 : The owner of the warehoused goods can deal with the goods with theSection 67 : Removal of goods from a warehouse to another with the permission of aSection 68(c): The order of clearance of warehoused goods to be effected with anSection 69 : Clearance of warehoused goods for export to be permitted with theSection 72 : The proper officer empowered to demand from the owner of the warehoused goods all charges payable.Section 77 : Owner of the baggage for clearance of his baggage to give a declarationSection 79 : The proper officer may release the baggage free of duty.Section 80 : The proper officer empowered to detain the prohibited article included inSection 83 : Postal authorities to present list containing the particulars of goodsSection 85 : Proper officer may permit the goods to be warehoused Without beingSection 86 : Proper officer may permit to transfer the goods to any vessel or aircraftSection 89 : Proper officer may determine the quantity of dutyfree export oftheSection 92 : The consignor of any coastal goods to present an entry to the properSection 93 : Master of a vessel not to permit loading of coastal goods Without beingSection 94 : Master of the Vessel to deliver all bills relating to the coastal goods toSection 95 : The proper officer to make entries at the each port of call by such vesselSection 97 : No coastal vessel to leave the port without written order from the properSection 100: Proper officer empowered to search suspected persons Entering or leaving India.Section 103: Power of proper officer to produce certain persons before the MagistrateSection 106: Proper officer empowered to stop and search conveyances.Section 110: Proper officer to issue notice Under Section 110 before seizureof 12. When the "proper officer", in the instant case the Appraiser and the Assistant Collector of Customs, Paradwip, were satisfied that the goods imported by the appellant were not prohibited goods and the importer had paid the import duty assessed thereon and all other charges payable under the Customs Act, 1962 and when they made an order permitting clearance of the goods for Home Consumption, the said assessment was final subject to review or revision by the appropriate authorities under the Customs Act, 1962. In the instant case, the said order of clearance was not set aside by review or revision and is still valid and binding. The Collector of Customs, Paradwip, of his own motion could have called for and examined the records of the assessment order passed by his subordinate officers and for the purpose of satisfying himself as to the legality or propriety of such order could have directed such subordinate officer to apply to the Collector (Appeals) for determination its propriety. The Collector of Customs, Calcutta, could not have exercised the said power in respect of the assessment made by the Appraiser and Assistant Collector of Customs, Paradwip.
13. In support of the aforesaid contention, reference was drawn to the decision of CEGAT(SRB) reported in 1986 (9) ECR 623.
14. The facts of the case were the goods being nut megs were imported and erroneously allowed clearance from the Madras Fort after 31-3-1984.
The Collector of Customs Madras treated the said clearance as unauthorised and vide his order dated 28-2-1985 the goods were confiscated and he imposed a penalty of Rs. 250,000/- and Rs. 70,000/- respectively. Held, Collector of Customs, Madras was wrong in adjudicating the matter without setting aside the earlier order passed by his subordinate officer being the adjudicating authority Under Section 47 and as such adjudicating the matter as an original adjudicating authority was illegal. He had the only course under the act open to refer the matter to the Collector Appeals Under Section 129D of the Customs Act, 1962 and on the above law point the appeal was allowed in favour of the Appellant.
15. Reliance was also placed on the decision of the Board reported in 1982 ELT 418 (M/s. Aleuin Tapes).
16. The above order was passed by Mr. 3. Dutta, the then member of the Central Board of Excise and Customs where in the 4th para, it has been clearly stated that "As the goods have been cleared under the Customs Act and the orders of clearance have not been set aside on the basis of review proceedings it was also not correct for the Collector to draw up separate proceedings ignoring those orders of assessment and clearance".
17. Reliance was also placed on the judgment of the Calcutta High Court reported in AIR 1985 Calcutta page 122 in the matter of Mangala Brothers v Collector of Customs and Ors.
18. Brief facts of the case :- Certain goods were imported covered under Import Licence issued under a particular licensing period. The goods though covered under valid licence arrived during the year when the goods were included in the canalised list. The then Collector accepted the import licence and allowed clearance of the goods. The importer due to shortage of finance could release a part of the consignment and a part was kept in the warehouse. When the importer wanted to clear the rest of the goods a new Collector took the charge and he refused to deliver the goods on the contention that the licence was not valid. Held, another Collector cannot revise the order of the earlier Collector. He had only right to refer the matter to the Hon'ble Tribunal Under Section 129D.19. In the said order the Hon'ble Justice Mr. Ajit Kumar Sengupta has observed in para 23 that "the view taken by the Board is that the goods are not liable to confiscation even if there is any violation of the import policy. It is for the Chief Controller of Imports and Exports to take appropriate decision in the matter". In para 21 the Hon'ble Justice has stated.
20. Hence it is submitted that the Board may examine the issue and pass suitable order Under Section 129D of the Customs Act, 1962 so that the case could be referred to CEGAT for fresh order. It is, therefore, evident that the Customs authorities did not release the part of the goods covered by the licence, which was accepted by the Collector of Customs on 27th December, 1982 following an Appellate Order of the Central Board of Excise and Customs, on the ground that the Collector of Customs was intending to prefer an appeal before the Tribunal against the said order. In my view such a course cannot be permitted.
The licence has already been accepted and clearance of part of the goods has already been allowed. There is no question of any further examination of the licence. The authorities concerned are bound by the order of the Collector of Customs unless the order is revised or set aside by the Appellate Tribunal. In this case no appeal has been preferred as yet. There was also a doubt in the mind of the authorities as to whether such an appeal to the Tribunal is barred by limitation or not. This fact will appear from the notes made in the relevant file.
21. It was also contended that the Customs authorities, Calcutta could not have proceeded on the basis that the importation of the goods in question was against, a forged licence. Even today the said licence has not been cancelled and remained valid. The import was issued by the licensing authority, namely the Joint Chief Controller of Imports and Exports, and it is that authority who can cancel the licence. In the instant case that authority has not done so. Reference was made to the case reported in AIR 1960 Supreme Court, page 415, and it was urged that there is a procedure prescribed for cancellation of an import licence and since no such procedure was adopted in the instant case no one can proceed on the basis that the licence was forged.
22. The attention of the Tribunal was also drawn to the definition of the express "imported goods" in Section 2(25) of the Customs Act, 1962.
The power to confiscate is confined to imported goods from an importer the attention of the Hon'ble Tribunat is also drawn to Section 2(26) which defines the word 'importer'. According to the said definition an importer is one in relation of any goods at any time between their importation and the time when they were cleared for home consumption.
After the clearance of the goods for home consumption by a competent Customs authority on 21st March, 1985, the goods in question ceased to be imported goods and the Appellant ceased to be an importer and consequently no show cause notice could have been issued in respect of the same goods Under Section 124 of the Customs Act. It was urged on behalf of the Appellant, relying on the decision of Robertson's case reported in 1948 (2) AIR 767, that one Department of the Government is bound by the act of another and relied upon by the Supreme Court in AIR SC page 1311 at para 25. The instant case is worse. The Customs authorities of Orissa and the Customs authorities of West Bengal belong to the same Department of the Government. It would be totally chaotic and unfair if the two authorities within the same Department start disputing each other's decision.
23. On behalf of the Customs, it was urged that since the goods were imported against a fake licence it remained smuggled goods, and since the Calcutta Customs had seized the goods, they had the jurisdiction to issue the show cause notice. The aforesaid contention is of no force.
The act of seizure cannot confer jurisdiction. The contention of the Department that even if the goods are cleared they can still be seized, cannot be correct because one cannot keep one's eyes shut to all that had happened in respect of the goods in question between their landing at the port of Paradwip and their seizure at Shalimar, Howrah.
24. Reliance was placed on the decision reported in AIR 1961 Cal. 616, AIR 1970 Cal. 134 and AIR 1975 Cal. 368 for the proposition that the mere fact that the goods have been released Under Section 47 of the Customs Act, 1962, is not a bar for their seizure Under Section 110 or the issuance of a show cause notice Under Section 124. In none of these cases, facts are identical or similar to the instant case. In none of those cases the goods have been released by the one Customs authority and the seizure and/or show cause notice were issued by another Customs authority. If such procedure is permitted, then it would create considerable confusion in a country like India where there are a number of states and imported goods may pass through various territories under the jurisdiction of different Collectors of Customs. One may release the goods as validly imported while another may form a belief that they are not validly imported and liable to confiscation and seize the same and then issue a show cause notice in respect thereof. No authority could have been cited on behalf of the Customs to show that when one authority had cleared a consignment another authority may consider the said goods as illegally cleared and confiscate the same. Reliance was placed by the Customs Department on a decision reported in 1980 ELT 442. It was a case of Excise duty and not Customs. In that case, the goods were manufactured in Surat but the seizure took place in Bombay, but the officer exercising the power in Bombay was specially empowered.
In the instant case, the Collector of Customs, Calcutta was not specially empowered to seize the goods and consequently the aforesaid judgment can be of no assistance to the Customs.
25. The Customs authorities for the purpose of showing the jurisdiction of Calcutta Customs, relied in a Departmental adjudication manual. The administration instructions do no have any force of law. It appears that such administrative instructions were issued by the Directorate of Inspection. They did not obviously have any force of law, nor are they based on law. It was not issued on the basis of any power given by a statute. The said circular or instruction cannot confer jurisdiction on an officer who did not have the jurisdiction in law. Chapters II and III of the Customs Act, 1962, define the Customs officers and their scope and jurisdiction. The administrative instructions conferring power on officers must stem from Chapters II and III of Customs Act, 1962. The Departmental instructions which were produced by the Customs Department were, however, by the Directorate of Inspection and not under Chapters II and III of the Customs Act. Consequently it cannot have any force of law. It can at best show the mind of the Department as how they intended to exercise their powers but when challenged in Court or Tribunal the same cannot come to the rescue of an officer when in fact he is acting beyond the jurisdiction conferred upon him by statute.
26. As an alternative it was urged on behalf of the Customs that there is no express bar in the Customs Act restraining the Calcutta Customs from exercising the power of seizure of the goods which had been cleared by Paradwip Customs. It is respectfully submitted that such submission is entirely without any substance. The power has to be specifically conferred. Just because there is no express bar, therefore, to contend that there is power is absolutely without any substance. The Collector is a creature of the Statute and his powers are circumscribed by the Statute and/or rules made under the Customs Act. The Collector has to prove that he has power under the Act or the Rules. The absence of power does not give the Collector freedom to act as he likes because that would be arbitrary interference with the fundamental right of the citizen specially under Articles 19 and 3000A of the Constitution and as such is void.
27. It was alternatively submitted that offence had been committed at Calcutta, namely that the smuggled goods had been found in Calcutta.
Whether the goods were smuggled or not had not yet been found out and the Collector of Customs, Calcutta could not have proceeded on the basis that the goods were smuggled and exercise the power on that basis. The cause of action, if any was obtaining clearance of the goods against a fake licence from Paradwip Customs. Such cause of action has arisen clearly in Bhubaneswar in Orissa. No part of it has arisen at Calcutta. It was contended on behalf of the Customs that cause of action arises where the offence was detected. It is absurd to contend that when the goods were cleared by misleading a Customs officer, the offence was not committed, but the offence was committed when the Customs authorities, Calcutta could detect such offence. Such submission goes against the very concept of cause of action or rule or law.
28. It has been urged on behalf of the Appellant that even assuming that the goods have been imported by making a fraudulent representation, that only rendered the act voidable and not void. As such the goods imported in Paradwip Port by making false representation, even if true, does not ipso facto render the said goods smuggled nor do they become liable to confiscation.
29. To show why the Calcutta Customs had jurisdiction the Department referred to 2 letters of Collector of Customs, Orissa, addressed to the Collector of Customs, Calcutta. It is elementary that jurisdiction cannot be conferred by mutual consent. If the Collector of Customs, Calcutta had no jurisdiction, the Collector of Customs, Bhubaneswar, cannot by writing such letters confer jurisdiction on Collector of Customs, Calcutta. It is noteworthy that Bhubaneswar/Paradwip Collector of Customs was throughout aware of the seizure of the goods by the Calcutta Customs and the contention of the Calcutta Customs that the goods in question were imported under the Customs Act, 1962. As yet they have not taken any action in the matter. The Collector of Customs, Bhubaneswar, had not even caused the matter to be referred to the Collector (Appeals).
30. Thus, the show cause notice issued by the Calcutta Customs in respect of importations made in Bhubaneswar and clearance given by Bhubaneswar Customs, is wholly without jurisdiction, and the order of the Collector of Customs, Calcutta, is a nullity and should be set aside.
31. Since arguments were advanced at the very threshold only on the question of Jurisdiction, no submission has been made in this note on facts.
32. We have seen the written submission of the respondent. In the name of short summary the respondent has included many things on facts as well as law which were not uttered before the Tribunal.
33. The focal point of arguments made on behalf of the Appellant was based on Section 129D which was introduced by the Finance Bill of 1980.
The decision of AIR 1967 Bombay 138 and AIR 1961 Calcutta 616, AIR 1937 PC 114, AIR 1975 Cal. 368, AIR 1970 Cal. 134, AIR 1980 Calcutta 188, AIR 1976 Cal. 21 were decided on facts and law existing prior to amendment of 1980 and as such they are irrelevant.
AIR 1937 PC 114 deals with principles of estoppel and statutory duty.
Such points do not arise in this case.
AIR 1962 SC 1559 has no application to the preliminary point raised herein on the basis of Section 129D and other connected section.
1983 (13) ELT 1360 does not apply because in the present case the Appellant imported the goods against a licence and the goods were cleared by a proper officer of Paradwip Port upon assessment and payment of duty.
(1961) 3 AER 1169 is wholly inapplicable in the facts and circumstances of the case.
AIR 1982 SC 686 also has no relevance whatsoever. The import in the present case was by a L.A. holder against an REP licence. This licence could have been substituted by another valid licence if Collector of Paradwip wanted it before the clearance of the goods.
34. It is not understood why Section 178 of Cr.P.C. has been referred.
It appears that this section is wholly irrelevant and the point in issue raised at the threshold as a preliminary issue.
35. The learned Counsels on behalf of the respondent submitted that the above appeal is directed against the order dated 14-8-1986 passed by the Collector of Customs, Calcutta in the adjudication proceeding arising out of the show cause notice dated 7-10-1985 issued by the Assistant Collector of Customs, Special Investigation Branch, Custom House, Calcutta.
36. The learned Counsel appearing on behalf of the appellant has admitted that the adjudication proceeding initiated by the Assistant Collector of Customs, Calcutta and the adjudication order passed thereon by the Collector of Customs, Calcutta are void ab initio inasmuch as neither the Assistant Collector nor the Collector has in the admitted facts of the instant case any jurisdiction either to initiate the proceedings or to pass the adjudication order impugned in the appeal.
37. His further contention is that by the said order the Collector has confiscated the goods and has also imposed a personal penalty on the appellant who has imported the goods as holder of Letter of Authority of the licence holder. The vessel carrying the said goods discharged the cargo at Paradwip Port within the territorial jurisdiction of the Collector of Customs and Central Excise, Bhubaneswar and the Assistant Collector, Paradwip after examination of the papers and documents placed before him as well as the examination of the goods has passed the necessary order of clearance Under Section 47 of the Customs Act on being satisfied that the goods entered for home consumption are not prohibited goods and the importer has paid the import duty as well as charges payable under the Act. Thereafter the goods when arrived at the Shalimar Yard in Howarh were seized by the Customs officers attached to the office of the Collector of Customs, Calcutta and a show cause notice Under Section 124 was issued under the Customs Act by the office of the Collector of Customs, Calcutta, which has resulted in the said adjudication order impugned in the appeal.
38. The Collector of Customs, Calcutta or any of his subordinate officer has no jurisdiction to sit on appeal over the order passed by the Assistant Collector, Paradwip. The Collector of Customs, Bhubaneswar under whose jurisdiction the said Assistant Collector, Paradwip discharges his function could have in an appropriate Case initiated proceedings under Sub-section 2 of Section 129D if he had any doubt as to the legality or validity of the order of clearance passed by the Assistant Collector, Paradwip Under Section 47 of the Act. The learned Counsel has also relied on certain decisions which would be discussed at a letter stage.
39. The submissions made on behalf of the respondent Collector of Customs, Calcutta, in reply to the above preliminary objection in regard to jurisdictional issues are briefly as follows : (i) The allegation in regard to jurisdiction of the Collector of Customs, Calcutta to initiate adjudication proceeding or pass any order thereon is that of an initial lack of jurisdiction. It has been laid down by the Supreme Court in the case of East India Commercial Co. v. Collector of Customs reported in AIR 1962 SC, P.1893 at 1903, para 27 and Head Note 'B' that the notice of show cause initiating adjudication proceedings and the order passed thereon can be challenged on the ground of lack of jurisdiction only if on reading of the said notice, "it is manifest that on the assumption that the facts alleged or allegations made therein were true, none of the conditions laid down in the specified sections was contravened". In other words, a show cause notice or an adjudication order on the ground of lack of jurisdiction can be only challenged if it can substantiated that the allegations made in the show cause notice even if are taken to be true do not empower the Collector either to initiate adjudication proceedings or to pass any order thereon. We rely also on the full Bench judgment of the Calcutta High Court in the case reported in AIR 1980 Calcutta, P. 188, paras 33, 34 and 35.
This Hon'ble Tribunal at this stage as held by the Full Bench of the Calcutta High Court is not concerned with the correctness or otherwise of the allegations but has to see whether the goods, if the allegations are taken to be true, are smuggled goods and/or liable to be confiscated Under Section 111 of the Customs Act.
(ii) The substance of the allegations as made in the show cause notice as well as in the adjudication order briefly are that the appellant has brought in the foreign goods into India as an alleged Letter of Authority holder of two licences which are a forged or fake one for the following reasons :- (i) The two licences under which the goods have been imported were originally Transferable BEP licences viz. (a) Licence No. P/L/3012677/C, issued by the JCCI, Cochin in favour of Baby Marine Exports, Quilon for importation of OTS containers only and (b) import licence No. P/L/3013046/C issued by the JCCI, Cochin covering importation of OTS containers only in favour of M/s. Synthetic Industrial Chemicals (P) Ltd., Kerala.
(ii) The goods imported by the appellant were not OTS containers and also not on the basis of Letter of Authority issued by the original licence holder.
(iii) The original REP Transferable licences have been allegedly shown to have been transferred in favour of M/s. Agrico Industries Ltd. and converted into as New Non-transferable licence with authority to import canalised items appearing in the list annexed to the said licence with Actual Users condition i.e. the importer will utilise the said goods in its own factory and reexport the manufactured products within 18 months from the date of utilisation under the seal (security and rubber stamp) and signature of the Joint Controller of Imports and Exports, Shillong. The address of M/s. Agrico Industries as appearing in the licence is G.S. Road, Garikhana, Shillong. The seal and signature of the Controller appears to have been allegedly shown for approving the transfer of the licence, conversion of the licence from Transferable to Non-transferable, issuance of new licence/permission for importation of canalised items in place of OTS containers as per the said list attached and also in the list attached to the licence.
(iv) The appellant has purportedly imported the goods on the basis of alleged Letter of Authority which has been allegedly issued by the said M/s. Agrico Industries and attested by the New Bank of India, Shambazar Branch.
(b) The address of M/s, Agrico Industries given in the licence is a fictitious address.
(c) The Calcutta address and office -of the said M/s. Agrico Industries introduced to New Bank of India is also fictitious.
(d) All the endorsements as allegedly appearing in the licence of the Controller of Exports and Imports viz. security seal and rubber stamp and signature authorising transfer of the licence from the original holder to M/s. Agrico Industries, coversion of the licence from Transferable to Non-transferable, granting new licence/permission to import canalised items under Actual Users condition instead of OTS Containers are forged and fake.
(e) The firm being a non-existent firm the alleged letter of authority is also a non-existent one.
40A. If the above allegations are taken to be correct, the imported goods are smuggled goods as the same have been brought into India without any licence and such importation is illegal being violative of the provisions of Section 3 of the Import Control Act read with Section 3(i) of the Import Control order and Section 111(d) of he Customs Act and the goods become 'offending goods' and are liable to be confiscated.
41. It is now well settled by Courts of law that if any foreign goods are imported into India illegally or in violation of any of the provisions of Section 111 the goods become smuggled offending goods and are liable to be seized on the reasonable belief that the goods are liable to be confiscated, Under Section 110 of the Customs Act and the Customs authorities have the jurisdiction to confiscate the goods as well as to impose penalty on the person or persons who have taken active part in the importation of such prohibited or offending goods.
42. The scheme of the Customs Act, 1962 read as a whole makes it clear that statutes cast a mandatory duty on the officers of the Customs not only to realise Customs duty in the manner provided under the Act and the Tariff but. also to stop and take action against smuggling activities. The statute has conferred wide powers on the officers of Customs in view of rampant smuggling activities which has a perilous effect on the national economy endangering the security of the State.
43. Section 110 of the Act empowers a proper officer to seize any goods if he has reasons to believe that such goods are liable for confiscation i.e. imported in violation of any of the provisions of Section 111. In the instant case the goods have been seized by the proper officer attached to the Calcutta Customs while the goods were lying within the jurisdiction on the reasonable belief that the goods have been imported into India in violation of Section 1 1 l(d) of the Customs Act. On proper reading of the said section it is manifestly clear that there is no fetter or limitation on the power of seizure of any goods lying within his territorial jurisdiction provided that he has reasons to believe that the goods have been improperly imported.
There is no challenge in the instant case that the Assistant Collector who has seized the goods had no reasons to believe that the goods have been improperly imported. The subject goods have been seized on 11-4-1985 and the show cause notice puts on record the facts and circumstances including the investigation, enquiry on the basis whereof the officers attached to the Collector of Customs were prima facie satisfied that the goods imported under the alleged licence issued by the Collector of Exports and Imports, Shillong, in the name of M/s.
Agrico Industries are illegally imported' as the said M/s. Agrico Industries is a non-existent firm and the licences were fake or forged licences. Even Sri Sushil Keyam the partner of the appellant was examined on 29-3-1985 Under Section 108 who had admitted that he had already surrendered on such purported licence.
44. The Division Bench of Bombay and Calcutta High Courts have clearly held that the mere fact that the goods have crossed the Customs barrier is no bar to exercise the power of seizure Under Section 110. The Hon'ble Division Bench of Bombay High Court in he case reported in AIR 1967, Bombay, P.138 at 141, para 9 (last six lines) has held that "Section 110 does not place any limitation as to the person from whose possession or the time and the place at which the goods believed to be liable for confiscation can be seized. If there is reasonable ground to believe that the goods are liable for confiscation, they can be seized from any person who has custody of them even if he has obtained such custody unlawfully".
45. Whether Order Under Section 47 is no bar for seizure of the goods Under Section 110 or initiate adjudication proceedings for confiscation and personal penalty.
(i) The order of release Under Section 47 is no bar either of exercising the power of seizure or initiating proceedings by issuance of show cause notice Under Section 124 is now well settled by four decisions of the Calcutta High Court.
(ii) In the case reported in AIR 1961 Calcutta, P.616 it was, inter alia, contended on behalf of the importer that once an order Under Section 89 (equivalent to Section 47) is passed and goods are cleared there is no jurisdiction of the Customs authorities to proceed Under Section 167(8) of the Act, (para 3 of the judgment).
The Learned Judge rejected the contention by placing reliance on a judgment of the privy council reported in 1937 PC, P.114 and held that the Sea Customs Act, 1878 has been enacted for benefit of the public and on the ground of public policy. If an offence has been committed under the Act there is no estoppel on the part of the Sea Customs authorities from taking action under the Act even though the goods might have passed the Customs barrier and order has been made Under Section 89 of the Customs Act. [See paras 3, 4, 5 of the Judgment].
(iii) This judgment has been referred to with approval by the Division Bench of the Calcutta High Court in the case reported in AIR 1975 Calcutta, P.368 at paras 63 and 64. In that case it was contended that where an order Under Section 47 has passed, the only course open is by way of review Under Section 130 of the Customs Act [now Section 129(d)]. The Division Bench expressly rejected the said contention and held that it was the duty of the importer to obey the law. If the allegations of the Customs authorities be correct they had no right to import the goods without valid licence. They should not be allowed to say that because of the order Under Section 47 steps cannot be taken against them under the other provisions of the Customs Act (paras 54, 64, 65 and 66).
(iv) The next case on which reliance has been placed is AIR 1970 Calcutta, P.134 (Sheikh Md. Sayeed v. Assistant Collector of Customs). This is directly an authority for the proposition that if the goods have been imported on the basis of forged or fake licence then there is no licence and order of clearance is no bar for initiation adjudication proceedings (para 36). This case has been referred to with approval in the Full Bench decision of the Calcutta High Court reported in AIR 1980 Calcutta P.188 at para 22 wherefrom it appears that the said Single Bench judgment has been approved by the Division Bench in Appeal No. 122 of 1969 (Sheikh Md. Sayeed v. Assistant Collector of Customs).
46. There are similar cases in case of illegal export where the Court has been pleased to hold that order of clearance Under Section 51 is no bar for initiation of adjudication proceedings : 47. Why officers of Customs, Calcutta have jurisdiction to initiate proceedings and pass adjudication order : (i) Smuggled goods are offending goods and are liable for confiscation Under Section 111 of the Act. This is a mandatory provision, as the word is 'shall'. This liability for confiscation is attached to the goods and is carried wherever the goods goes. In fact, this liability for confiscation in case of goods imported on fake or forged licence accrues from the point of 'attempt to import' and it is a continuing liability and continuous till the seizure of the goods resulting in ultimate confiscation. This would be clear from Section 111(d) itself which reads as follows : The following goods brought from a place outside India shall be liable to confiscation : (d) Any goods which are imported or attempted to be imported or are brought within Indian Customs water for the purpose of being imported, contrary to the prohibition imposed by or under this Act or any other law for the time being in force." 48. In the instant case attempt to import the goods was made from Calcutta by the appellant by doing the following acts : (i) (a) Orders of importation of the canalised goods on the basis of the alleged Letter of Authority were placed from Calcutta; (b) Sight draft against presentation of documents for importation of the goods at Calcutta through the Federal Bank, Calcutta. The documents were retired from the Federal Bank, Calcutta for the purpose of taking release of the offending goods.
(ii) The goods were seized on the reasonable belief that the goods are smuggled goods and are liable for confiscation at Shalimar Yard, Howrah within the jurisdiction of Calcutta Customs.
(iii) The importer has also their offices in Calcutta and the activities of illegal importation were entered at Calcutta.
In the premises as above the offence Under Section 111(d) making the goods liable to confiscation and making the persons who have taken active part in such attempt or actual importation has accrued from that stage and is a continuing one.
(iv) Section 5 of the Customs Act empowers the officers of Customs to exercise the powers and discharge the duties conferred or imposed on them under the Act without any limitation subject only to such condition or limitation as the Board may impose. The power of seizure as already submitted is without any limitation as to the place and time, wherever at any point of time the offending goods are found those may be seized (may in the context would mean "shall" as a duty is cast). The important words are "an officer of Customs" i.e. in the context of the facts of the case any officer of Customs wherever he may be posted has the power to seize and confiscate the offending goods in absence of any limitation imposed by the Board. It is submitted that the jurisdiction conferred under the Act is a concurrent jurisdiction to initiate proceedings and the officer having territorial jurisdiction over the place where the attempt to import was made or actual importation was done or the goods were seized on a reasonable belief that the goods are smuggled goods are liable to confiscation.
(v) This would also be clear from Section 122(a) of the Customs Act - where the word used is 'a Collector" - meaning thereby any Collector Under whose jurisdiction cause of action partly or wholly has arisen or offences have been partly or wholly committed.
(vi) We may draw an analysis from Section 178 of the Criminal Procedure Code where it is clearly stated that : 178(a) When it is uncertain in which of several local areas an offence was committed, or (b) where an offence is committed partly in one local area and partly in another, or (c) where an offence is a continuing one, and continues to be committed in more local areas than one, or (d) where it consists of several acts done in different local areas, it may be inquired into or tried by a Court having jurisdiction over any of such local areas.
49. Why the Collector of Customs, Calcutta is the appropriate authority to adjudicate in the context of the facts of this case? (i) In case of offending goods, there are two fold liabilities viz: (a) goods are confiscated and (b) persons involved in illegal importation are liable to penalty.
(ii) The goods have been seized in Calcutta under the territorial jurisdiction of the Collector of Customs, Calcutta. He is the only authority under whose possession the goods were lying on seizure.
The goods cannot be a confiscated unless the goods remain within the possession of the adjudicating officer or are available within his territorial jurisdiction.
(iii) Section 110 clearly lays down that the power to retain possession continues only if a show cause notice is issued within six months from the date of seizure. If such a notice is not issued the goods are to be returned and possession is lost and thereafter, the goods cannot be confiscated. This provision makes clear that the Collector seizing the offending goods is to initiate adjudication proceedings by issuing notice so as to continue to retain possession so that the goods may be ultimately confiscated if the charges are substantiated.
(iv) Although the return of the goods is not bar for issuing the show cause notice Under Section 124 which would result only in notional confiscation and personal penalty on the person who has taken active part in the illegal importation and not actual confiscation as the goods would not be available.
50. The goods have already moved outside the territorial jurisdiction of the Collector of Customs Bhubaneswar and as such he cannot take possession of seize the goods which are lying in the jurisdiction of another Collector. The adjudication proceeding, if he initiates, will only result in imposition of personal penalty and notional confiscation; whereas the Collector under whose possession the offending goods are lying can only confiscate the goods if it is substantiated that the goods are offending goods because by issuing show cause notice Under Section 124 he continues retention of the goods. This is the inbuilt scheme of the Act.
51. There is no limitation imposed by the Act to exercise the power and discharge the duties conferred or imposed on the Collector of Customs under the Act, save and except that such power has to be exercised subject to such conditions of limitation as the Board may impose. Such conditions of limitation may also be imposed by administrative instruction. Where the Act provides such conditions of limitations is be imposed by a notification, there is express provisions for that. On the other hand the Board by administrative instruction has laid down the Collector under whose jurisdiction the offending goods are seized will adjudicate the matter (See Adjudication Manual). The Division Bench of Calcutta High Court in the case reported in 1977 Cr. Law Journal P.1303, has been pleased to hold that adjudication Manual can be looked into the matter of excise or of power by an officer in a breach of any law to such exercise of power under the statutes.
52. In the following decisions the Hon'ble Supreme Court has upheld the adjudication order passed by an officer under whose jurisdiction the goods have been seized although the offending goods have been brought from the jurisdiction of another Collector A.I.R. 1962 SC 1359.
53. The cases referred to by Mr. Sen has no application. The only case referred to by Mr. Sen is Ajoy Exports and Anr. v. Collector of Customs, Madras reported in 1986 (26) ELT 873.
54. This case has no application whatsoever. In that case it has been held that an order passed Under Section 47 of the Act is an order of adjuJication which can be reviewed or revised Under Section 129(d). The Learned Tribunal relied on the decision of Jain Sudh Vanaspathi Ltd. and Anr. v. Union of India and Others reported in 1982, a Division Bench Judgment of Delhi High Court, where the Hon'ble Court in para 10 of the judgment held that the order Under Section 47 reaches the finality to the satisfaction of the officer that the goods are not prohibited. The finality cannot be disturbed unless the Department successfully shows that there is fraud or deliberate suppression. It is to be noted that in the case of a fraud there is existence of a licence by the competent authority but the allegation is though the same has been obtained by fraud; whereas in the instant case the allegation is that the licence is a forged or fake licence and as such no licence at all. The importer has no right to import the goods as the licence is a non-est.
55. Is the appellant permitted to raise a question of jurisdiction in this appeal? As submitted already if the allegations are taken to be correct the appellant has no right to import the goods and such right is a nullity or non-est, as held by Lord Denning in the case of Maefoy v. United Africa Co. Ltd. reported in 1961 (3) ALL. E.R, 1169. If the act is void, then it is in law a nullity. It is not only bad, but incurably bad. There is no need of the Court to set it aside. It is automatically null and void without more ado though it is sometimes convenient to have the court declare it to be so. And every proceeding which is founded on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse. (a) page 1172. If the action is a nullity that is void ab initio.
56. Similar view has been taken by the Supreme Court in the case of AIR 1982 SC P.686 in regard to the effect of non-est.
57. We have gone through these submissions, both oral and written and as agreed to by both the parties, we are confining ourselves to the question of jurisdiction at this stage as this is a basic threshold question.
58. We observe that in the normal course an Act is required to be read as a whole and while applying its various provisions the doctrine of harmonious construction is required to be borne in mind.
59. With this principle in view when we address ourselves to the question of jurisdiction, we find that insofar as the Customs Act is concerned the jurisdiction in respect of any action which is proposed to be taken or has been taken is required to be determined with reference to the operative/functional section(s) read with Section 2 and/or Sections 4 and 5 or other relevant sections. Thus for example :Purpose Definition Territory & Power Function & authority.Clearance Section 2(34) Sections 4 & 5 47Seizure Section 2(34) Sections 4 & 5 110Adjudication Section 2(1) Sections 4 & 5 122 60. In other words, the jurisdiction under the Customs Act is terri-torial-cum-functional jurisdiction. That is to say the jurisdiction is vested in the authorities appointed Under Section 4 for the territories notified therein and we have to look at Section 2 for definitions, Section 5 for checking whether any conditions/limitations have been imposed on their powers and the relevant operational or functional section(s) for seeing how these powers are required to be exercised i.e. in what manner and subject to what limitation(s) and coridition(s) etc. (These are merely illustrations and other relevant sections may have to be seen wherever necessary).
61. In view of this position when we examine the present case we find that the goods were imported at Paradip Port and were allowed clearance Under Section 47 by the proper officer of Paradip Customs. This is in fact the position undisputed by both the parties both in respect of the fact and the law.
62. In other words, in terms of Section 47, after the proper officer of Paradip Customs had satisfied himself that the goods were not prohibited goods and the importer had paid the import duty, he had passed an order permitting clearance of the goods for home consumption.
63. Thereafter, the goods were taken out of Customs charge and when they arrived at Shalimar Yard (Howrah) which admittedly falls within the territorial jurisdiction of the Collector of Customs, Calcutta, an order Under Section 110 was issued by an officer of the Calcutta Customs and was said to be served first on the railway authorities and then by pasting the order on the main door of room No. 5 of 7, Lyons Range, Calcutta.
64. A question has, therefore, arisen whether the officers of Calcutta Customs were competent to do so? In this respect when we look at Section 110 and read it with Sections 2(34), 4 and 5, we find that the Calcutta Customs have the jurisdiction to detain or seize any goods, documents and things within their territorial jurisdiction, if the proper officer(s) of Calcutta Customs had reason to believe that any goods were liable to confiscation under the Act. Therefore, it was open to the respondents to show that the goods in question had been seized by the proper officer(s) of Calcutta Customs on account of their reasons to believe that they were liable to confiscation. In other words, we consider that a Collector of Customs (and the proper officers working under him) had the jurisdiction to take action Under Section 110 of the Customs Act in respect of any goods liable to confiscation found within his territorial jurisdiction at any time irrespective of the place of importation of goods. Of course, in such a situation, it will be the resposibility of the Customs to show that a valid and proper seizure had made in terms of Section 110.
65. In the instant case the learned Counsel for the respondent has claimed and indeed asserted that by virtue of the action Under Section 110 which he calls 'seizure', the jurisdiction to adjudicate the case vested in the Collector of Customs, Calcutta, in terms of the instructions contained in the Adjudication Manual. However, we notice that the learned advocate for the respondent has not produced any document(s) before us to show that a seizure was actually effected Under Section 110.
66. The learned Counsel for the respondent has, of course, laid a lot of emphasis on the 'reason to believe' on the part of the proper officer(s) but it is really interesting to note that neither the so-called order Under Section 110 has been produced nor any Panchnama has been produced nor the date and time and other particulars of seizure, if any, have been indicated. Not only that, we notice from the show cause notice and the order-in-original (vide para 2.1) that the words used are "...In the circumstances, there was strong reason to suspect that the goods in question cleared at Paradwip... being imported unauthorisedly".
67. And as per para 2.2, "on 11-4-1985, 26 wagons containing 282 coils of the aforesaid goods arrived at the Shalimar Railway Yard. As there was reason to believe that the goods were liable to confiscation the notice Under Section 110 of the Customs Act, 1962 was served upon the railway authorities who were the custodians of the goods at that time requesting them not to remove/part with or otherwise deal with the goods except with the previous permission of the proper officer...." It was found that the address of M/s. Ramnarain Bishwanath, the imports of the subject goods as per their declaration, was 7, Lyons Range, Calcutta. The Officers of the Special Investigation Branch visited the said office to serve a copy of the prohibitory order Under Section 110(1) of the Customs Act, 1962. When the officers of the Special Investigation Branch visited room No. 5 of 7, Lyons Range, Calcutta to serve the prohibitory notice Under Section 110(1) of the Customs Act, 1962, staff of the room No. 5 refused to accept the prohibitory notice on the plea that Shri Sushil Kumar Kayan was out of station. In the circumstances, the Special Investigation Officer finding no other alternative affixed the aforesaid prohibitory notice on the main door of room No. 5 of 7, Lyons Range, Calcutta. The language describing the contents of the notice is important. It shows that the notice served on the railways was only a detention notice.
68. Similarly, the notice said to have been served on M/s. Ramnarain Biswanath by affixing it on the main door of room No. 5 was also only a prohibitory notice - as per the language of show cause notice and the order-in-original quoted above.
69. The learned Counsel for the respondent has laid a lot of emphasis on the departmental instructions as contained in the Adjudication Manual but he has not drawn our attention to the instructions contained in other manuals. One such manual is Central Appraising Manual. In the Calcutta supplement of this manual (1st Edition page 292) the following appears : "11.(a) Detention, Seizure & Storage of seized goods. Interpretation regarding "Detention" and "Seizure" of goods under Customs Act.
In ordinary parlance, there is a distinction between 'detain' and 'seize': 'detain' means 'to keep back, withhold; especially to keep back what is due or claimed. " 'Seize' means 'to be in possession of take possession of goods in pursuance or an order; to take possession of by force. (The Oxford English Dictionary)". 'Seizure' is not equivalent to 'detention', as the latter word involves the idea of keeping what has been seized." In other words, as per this manual the respondent organisation distinguishes between 'detention' and 'seizure' made under the Customs Act.
70. In view of the words 'reason to suspect' appearing in show cause notice and the order-in-original and the language describing the order in para 2(2) thereof, we have reason to believe that the order served on the railways and pasted on the door of room No. 5 of 7, Lyons Range was only a detention order. In this connection we have checked up the proformas which are commonly used by the department (as the copies of the notices themselves have not been produced before us) for serving such orders and we notice that a detention order is issued when, inter alia, it is not practicable to seize the goods believed to be liable to confiscation. This is significant. It is also significant that the show cause notice and the order-in-original reproduce only a part of the language used in proforma but whatever has been reproduced is enough to give a clue to the nature of action taken. We notice in this connection that admittedly the goods remained in the custody of the railway authorities for quite some time and were subsequently removed with the consent of the parties and under the order of the High Court to a warehouse.
71. The learned Counsel for the respondent has not shown whether at any stage after their detention at Shalimar Yard and before the order of the confiscation passed by the Collector the goods were actually seized in terms of Section 110 of the Customs Act by the proper officer(s) of Customs. As already noticed, no documents have been filed and no Panchnama has been produced as evidence of the seizure during the course of hearing on both the dates, nor any such documents have been enclosed with the written brief.
72. We really need not go into the question of the reason to believe emphasised by the learned Counsel for the respondent in this situation.
But we may mention, once again, that in para 2(1) of the show cause notice and the order-in-original the words used are 'reason to suspect' and how that 'reason to suspect' suddenly became the 'reason to believe' and detention became seizure in the eyes or adjudicating authority, is not clear to us and the learned Counsel for the respondent has also not enlightened us in this respect.
73. Actually the very fact that the goods were detained and not seized on 11-4-1985 only shows that apart from the practicability or otherwise of the seizure the officer(s) had merely 'reason to suspect' as distinguished from 'reason to believe' at that point of time. This was indeed not very surprising if we take note of the fact that on 13-3-1985 the Controller of Imports and Exports had given the statement with reference to licence No. P/L/3012892/C/XX/93/E/84, dated 17-10-1984, in pursuance of an enquiry resulting from an information in respect of certain persons. These persons have been named but we find neither the name of the appellant nor that of his concern is included there; Nor indeed the licence No. P/L/3012892, dated 17-10-1984 about which so much has been said in the show cause notice and order-in-original and the submissions before us, is the licence in question before us.
74. We also notice that in the date-sheet submitted by the respondent as also in the show cause notice and the order-in-original there is no mention of the date on which the licences in question were shown to the Controller of Imports and Exports, Shillong and his submission was recorded in respect of these licences which alone are relevant for our purpose.
75. The statement dated 13-3-1985 of the Controller of Imports and Exports regarding one of the licences in question has not been produced before us.
76. The affidavit referred to by the learned Counsel for the respondent was taken much after the seizure and, therefore, evidently could not have been the basis for reason to believe, if any, at the time of the so-called seizure.
77. The date 13-3-1985 also strikes us as a very important date inasmuch as it is the date prior to the date of the order of clearance Under Section 47 passed by the Paradip Customs namely 21-3-1985 and a question arises in our mind that if the officers of Calcutta Customs, as a result of their detailed investigation had already come to the conclusion that there was strong reason to believe that the licences in question were forged whether they informed their counterparts at Paradip or not prior to the date of the order of clearance. This position has not been made clear by the respondents, but there are only two possibilities, namely, either they did or did not do so prior to the date of clearance. If they did inform the Paradip Customs prior to the date of the order of the clearance then obviously the Paradip Customs would have been on their guard and would have taken care to satisfy themselves fully about the genuineness and validity of licences produced before them and in case they developed a "reason to believe" that the licences were not genuine or were forged or were not valid, or were void or unacceptable for any reason whatsoever then in the normal course the Paradip Customs would have themselves detained the goods pending verification and enquiry and would not have passed an order Under Section 47. In this context, the language of Section 47 became important. It clearly casts a duty on the proper officer to satisfy himself that the goods were not prohibited goods prior to allowing clearance. If on the other hand, the Calcutta Customs had not passed on the relevant information to the Paradip Customs at this crucial stage then the Calcutta officers either failed in their duty to put their counterpart(s) on the guard at the right time or really had no reason to believe till the date of clearance that the goods were liable to confiscation. In the normal course, it would appear that, even if, the reason to believe had not developed till then, but strong reason to suspect had developed as a result of enquiry and investigation including the statement of the Controller of Imports and Exports even then the Calcutta Customs were duty-bond to promptly inform the Paradip Customs so that the latter could take appropriate action. There is no mention at ail of these relevant factors, either in the show cause notice or in the order-in-original or the submissions made before us, but it has been indicated that by the time the Customs, Calcutta, approached the Paradip Customs the goods had already been cleared Under Section 47.
78. Be that as it may, if even by or on 11-4-1985 a reason to believe sufficient to justify an act of seizure had developed a question arises why the respondents are shying away from showing the evidence thereof? Even if it is presumed that on 13-3-1985 the Controller of Imports and Exports had also mentioned about the licence(s) in question, then a question arises in our mind as to what prevented the learned Counsel for the respondents from showing to us this statement. Be that as it may, even if we presume for a moment that these two licences were referred to, it is interesting to note that the show cause notice as well as the order-in-originai merely refer to photocopy of one of the licensed in question (No. P/L/3012677/C/XX/93/E/84, dated 14-8-1984).
There is no mention whatsoever of the other licence in question (namely P/L/3013046/C, dated 10-12-1984). Further apparently only a photocopy was shown and on the basis of the impression of the Controller of Imports and Exports formed after seeing that photocopy the officers evidently jumped to the conclusion that endorsement(s) thereon had been forged and, therefore, the goods imported against the said licence would be liable to confiscation.
79. We notice that there is no reference to any expert opinion in the matter and we consider that while Controller's opinion could have created a reason to suspect, it could hardly create by itself, a 'reason to believe' and that is why, perhaps, the officers merely detained the goods and did not seize them. But even if we presume for a moment, for argument's sake, that the goods had been seized Under Section 110 then a question arises whether such a seizure was by itself sufficient to create or vest jurisdiction in the Collector of Customs, Calcutta to adjudicate the case.
80. In this respect we notice that the Section 122 read with Sections 2, 4 and 5 of the Customs Act shows that the adjudicating authority as defined Under Section 2 and as appointed Under Section 4 could exercise the powers vested in him only within the territory notified Under Section 4. In other words, a Collector of Customs could adjudicate cases in respect of the goods and persons only if the cause of action arose within his territorial jurisdiction. That is to say, the jurisdiction for adjudication for confiscation and penalty Under Section 122 or to exercise powers in terms of Section 129D and other relevant sections is vested only in the Collector in whose jurisdiction the alleged offences are committed. It is noteworthy that it is the basic act of import which initially gives rise to cause for action under the Customs Act and in the instant case, the goods were admittedly and undisputably imported at Paradip. For the situation(s) mentioned by the learned Counsel for the respondents when a part of the offence is committed at one place and a part, at another place and/or the offence is of a continuing nature, we need not look to the Cr.P.C., because the Customs Act itself takes care of such situation(s) by virtue of the authority vested in the Government to issue appropriate notification(s) Under Section 4 and such notifications have indeed been issued Under Section 4 vesting all India jurisdiction in the Director of Revenue Intelligence and the Director of Inspections. Therefore, if the Collector of Customs, Calcutta, had reason to suspect or a reason to believe that there was going to be an attempt to import of goods liable to confiscation had taken place and the offence was or was likely to be that of a continuing nature and more than one Collectorates were likely to be involved, the proper course of action was to pass on the information to the Director of Revenue Intelligence for investigation so that seizure, if necessary, could be made by them and the case could be adjudicated by the Director of Inspections (under the orders of the Board, if necessary) in exercise of their all-India-jurisdiction. Even otherwise, an order Under Section 47 having been passed by the proper officer of Paradip Customs, it was the duty of the Calcutta Customs and, in fact, of all citizens of India to respect that order unless it was modified or set aside by the competent authority. So long as an order of Paradip Customs was holding the field, it was not open to the Calcutta Customs to even seize the goods as in the face of such an order it was not possible in the ordinary course for the Calcutta Cutoms (or any body else for that matter) to form a belief that the goods were liable to confiscation. If any new facts or circumstances had come to light the Calcutta Customs could have, at the most, detained the goods and informed the Paradip Customs authorities and the Collector of Customs and Central Excise, Bhubaneswar for such action as they deemed fit. Perhaps, that is why, the goods were only detained and not seized. The detention on account of strong suspicion is understandable as a preventive measure and such an action at that stage was, therefore, justified. But it was not open to the Calcutta Customs to appropriate the role of the Director of Revenue Intelligence or the Director of Inspections or the Collector of Central Excise and Customs, Bhubaneswar or/Paradip Customs. In fact if one Collector starts disregarding the action taken by another, chaotic conditions will prevail and a citizen would never be at rest. This could not be the intention of the legislature or the Government or even the Department of Revenue itself for that matter.
81. Both the sides have cited a number of case laws. But in view of the above position it is not necessary to go into the details thereof. It may be sufficient to mention that the cases cited by the learned Counsel for the respondents do not help his case, nay/not eve.n the cherished adjudication manual. First and foremost, the Adjudication Manual has no authority of law and para 55(2) cited before us could, at the most be said to reflect the opinion of the respondent's organisation at a particular level - level of, say, Director of Inspections or Board. It is interesting to note in this connection that para 55(2) does not cite any authority in support of its contents; nor does the Adjudication Manual as a whole for that matter indicates the source of its authority. And with due respect to the authorities issuing the Manual we are not in agreement with the view expressed therein, inasmuch as in our opinion an act of seizure, by itself, does not vest any jurisdiction to adjudicate and as w'e have already shown above, the jurisdiction for purpose of adjudication Under Section 122 of Customs Act, 1962 is required to be determined with reference to Sections 2, 4 and 5. This indeed shows that the instructions contained in para 55(2) are at variance with the provisions of law and, therefore, are not proper instructions and are required to be modified suitably.
82. Insofar as the judgment of the Calcutta High Court in the case of "Collector of Customs and Central Excise, West Bengal and others v.Hindustan Motors Ltd. and Anr." (AIR 1975 Calcutta 368) is concerned, it does not help the respondents, inasmuch as, in that case one of the points involved was as to whether any action could be taken under the Customs Act after an order Under Section 47 had been passed. There is no such dispute before us. The appellants are not saying that no action could be taken, they have only urged that action, if any, could be taken only by Paradip Customs or C.C.I.E., Bhubaneswar and not by Calcutta Customs.Vasantlal Ranchhoddas Patel and others v.Union of India and others (AIR 1967 Bombay 138) relied upon by the learned Counsel for the respondent includes an observation by the Hon'ble Court that the Section 110 does not lay any limitation as to the person from whose possession or the time and place at which the goods believed to be liable to confiscation can be seized. If there is reasonable ground to believe that the goods are liable to confiscation, they can be seized from any person in custody of them. Here, we have shown that the situation is different, inasmuch as, apparently no seizure was effected Under Section 110. Therefore, while we respectfully agree with the observation made by the Hon'ble High Court of Bombay, the citation does not really help the cause of the appellants in this case.
84. Insofar as the case of "Sheikh Mohammed Sayeed v. Assistant Collector of Customs for Preventive (I) and others" (AIR 1970 Calcutta 134) is concerned, it had been relied upon to show that if the goods are cleared on the basis of a forged licence, the goods so imported cannot be treated to be lawfully imported goods; and such goods, though cleared after payment of duty, are liable to confiscation and power to seize Under Section 110(1) may be invoked by the Customs authority. But the question before us at the moment is which Customs authority, whether Paradip Customs or Calcutta Customs? The points regarding validity or forgery, if any, are undoubtedly required to be considered very carefully but by whom? The competent authority having jurisdiction naturally. Since at this moment we are addressing ourselves only to the question of jurisdiction we need not enter into these aspects in details and we need not examine at length as to whether a forged licence was void or voidable and related matter. We may, however, mention in the passing that according to the order-in-original before us, conspirary to forge was entered into by some other persons and the appellants concerned have not been held guilty of committing forgery.
In any eventuality, whether the appellants acted in good faith and utilised the licences in the bona fide belief that they were genuine or were guilty of using fraudulent means or take clearance by practising fraud on the Paradip Customs authorities, is again a matter which was required to be looked into and could indeed be decided only by the competent authority having jurisdiction to hear the case initially.
Similarly, whether action was required to be taken Under Section 122 or Section 129D was for the proper authority having jurisdiction to decide in the first instance. We need not go into this aspect at this stage as we are seized with the main threshold question of jurisdiction of the Calcutta Customs (itself) to take any action whatsoever under Customs Act, 1962.
85. We may, however, mention en passant that we view with great respect the views expressed by our brothers of South Regional Bench in their orders namely 517/86 and 518/86 [1986 (9) ECR 623 CEGAT (SRB)] cited by the learned Counsel for the appellants.
86. We consider that in view of the position stated above, we need not go into other submissions made by both the sides and it will be sufficient to say that the Calcutta Customs had neither the, jurisdiction to seize nor to adjudicate the case in respect of the goods in question.
87. In view of the facts and circumstances of the case and the position in law as cited above, the impugned order of the Collector of Customs, Calcutta, is without jurisdiction and bad in law. It is set aside as such.
89. As the main appeal has been accepted, the M.A. No. 11/87, has become infructuous. It is dismissed as such.