Customs confiscation fails when full examination reveals no prohibited goods, and the consequential penalty also falls away.

Confiscation of imported goods could not be sustained where a full Customs examination found no arms, ammunition or other prohibited articles in the consignment, so the statutory basis for action under the Customs Act was absent. Because the penalty was consequential to the confiscation, it also could not survive once confiscation failed. The appeal therefore succeeded and both confiscation and penalty were set aside.

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Issues: Whether confiscation of imported goods and the consequential penalty could be sustained when 100% physical examination by Customs did not reveal any arms, ammunition or other prohibited articles in the consignment.

Analysis: The goods were subjected to full examination by Customs officials in the presence of the importer's authorised representative, and the recorded finding was that no serviceable articles, arms or ammunition were mixed with the goods. In such circumstances, the basis for invoking confiscation under Section 111(d) was absent. Once confiscation could not stand, the penalty imposed on the importer also could not survive as it was consequential to the confiscation.

Conclusion: The confiscation was not sustainable, and the penalty was liable to be set aside; the appeal succeeded.

Ratio Decidendi: Where a consignment, on full Customs examination, is found not to contain any prohibited articles, confiscation under the Customs Act cannot be upheld and any penalty founded on such confiscation falls with it.

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