Appeal partly allowed due to invalid notice extension. Penalty upheld. Jurisdiction affirmed by majority.

The appeal was partly allowed. The order of confiscation of the watches was set aside due to the invalid extension of the period for issuing the show-cause notice. However, the penalty imposed on the appellant was upheld as the adjudicating officer had found the goods liable to confiscation. The jurisdiction of the Deputy Collector, Allahabad, to adjudicate the case was affirmed by the majority, but the minority opinion held that the jurisdiction had shifted to the Patna Collectorate.

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Issues Involved:

1. Jurisdiction of the Deputy Collector, Allahabad.
2. Validity of the show-cause notice issued after six months from the date of seizure.
3. Legality of the corrigendum issued to the show-cause notice.
4. Impact of non-issuance of show-cause notice within the prescribed period on the penalty and confiscation proceedings.
5. Effect of the criminal proceedings and discharge of the accused on the customs adjudication.

Detailed Analysis:

1. Jurisdiction of the Deputy Collector, Allahabad:

The primary contention was whether the Deputy Collector, Allahabad had jurisdiction to adjudicate the case after the creation of the Patna Customs Collectorate in 1972. The appellant argued that Notification No. 35 of 4-3-1972 extinguished the jurisdiction of the Allahabad Collectorate over Lucknow District. However, it was concluded that the notification did not supersede or modify the earlier Notification No. 37 of 1963, which appointed the Collector of Central Excise, Allahabad, as the Collector of Customs for the Allahabad Collectorate. Therefore, the Deputy Collector, Allahabad retained jurisdiction. The minority opinion disagreed, stating that the later notification implicitly repealed the earlier one, thus divesting the Allahabad Collectorate of jurisdiction over Lucknow.

2. Validity of the Show-Cause Notice Issued After Six Months:

The appellant argued that the show-cause notice issued on 27-1-1970, more than six months after the seizure on 12-5-1969, was invalid as the extension was granted without giving an opportunity to the appellant to show cause against it. The Tribunal referred to the Supreme Court's decision in Charan Das Malhotra (A.I.R. 1972 S.C. 689), which mandates that the extension of the period for issuing a show-cause notice must be done after giving the affected party an opportunity to be heard. The failure to do so rendered the extension and subsequent proceedings invalid.

3. Legality of the Corrigendum Issued to the Show-Cause Notice:

The appellant contended that the corrigendum issued on 27-12-1978, which required the appellant to show cause to the Deputy Collector, Allahabad, was without jurisdiction as it was issued beyond the six-month period. The Tribunal found this argument without substance, stating that the corrigendum merely directed the appellant to the appropriate authority and did not affect the validity of the proceedings.

4. Impact of Non-Issuance of Show-Cause Notice Within the Prescribed Period on the Penalty and Confiscation Proceedings:

The Tribunal noted conflicting judgments from various High Courts on whether the non-issuance of a show-cause notice within six months invalidates the confiscation and penalty proceedings. The Calcutta High Court (1982 E.L.T. 902) and Delhi High Court (1983 E.L.T. 1715) held that such non-compliance renders the proceedings illegal. Conversely, the Madras High Court (A.I.R. 1975 Madras 43) held that the department could proceed with confiscation and penalty despite the delay. The Tribunal followed the Calcutta and Delhi High Courts' decisions, setting aside the confiscation but upholding the penalty as the adjudicating officer had recorded a finding that the goods were liable to confiscation.

5. Effect of the Criminal Proceedings and Discharge of the Accused on the Customs Adjudication:

The appellant mentioned that a criminal complaint was filed, but the accused was discharged due to the prosecution's failure to present evidence. The Tribunal did not delve into this issue extensively, as it was not addressed by the appellant's counsel during the hearing. The discharge in the criminal case did not automatically invalidate the customs adjudication proceedings.

Conclusion:

The appeal was partly allowed. The order of confiscation of the watches was set aside due to the invalid extension of the period for issuing the show-cause notice. However, the penalty imposed on the appellant was upheld as the adjudicating officer had found the goods liable to confiscation, and the appellant's counsel did not contest the merits of the evidence against the appellant. The jurisdiction of the Deputy Collector, Allahabad, to adjudicate the case was affirmed by the majority, but the minority opinion held that the jurisdiction had shifted to the Patna Collectorate.

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