Failure to prepare separate seizure memo under Section 110 doesn't invalidate confiscation proceedings under Section 124

Gujarat HC rejected petitioner's challenge to confiscation of aluminum coated gold wires and penalty imposition. Court held that failure to prepare separate seizure memo under Section 110 does not render seizure illegal or vitiate subsequent confiscation proceedings under Section 124 of Customs Act, 1962. Sections 110 and 124 operate independently. Court found that adjudication of confiscation can occur without seizure, and personal penalty can be imposed without goods being seized. Regarding Section 112 violation, court determined that mens rea need not be proved for penalty imposition where false representation is established. Gold imported in contravention of statutory provisions constitutes prohibited goods liable for confiscation under Sections 11/11A read with Section 2(33) of Customs Act.

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Issues Involved:
1. Legality of the seizure of goods under Section 110 of the Customs Act, 1962.
2. Applicability of penalty under Section 112 of the Customs Act, 1962.
3. Right to pay fine in lieu of confiscation under Section 125 of the Customs Act, 1962.

Detailed Analysis:

1. Legality of the Seizure of Goods under Section 110 of the Customs Act, 1962:
The writ-applicant argued that the seizure of the goods was illegal due to the failure of the Customs Officers to prepare a separate seizure report as mandated by Section 110(1) of the Act. The Court noted that while a separate seizure memo was not prepared, the subjective satisfaction that the goods were liable to be confiscated was recorded in the panchnama. The Court emphasized that the omission to draw a separate seizure memo does not render the seizure illegal and does not vitiate subsequent proceedings. The Court referred to the Division Bench decision in J.K.Bardolia Mills v. M.L.Khunger, which held that the provisions of Section 110 and Section 124 are independent and the absence of a separate seizure memo does not affect the validity of confiscation proceedings. The Court concluded that the seizure was valid and rejected the writ-applicant's contention.

2. Applicability of Penalty under Section 112 of the Customs Act, 1962:
The writ-applicant contended that the penalty under Section 112(b) was improperly imposed as the Customs Department failed to establish the presence of mens rea. The Court clarified that Section 112(b) deals with the blameworthy conduct of the person concerned and does not necessarily require mens rea. The Court cited the decision in Comex Co. v. Collector of Customs, Madras-I, which held that the establishment of blameworthy conduct suffices for imposing a penalty under Section 112. The Court noted that the writ-applicant's act of concealing gold and making false declarations clearly indicated blameworthy conduct, thereby justifying the penalty under Section 112(b).

3. Right to Pay Fine in Lieu of Confiscation under Section 125 of the Customs Act, 1962:
The writ-applicant argued that he should have been given the option to pay a fine in lieu of confiscation as the appellate authority had acknowledged that gold is not a prohibited item. The Court referred to the decision in Commissioner of Customs (Air) v. Samynathan Murugesan, which held that gold, though not a prohibited item, becomes prohibited if imported without fulfilling the prescribed conditions. The Court emphasized that the writ-applicant did not qualify as an eligible person to import gold and had attempted to smuggle it by concealing it, thus making the gold liable for absolute confiscation. The Court concluded that the adjudicating authority was justified in ordering absolute confiscation without giving an option to pay a fine in lieu of confiscation.

Conclusion:
The Court upheld the validity of the seizure, the imposition of penalties under Section 112(b), and the absolute confiscation of the gold without the option to pay a fine in lieu of confiscation. The writ-application was rejected.

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