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of <h1>Customs Act: Sections 110 & 124 Independent. Procedural Fairness Emphasized in Seizure Extension. Appeal Dismissed.</h1> <h3>HARBANS LAL Versus COLLECTOR OF CENTRAL EXCISE & CUSTOMS</h3> HARBANS LAL Versus COLLECTOR OF CENTRAL EXCISE & CUSTOMS - 1993 (67) E.L.T. 20 (SC), (1993) 3 SCC 656 Issues Involved:1. Interrelation between Sections 110 and 124 of the Customs Act, 1962.2. Validity of ex parte extension of seizure period under Section 110(2).3. Impact of vitiation of extension order on proceedings under Section 124.4. Jurisdiction and procedural fairness in extending the seizure period.Detailed Analysis:1. Interrelation between Sections 110 and 124 of the Customs Act, 1962:The primary issue in this case was whether Sections 110 and 124 of the Customs Act, 1962 are interdependent or independent. The appellant argued that the proceedings under Section 124 could not proceed if the extension of the seizure period under Section 110 was vitiated. The Supreme Court, referencing the Constitution Bench decision in I.J. Rao, concluded that Sections 110 and 124 are independent, distinct, and exclusive of each other. Section 110 pertains to the investigation stage, while Section 124 deals with the confiscation of goods and imposition of penalties, which are steps towards trial. Therefore, proceedings under Section 124 can continue irrespective of the validity of the extension under Section 110.2. Validity of ex parte extension of seizure period under Section 110(2):The appellant challenged the ex parte extension of the seizure period by the Collector, arguing it was done without affording him an opportunity to be heard. The Supreme Court upheld the principle that the owner of the seized goods is entitled to a pre-decisional notice before the extension of the seizure period, as established in previous cases such as I.J. Rao and Charan Das Malhotra. The Court acknowledged that the ex parte extension was vitiated due to the lack of notice and hearing.3. Impact of vitiation of extension order on proceedings under Section 124:Despite recognizing the vitiation of the extension order under Section 110(2), the Supreme Court held that this did not affect the validity of proceedings under Section 124. The Court emphasized that the period stipulated under Section 110(2) only affects the seizure of goods and not the validity of the notice under Section 124. The Court cited Charan Das Malhotra's case to support this view, stating that the seizure period's expiry entitles the owner to the return of goods but does not invalidate the notice for confiscation and penalty proceedings under Section 124.4. Jurisdiction and procedural fairness in extending the seizure period:The appellant's jurisdictional challenge was based on the procedural fairness of extending the seizure period without a hearing. The Supreme Court reiterated the necessity of procedural fairness, as highlighted in previous judgments, and confirmed that the extension of the seizure period must be based on sufficient cause and facts presented to the Collector. The Court noted that the Collector's mechanical extension without proper justification and notice was not permissible. However, this procedural lapse did not invalidate the subsequent proceedings under Section 124.Conclusion:The Supreme Court upheld the High Court's decision, maintaining that Sections 110 and 124 of the Customs Act are independent and distinct. The vitiation of the ex parte extension under Section 110(2) did not affect the validity of proceedings under Section 124. The appeal was dismissed, affirming the High Court's judgment, with no order as to costs.
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