Partnership firm liability and seizure limitation under Customs law clarified: notice to partners suffices, and Section 110(2) does not bar adjudication.

A partnership firm is treated as a compendious description of its partners for customs penalty purposes, so service of show-cause notices on the partners can sufficiently support adjudication against the firm. The text also states that the limitation in Section 110(2) of the Customs Act, 1962 concerns retention and return of seized goods only, and does not restrict confiscation or penalty proceedings under Section 124. Expiry of that seizure-retention period therefore does not invalidate adjudication for confiscation or penalty. On these issues, the reference applications were rejected and no referable question of law was found.

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Issues: (i) Whether a partnership firm is a person within the meaning of Section 112 of the Customs Act, 1962 and whether notice to the partners could sustain penalty on the firm. (ii) Whether the limitation in Section 110(2) of the Customs Act, 1962 affected proceedings for confiscation and penalty under the Customs Act, 1962.

Issue (i): Whether a partnership firm is a person within the meaning of Section 112 of the Customs Act, 1962 and whether notice to the partners could sustain penalty on the firm.

Analysis: A partnership firm has no separate juristic existence apart from its partners and is only a compendious description of the partners carrying on business together. Where show-cause notices are served on the partners who constitute the firm, the firm is adequately represented for penal adjudication. The definition of a company in Section 140 of the Customs Act, 1962 did not require a different result on these facts, because the penalty on the firm was in substance a penalty on the partners comprising it.

Conclusion: The question was answered against the applicants and in favour of the Revenue.

Issue (ii): Whether the limitation in Section 110(2) of the Customs Act, 1962 affected proceedings for confiscation and penalty under the Customs Act, 1962.

Analysis: Section 110(2) governs retention and return of seized goods and does not operate as a limitation on proceedings under Section 124 of the Customs Act, 1962. The seizure limitation and the power to issue a show-cause notice are distinct, and expiry of the period in Section 110(2) does not invalidate adjudication for confiscation or penalty.

Conclusion: The question was answered against the applicants and in favour of the Revenue.

Final Conclusion: No referable question of law arose on the principal issues urged, and the reference applications failed.

Ratio Decidendi: A partnership firm is not a separate legal person for penal adjudication under the Customs Act, 1962, and service of notice on the partners is sufficient; the limitation in Section 110(2) does not control proceedings under Section 124.

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