Customs notification scope limited to third-country goods routed through Nepal; Nepalese-origin salwood could not support confiscation or penalties.

Nepali salwood could not be confiscated under Notification No. 76-Cus/65 because the notification applied only to goods exported to Nepal from countries other than India and then imported into India from Nepal. The record showed the seized timber was of Nepalese origin, and there was no proof that it was third-country origin goods routed through Nepal. As the essential condition for invoking the notification was not established, the alleged contravention failed and the foundation for confiscation of the goods, the truck, and the penalties collapsed.

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Issues: Whether Nepali salwood could be confiscated and penalties sustained on the footing that it violated Notification No. 76-Cus/65 dated 19-6-1965 issued under Section 11 of the Customs Act, 1962 read with Section 3(1) of the Imports and Exports Control Act, 1947.

Analysis: The notification covered only goods which had been exported to Nepal from countries other than India and then imported into India from Nepal. The record showed that the seized timber was of Nepalese origin, and there was no proof that it was third-country origin goods exported to Nepal from outside India. On that footing, the essential condition for attracting the notification was not established. Since the alleged contravention was not proved, the foundation for confiscation of the goods, the truck, and the penalties failed.

Conclusion: The confiscation and penalties were unsustainable and were set aside in favour of the appellants.

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