1994 (6) TMI 80 - AT - Customs

Division Bench overturns vessel confiscation due to procedural errors, remands for review.

The Division Bench found that the absolute confiscation of the vessel 'Zoodu Salamy' under Sections 115(1)(a) and 115(2) of the Customs Act, 1962, was ... Confiscation of conveyance Issues:- Confiscation of vessel under Sections 115(1)(a) and 115(2) of the Customs Act, 1962.- Validity of absolute confiscation of the vessel.- Interpretation of Sections 115 and 125 of the Act.- Compliance with procedural requirements in the show cause notice.- Consideration of the High Court's directions regarding redemption of the vessel.- Remand of the matter for further consideration.Analysis:The appeal challenged the absolute confiscation of the vessel 'Zoodu Salamy' under Sections 115(1)(a) and 115(2) of the Customs Act, 1962, by the Collector of Customs, Bangalore. The appellant contended that the vessel was used for smuggling watches, leading to its confiscation. The High Court had set aside the absolute confiscation and directed that the appellant be given an option to redeem the vessel by paying a fine. However, during the pendency of the writ appeal, a second order of adjudication was passed, absolutely confiscating the vessel without adhering to the High Court's direction. The Division Bench noted the failure to exercise discretion under Sections 115 and 125 of the Act and advised the appellant to pursue available remedies under the Customs Act.The appellant argued that the vessel's confiscation should not be absolute but subject to redemption under Section 115(2) of the Act. The appellant contended that Section 115(1)(a) was improperly invoked as it was not specifically mentioned in the show cause notice, which only referred to Section 115(2). The appellant highlighted the definition of 'goods' in Section 125, which includes vessels, and argued that the failure to provide an option for redemption rendered the confiscation unsustainable in law.The Respondent, represented by the learned SDR and D.R., argued that the appellant had been adequately notified of the confiscation under Section 115(1)(a) through the show cause notice, despite the absence of specific mention. They contended that Section 125 did not apply as it pertained to goods prohibited for importation or exportation.Upon examination, the Tribunal found that the show cause notice did not sufficiently notify the appellant of the confiscation under Section 115(1)(a), leading to the initial adjudication under Section 115(2). The Tribunal concluded that absolute confiscation under Section 115(1)(a) was unsustainable due to procedural deficiencies. The appellant's argument for redemption under Section 115(2) was upheld, and the matter was remanded to the original authority for reconsideration in accordance with the law, with a directive for expeditious resolution.In a concurring opinion, another Member emphasized that all issues were open for consideration by the lower authority and highlighted the necessity of proper notice under Section 115(1)(a) for confiscation. The lower authority was encouraged to issue a notice under Section 115(1)(a) if deemed appropriate.