TaxTMI 
TaxTMI 
2016 (8) TMI 530
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.... the possession of one Mr.R.Mahaveer. He had given voluntary statements dated 19.03.2013 and 25.03.2013 respectively, confessing that he had smuggled Singapore gold jewellery. 3. Case of the appellant is that they used to receive gold jewellery through their sister concern, namely M/s.Focus Jewel Arcade Pvt. Ltd., Coimbatore and one Mr.Shameem, is the person in-charge of procuring gold jewellery for them. 4. Before the writ court, appellant also contended that the request to provisionally release the seized goods in terms of Section 110-A of the Customs Act, 1962 was not considered, despite appellant's assurance that they would cooperate in the investigation and therefore, they were constrained to file W.P.No.18833/2013, for a mandamus directing Additional Director General, Directorate of Revenue Intelligence, Chennai Zonal Unit, Chennai to release gold weighing 5541.92 Grams, seized vide Mahazar dated 27.03.2013. 5. On behalf of Directorate of Revenue Intelligence, Chennai (1st respondent herein), a counter affidavit has been filed contending inter alia that on specific intelligence, that Mr.R.Mahaveer has smuggled gold jewellery from Singapore, planned to carry the said sm....
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....e Intelligence, has further stated that, based on the voluntary statement of Mr.R.Mahaveer, corroborated with documents recovered from his residential premises, simultaneous searches were also conducted on various buyers stated supra, who have purhcased Singapore gold jewellery from Mr.R.Mahaveer. Search conducted at the business premises of M/s.Malabar Diamond Gallery Pvt. Ltd., the appellant herein, on 27.03.2013 led to the recovery of the smuggled gold jewellery of Singapore origin received from Mr.R.Mhaveer. On assaying the gold jewellery, Mr.Mohan Achari, a govt approved assayer certified that the said gold jewellery was 22 ct gold, totally weighing 5541.92 gms, having a market value of Rs. 1,54,28,705/-. Simultaneously, on 27.03.2013, during search operations conducted at the business premises of M/s.Focus Jewel Arcade Pvt. Ltd., Coimbatore, a total of 894 gms of Singapore gold jewellery valued at Rs. 24,88,896/- was seized by the officers of DRI, Coimbatore, as the same was admittedly the remanants of 1400 gms of smuggled gold jewellery of Singapore origin purchased from Mr.R.Mahaveer without bill. 8. The Directorate of Revenue Intelligence, Chennai further stated that in t....
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....s.Malabar Gold and Diamond Pvt. Ltd., Chennai, used to pay Mr.R.Mahaveer for the gold jewellery of Singapore origin in terms of refined gold bars; that during the previous week, they had received around 1400 gms of gold jewellery of Singapore origin without bill from Mr.R.Mahaveer, of which 894 grams came to be seized by the DRI officers; that he was aware that procuring/trading of gold jewellery of Singapore origin without proper documents was an offence, but did so due to their better quality and lower price. 10. The Directorate of Revenue Intelligence, Chennai has further submitted that Mr.Praveen Kumar, Burma Bazaar operator has been arrested and remanded to judicial custody. According to the first respondent, as per Customs Notification No.3/2012 dated 16.01.2012, only passengers of Indian origin or a passenger in possession of a valid passport issued under the Indian Passports Act, 1967, who have stayed abroad for six months and above, are eligible to import gold of foreign origin and clear the same on payment of Customs duty, at the rate prescribed. The said notification, thus imposes restriction on the import of gold into India by a passenger. 11. Placing reliance on the ....
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.... of Customs (AIR), Chennai-600027, have been impleaded as respondents 2 and 3, in the writ petition. 13. On the above facts, when the writ petition came up for hearing, petitioner/appellant has submitted that gold jewels were purchased for valuable consideration, and that a reply dated 18.11.2013 to the show cause notice, has already been submitted. 14. On behalf of the department, submission has been made that the department is ready and willing, to adjudicate the claim, pursuant to the show cause notice, provided all the noticees, cooperate with the department. On the above submissions, the writ court in W.P.No.18833/2013 dated 17.11.2014 has ordered as, hereunder: " 5. From the copy of the show cause notice dated 16.9.2013, it is seen that there are 19 persons, against whom, notice has been issued. In such circumstances, no direction can be issued to the respondents, solely at the instance of the petitioner herein, who is one among 19 noticees. 6. Therefore, a direction is issued to the third respondent to adjudicate the claim made in the show cause notice dated 16.09.2013 subject to the condition that all the noticees should participate and cooperate with the adjudication....
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..... Referring to the Notification No.72/97-Cus.(NT) dated 22.12.1997, learned counsel for the appellant submitted that as per schedule 4A to the said notification, gold in all forms, including bulliion, ingot, coin, ornament, crude jewellery, has been included as goods of perishable nature, depreciation in the value in the passage time, and therefore, the same can be disposed of, in such a manner as the Central Government may specify from time to time, by the proper officer. Inviting attention of this court to Circular No.22/2004-Cus. dated 03.03.2004, learned counsel for the appellant further submitted that even in the case of provisional assessment/clearance of disputed or offending consignments, Central Board of Excise & Customs, New Delhi has issued the aforesaid circular, by taking adequate bank guarantee/security to safeguard revenue (possible fine and penalty), gold seized can be released. He further submitted that though, the appellant has submitted their reply dated 18.11.2013 to the Commissioner of Customs (Seaport - Import), Chennai, and also assured cooperation, one of the 19 noticees, has filed a writ petition, challenging the show cause notice dated 16.09.2013 and by vi....
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.... but then, the proceedings have been stayed by this court. Though the writ court in W.P.No.18833/2013 dated 17.11.2014 directed the respondents to complete the proceedings as expeditiously as possible, preferably within six months from the date of receipt of a copy of the order and accordingly, adjudication proceedings also commenced, because of the stay of the proceedings, the appellant could not effectively implement the orders. 20. Referring to Section 125 of the Customs Act, 1962, learned counsel for the appellant submitted that whenever confiscation of any goods is authorised by the Customs Act, 1962, the officer adjudging it, may, in the case of any goods, the importation or exportation thereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit. 21. Reiterating that import of gold is not prohibited under the Customs Act, 1962 or any other law for the time being in force, learned counse....
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.... person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any, who claims to be the owner of the goods so seized. Referring to sub-section (2) of Section 123 of the Customs Act, 1962, he further submitted that the said section shall apply to all the goods including gold. According to him, unless the appellant satisfies that they are not smuggled goods and discharged their burden, they cannot seek for release of goods. In this context, he also referred to section 2(39) of the Customs Act, 1962, which defines "smuggling" and the said section reads "smuggling", in relation to any goods, means any act or omission which will render such goods liable to confiscation under section 111 or section 113 of the Customs Act. Learned counsel for the 2nd respondent submitted that when the act or omission of the appellant renders the goods liable to be confiscation under Section 111 or 113 of the Act, as the case may be, such goods will fall under the definition of prohibited goods, within the meaning of Section 2(33) of the Customs Act, 1962. 24. Referring to Chapter IV-A of ....
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.... not, is not a matter to be decided at the stage of provisional release and it can be done only on the conclusion of the adjudication proceedings by the adjudicating authority and in such circumstances, as on today, there is no right, much less absolute right, to claim release of gold, which according to the department is smuggled in to the country. In this context, he also referred to the relevant paragraphs in Lexus Exports case. At this juncture, he also submitted that when Lexus Exports P Ltd's case was decided in 1994 when Section 110-A of the Customs Act, 1962 was not there in the statute book. According to him, at that point of time, power to provisionally release the seized goods was exercised under Rule 206 of the Central Excise Rules, 1944 and in that context of the matter, drew the attention of this court to the judgment in Southern Springs and wire products vs Collector of Central Excise reported in 1990 (48) ELT 335 (Mad). 27. Placing reliane on Om Prakash Bhatia vs. Commissioner of Customs, Delhi reported in 2003 (155) ELT 423 (SC), the learned counsel for the respondents submitted that when clause (d) of Section 111 of the Customs Act, 1962 states that any goods....
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....ion of goods and violation of the conditions would make the goods, fall within the ambit of section 2(33) of the Customs Act, 1962 (prohibited goods). 31. Placing reliance on a decision in Ashish Kumar Chaurasia vs. Commissioner, CESTAT reported in 2015 (325) ELT 250 (All)(DB), learned counsel for the respondents further submitted that when the appellant has not produced any valid documents and discharged the burden under Section 123 of the Customs Act, 1962, goods seized are to be treated as smuggled goods and hence prohibited. 32. By way of reply, Mr.Joseph Prabhakar, learned counsel for the appellant submitted that Section 11A of the Customs Act, has no application to the case on hand, as the said Section defines, illegal import , as import of any goods in contravention of the provisions of the Customs Act, 1962 or any other law for the time being in force. 33. Referring to Sections 111 and 125 of the Customs Act, which deal with confiscation of imported goods, etc., and option to pay fine in lieu of confiscation respectively, learned counsel for the appellant submitted that Section 125 has two limbs, (1) either confiscation of any goods, importation or exportation thereof, a....
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.... parties, it is relevant to have a cursory look at the provisions of the Customs Act, 1962. As per Section 2(33) of the Customs Act, prohibited goods means, any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. 39. Positively, prohibited goods are defined, as goods, import or export of which, should be subject to any prohibition under this Act or any other law for the time being in force. Negatively, Section 2(33) of the Act, also states that goods are not prohibited goods, when import or export of which, does not include any such goods, in respect of which, the conditions subject to which the goods are permitted to be imported or exported have been complied with. The expression subject to any prohibition under this Act or any other law for the time being in force and compliance of the conditions, subject to which, the goods are permitted to be imported or exported, are the determining factors, to understand and to give effect to the meaning of ....
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....no question of construction of a statute arises, for the Act speaks for itself. It is a well recognized rule of construction that the meaning must be collected from the expressed intention of the Legislature." (vi) In Namamal v. Radhey Shyam reported in AIR 1970 Rajasthan 26, the Court held as follows: "11. Maxwell in his book on Interpretation of Statutes (11th Edition) at page 226 observed thus:-- "The rule of strict construction, however, whenever invoked, comes attended with qualifications and other rules no less important, and it is by the light which each contributes that the meaning must be determined. Among them is the rule that that sense of the words is to be adopted which best harmonises with the context and promotes in the fullest manner the policy and object of the legislature. The paramount object, in construing penal as well us other statutes, is to ascertain the legislative intent and the rule of strict construction is not violated by permitting the words to have their full meaning, or the more extensive of two meanings, when best effectuating the intention. They are indeed frequently taken in the widest sense, sometimes even in a sense more wide than etymolog....
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....he context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place." (xi) In Balram Kumawat v. Union of India reported in 2003 (7) SCC 628, the Supreme Court held that, Contextual reading is a well-known proposition of interpretation of statute. The classes of a statute should be construed with reference to the context vis-a-vis the other provisions so as to make a consistent enactment of the whole statute relating to the subject-matter. The rule of "ex visceribus actus" should be resorted to in a situation of this nature. (xii) In State of Gujarat v. Salimbhai Abdulgaffar Shaikh reported in 2003 (8) SCC 50, the Supreme Cour....
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....atute as being in apposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute. 41. In the light of the decisions and in the context of what is observed above, the expression, in section 2(33) of the Act, "prohibition under this Act" or any other law for the time being, has to be examined with the other provisions in the Customs Act, 1962. Section 2(39) of the Act, defines Smuggling in relation to any goods, which means, any act or omission which will render such goods liable to confiscation under section 111 or section 113. Chapter IV of the Act, deals with prohibition on importation and exportation of goods. Section 11 deals the power to prohibit importation or exportation of goods and the said Section is extracted hereunder: "(1) If the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2), it may, by notification in the Official Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specified description. (2) The ....
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....eals with searches, seizure and arrest. Section 110 of the Act, deals with seizure of goods, documents and things and the same reads as follows: "SECTION 110. Seizure of goods, documents and things. - (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. (1A) The Central Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification in the Official Gazette, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (1), be disposed of by the proper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified. (1B) Where any goods, being goods specified und....
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....r which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such goods; (b) any goods imported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the import of such goods; (c) any dutiable or prohibited goods brought into any bay, gulf, creek or tidal river for the purpose of being landed at a place other than a customs port; (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; (e) any dutiable or prohibited goods found concealed in any manner in any conveyance; (f) any dutiable or prohibited goods required to be mentioned under the regulations in an import manifest or import report which are not so mentioned; (g) any dutiable or prohibited goods which are unloaded from a conveyance in contravention of the provisions of section 32, other than goods inadvertently unloaded but included in the recor....
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....cquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater; (iv) in the case of goods falling both under clauses (i) and (....
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....said officer thinks fit : Provided that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods." 50. Section 126 of the Act, deals with, on confiscation, property to vest in Central Government. The said Section reads thus, "(1) When any goods are confiscated under this Act, such goods shall thereupon vest in the Central Government. (2) The officer adjudging confiscation shall take and hold possession of the confiscated goods." 51. The main contention of the learned counsel for the appellant is that the gold is not a prohibited good, in terms of Section 2(33) of the Customs Act, 1962 and when the Central Government, having regard to the perishable nature, depreciation in the value of the goods with the passage of time, constraints of storage space and valuable nature of t....
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.... to classification disputes, seizure and provisional release thereof, reading of the above Circular, makes it clear that it mainly deal with the delay in classification disputes and therefore, it is the considered view of this Court, that the circulars do not mandate that smuggled goods seized and liable for confiscation, also should be mandatorily released, immediately after seizure. 53. The Board has made it clear, unless the import/clearance is totally prohibited or banned, under any law, for the time being in force or where prosecution is contemplated, good seized need not be released. There cannot be any dispute that, smuggling as defined in section 2(39) of the Act and included in Sub-Section (i) to Section 11 of the Act is prohibited. That apart, in the instant case, FIR has been lodged and and one Mr.Praveen Kumar, has already been arrested and produced before the Court. It is not the case of the appellant that there is any congestion at the Ports or Warehouses. One of the important aspects to be taken note by the authorities while exercising their powers under Section 110-A of the Act is whether, import of goods is prohibited, within the meaning of Section 2(33) of the Cu....
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....nder Baggage Rules, 1998. As per Section 77 of the Customs Act, 1962, the owner of any baggage shall for the purpose of clearing the same has to make a declaration of its content to the proper officer. Further, according to Customs Notification No.3/2012 dated 16.01.2012, only passengers of Indian origin or a passenger in possession of a valid passport issued under the Indian Passports Act, 1967 who have stayed abroad for six months and above, are eligible to import gold jewellery of foreign origin and clear the same on payment of Customs duty at the rate prescribed. 42. A combined reading of the above mentioned legal provisions under Foreign Trade Regulations and the Customs Act, 1962, clearly indicate that conditions have been imposed on the import gold jewellery into india as baggage by a passenger inasmuch as only passengers complying certain conditions such as he/she should be of Indian origin or a Indian passport holder with minimum six months stay abroad etc, can import gold jewellery for their bona fide personal use and the same has to be declared to the Customs at the time of their arrival and pay applicable duty. These conditions are nothing but restrictions imposed on ....
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....en completely cleared accepting the plea of the importer that their import was not prohibited. The High Court held that so long as this acceptance stood the goods were not liable to confiscation. We are here concerned with the question whether the goods are liable to confiscation under s.111(j) and this question has to be answered in the affirmative in view of the language of the section. The conclusion here that the goods are liable to confiscation does not go behind or ignore the effect of the order of clearance, as in that case. It accepts the fact of clearance and proceeds on the footing that the goods, rightly cleared under s.59, have been clandestinely removed from the warehouse within the meaning of s.59. The decision cited by learned counsel is, therefore, of no assistance to him." The above reported case, is relied on by the respondents, for the purpose that the goods, clandestinely imported into the country, for evading the assessment of duty, are liable for confiscation. 57. In Union of India v. Lexus Exports Pvt. Ltd., reported in 1994 (71) ELT 348 (SC), a learned single Judge directed release of the seized goods. On appeal by the revenue, a Hon'ble Division Bench....
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.... Reverting to the facts on hand, as rightly contended by Mr.A.P.Srinivas, learned counsel for the respondents that in Lexus Exports' Pvt. Ltd.,'s case (cited supra), when submissions were made by the Lexus Exports Pvt. Ltd., that the respondents therein would in any event be entitled to have the goods released on payment of fine in lieu of confiscation even if there was such confiscation, the Hon'ble Supreme Court rejected the said contention, by stating that, until the culmination of the adjudication, it is difficult to envisage any right on the part of the respondents therein from whom they are seized to export them on the basis of a future title they expect to acquire by payment of fine." 59. In Om Prakash Bhatia v. Commissioner of Customs, Delhi reported in 2003 (155) ELT 423 (SC), the Hon'ble Apex Court considered a case of over-invoicing goods and consequently, a claim of fraudulent drawback. According to Mr.A.P.Srinivas, learned counsel for the respondents 2 and 3, Om Prakash Bhatia's case (cited supra), is the Bible, wherein, the Hon'ble Supreme Court, defined, what is meant by prohibited goods. Rejecting the contention of the appellant therein that....
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....ohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus: " What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to "any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to in that section applies to every type of "prohibition". That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression "any prohibition" in section 111(d) of the Customs Act, 1962 includes restrictions. Merely because Section 3 of the Imports and Exports (Control) Act, 1947, uses three different expressions "prohibiting", "restricting" or "otherwise controlling", we cannot cut down the amplitude of the word "any prohibition" in Section 111(d) of the Act. "Any prohibition" means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition. From item (I) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of livin....
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....learance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in Sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Sheikh Mohd. Omer v. Collector of Customs, Calcutta and others [(1970) 2 SCC 728], wherein it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by Clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus:-- "...What Clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to "Any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to in that section applies to every type of "prohibition". That prohibition may be complet....
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....he conditions. The impugned order deserves to be set aside. 10. In 1992 (61) ELT 372(cited supra), the Supreme Court directed the Collector to consider the exercise of discretion. In this case, the Collector had rightly considered it and refused to give the option. 61. Decision in Samyanathan Murugesan's case (cited supra), has been confirmed by the Hon'ble Supreme Court in Samyanathan Murugesan v. Commissioner of Customs (AIR) reported in 2010 (254) ELT A15(SC). 62. In Abdul Razak v. Union of India reported in 2012 (275) ELT 300 (Ker)(DB), there was an attempt by the appellant therein to smuggle gold, weighing over 8 Kgs, by concealing the same, in emergency light, mixie, grinder and car horns, etc. The authorities seized the same. Adjudicatory proceedings ended in confiscation. Contention of the appellant therein, before the High Court, was that Section 125 of the Customs Act, 1962, does not provide for confiscation of goods, other than prohibited goods. Repelling the said contention and following Om Prakash Bhatia's case (cited supra), at Paragraph 6, after referring to Section 2(33) of the Customs Act, 1962, a Hon'ble Division Bench of Kerala High Court, he....
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....ioned in Sections 11 and 11A of the Customs Act, 1962 or any other law, for the time being in force or restrictions imposed, such restrictions would also encompass the expression, any prohibition. 65. Though the learned counsel for the appellant contended that the decisions in Samyanathan Murugesan's case (cited supra) and Abdul Razak's case (cited supra), have been rendered in individual cases and with reference to baggage rules, thus, inapposite to the facts on hand, the said contention cannot be countenanced. When the Hon'ble Supreme Court in Om Prakash Bhatia's case (cited supra), has explained that, "Any prohibition" means every prohibition or all types of prohibitions, and "restriction", is also one type of prohibition, the ratio decidendi of the Hon'ble Supreme Court duly followed in the above referred cases, cannot be eschewed. Decisions cited supra apply to all the importers and they are bound to comply with the conditions of import and there cannot be any exception to the binding precedent. Distinction sought to be made, on the above grounds, is liable to be rejected and accordingly, rejected. 66. In Commissioner of Customs, Chennai v. Brinda Enterpr....
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....ional C.C., Airport, Chennai reported in 2016 (331) ELT 337 (Mad.), a learned single Judge considered a case, where a passenger was carrying gold chains of 18 carat, two bangles of 24 carat purity, 12 kg of saffron, RMD Kutka, Gudang Garam Cigarette cartons, perfumes and two samsung mobiles. A search was conducted by the Officers of Directorate of Revenue Intelligence, Trivandrum, in the baggages of the petitioner therein. Thereafter, statements were recorded. On completion of the investigation, a show cause notice was issued, under Section 124 of the Customs Act, 1962, proposing as to why, the seized goods should not be confiscated and penalty should not be imposed. He sent a reply, disputing the allegations. A Writ Petition has been filed, seeking for a direction to the respondent therein to release the seized imported goods, under the Mahazar. Accepting the contention of the revenue that since the passenger had attempted to smuggle goods into India, by concealing the same in his person, as well as in his hand baggage and checked-in-baggage, without declaring the same to the Customs, in order to evade payment of Customs duty, the aforestated goods, are held liable for confiscatio....
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.... person holding himself out to be the importer. `Smuggling', in relation to any goods, means any act or omission which will render such goods liable to confiscation under Section 111 or Section 113 of the Act. 7) Dutiable goods are goods whose import is permitted by the Act or any other law in force. Duty is the tax leviable on the goods occasioned by their import into India or their export out of India. The dutiability of the goods is covered by Section 12 of the Act which is the charging section. Under this Section, all goods imported into or exported from India are liable to Customs duty unless the Customs Act itself or any other law for the time being in force provides otherwise. The rate of duty is fixed by the Customs Tariff Act, 1975. "Import" and "Imported Goods" means that if goods are brought into India, meaning thereby into the territory of India from outside, there is import of goods and the goods become imported goods and become chargeable to duty upto the moment they are cleared for home consumption. The word `importer' has been defined in the Act as importer in relation to any goods at any time between their importation and the time when they are cleared ....
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....e to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgements at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances. ............ 13) In short, question before us is whether goods that are smuggled into the country can be read within the meaning of the expression `imported goods' for the purpose of benefit of the exemption notification. We are of the view that `smuggled goods' will not come within the definition of `imported goods' for the purpose of the exemption notification, for the reason, the Act defines both the expressions looking at the different definitions given to the two classes of goods: imported and smuggled, and we are of the view that if the two were to be treated as the same, then there would be no need to have two different definitions. 14) In order to under....
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.... goods are concerned, Paragraph 2.17 of the Foreign Trade Policy, prior to its amendment, stipulated that Digital Multifunction Print and Copying Machines were restricted items, and that they would be allowed to be imported only as per the provisions of the Foreign Trade Policy. On the expression, prohibited goods , at Paragraphs 12 to 14, a learned single Judge, held as follows: "12. The expression " Prohibited Goods" is defined in Section 2(33) of the Customs Act, 1962 to mean "any goods, the import or export of which is subject to any prohibition under the Customs Act or any other law for the time being in force, but it does not include any such goods in respect of which, the conditions subject to which the goods are permitted to be imported or exported have been complied with." 13. Unfortunately, the Act does not define the expression "Restricted Goods". But the definition of the expression "Prohibited Goods" itself contains an indication as to how the expression "Restricted Goods" has to be understood. 14. A careful look at Section 2(33) would show that even prohibited goods could be permitted to be imported or exported subject to some terms and conditions. The moment th....
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....s and detection of illegally imported goods prevention and disposal thereof, morefully described in Sections 11 and 11A of the Act, are also to be treated as prohibited. Goods imported from outside of the territory waters of the country, against any prohibition or restriction under the Customs Act, 1962 or any other law, time being in force, are to be treated as prohibited goods. 75. There is one thing to state that gold is not one of the enumerated prohibited goods and another, to state that goods are not permitted to be brought into the country, by smuggling, which, means any act or omission which would render such goods liable to confiscation under section 111 or section 113. There may not be total prohibition for import of goods, but if import is not done lawfully, in other words against any prohibition or restriction, which are inbuilt in the Customs Act, 1962 or any other law for the time being in force, then such goods should fall within the definition of Section 2(33) of the Act. 76. A conjoint reading Sections 2(33), 11 or 11A of the Act and other provisions in the Customs Act, 1962, and any other law, for the time being in force, would also make it clear that importatio....
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....erefore, those goods, would also fall under the definition of prohibited goods, in terms of Section 2(33) of the Customs Act, 1962. 80. Sub-Section 1A of Section 110 of the Customs Act, 1962, states that, the Central Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification in the Official Gazette, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (1), be disposed of by the proper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified. , cannot be construed to mean that it is mandatory, for the proper officer to immediately release the goods, after seizure, under sub-Section (1) of Section 110A of the Act and thus, dispose of the goods seized. 81. Section 110A, states that, Any goods, documents or things seized under section 110, may, pending the order of the adjudicating officer, be released to the owner on taking a bond from him in the proper form with such securit....
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....nown must be read in the text and context thereof. Whether a statute is directory or mandatory would not be dependant on the user of the words shall or may . Such a question must be posed and answered having regard to the purpose and object it seeks to achieve. 46. .. 47. The construction of a statute will depend on the purport and object for which the same had been used. ... 48. .. 49. Furthermore, a provision in a statute which is procedural in nature although employs the word shall may not be held to be mandatory if thereby no prejudice is caused." (ii) In Ashok Lanka v. Rishi Dixit reported in 2005 (5) SCC 598, para No.53 is relevant, which reads as under:- "53. The question as to whether a statute is mandatory or directory would depend upon the statutory scheme. It is now well known that use of the expression shall or may by itself is not decisive. The court while construing a statute must consider all relevant factors including the purpose and object the statute seeks to achieve. (see P.T.Rajan v. T.P.M.Sahir and U.P.SEB v. Shiv Mohan Singh)." 85. If Sections 110(1A) and 110A of the Customs Act, 1962 were to be interpreted in the manner, as contended by the learne....
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....alid passport, issued under the Passport Act, 1967, who have stayed abroad for six months and above alone are eligible to import gold of foreign origin and clear the same on payment of customs duty, at the rate prescribed. 89. While considering a prayer for provisional release, pending adjudication, whether all the above can wholly be ignored by the authorities, enjoined with a duty, to enforce the statutory provisions, rules and notifications, in letter and spirit, in consonance with the objects and intention of the Legislature, imposing prohibitions/restrictions under the Customs Act, 1962 or under any other law, for the time being in force, we are of the view that all the authorities are bound to follow the same, wherever, prohibition or restriction is imposed, and when the word, restriction , also means prohibition, as held by the Hon'ble Apex Court in Om Prakash Bhatia's case (cited supra). 90. When a claim for provisional release under Section 110A of the Customs Act, is made, in the light of the decision in Lexus Exports Pvt. Ltd's case (cited supra), exercise of such right under Section 110A is only provisional and not absolute. On the culmination of adjudicat....
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.... that it would be appropriate to direct provisional release? 94. Though the argument of the learned counsel for the appellant is that since gold is not notified, as one of the prohibited goods, by way of any notification, in the official gazette and therefore, provisional release can be ordered, we are inclined to accept the said contention, as prohibition/restriction, is inbuilt in the Customs Act, 1962. While considering the objections, on the notification and other provisions, relied on and pressed into service, we cannot reject the objections of the revenue. Sub-Section (d) of Section 111 of the Customs Act, 1962, clearly states that any goods which are imported or attempted to be imported contrary to any provision imposed by any law, for the time being in force, in this country, are liable to be confiscated. Therefore, when prohibitions/restrictions are inbuilt in the statute, or by notifications, relied on by the department, subject to which, goods are to be imported and when there is a failure to comply with the conditions, they are liable for confiscation, for which, in the instant case, a show cause notice has been issued. 95. Under the Customs Act, 1962, the authorities....