TaxTMI 
TaxTMI 
2019 (1) TMI 1806
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....., from China through Kolkata Port and generated Bill of Entry through Customs Electronic Declaration Interchange (EDI). The said goods were assessed by the proper officer of the Customs at the declared rate. In this case the appellant, through its authorized Customs Broker, filed the Bill of Entry on first check basis under EDI system, as the appellant was not certain about the valuation, classification and assessments of the goods imported by them. The proper officer of the Customs marked the examination order stating that "open all the packages and conduct 100 % examination in presence of DRI, check declaration, clearance withheld till further order from DRI". This examination order was given by the Appraising Officer as per Bills of Entry. The consignment got examined by the proper officer along with Officer of the Director of Revenue Intelligence. However, the consignment was not cleared at the instance of DRI which was subsequently seized on 06/01/2018, 12/01/2018, 18/04/2018 and 20/04/2018, under Section 110 of the Customs Act, for pending further investigation. The investigation could not be completed within 6 months from the date of seizure i.e. 06/01/2018 and the Commissi....
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....roviso of Section 110(2) of the Customs Act. Reliance was placed on the Apex Court decision in case of Assistant Collector of Customs, vs. Charan Das Malhotra,[ (1971) 1 SCC 697], it was prayed that on this ground itself the impugned order is required to be set aside by the Tribunal and seized goods were prayed to be released in favour of the appellant forthwith. 7. It is also submitted that while passing the impugned order dated 29^th June 2018, the respondent Commissioner has failed to apply his mind, in not considering the examination report dated 13/10/2017, from which it is clear that the clearance of the said consignment were withheld by the Customs Authority subject to further order of DRI and hence there is no ambiguity that withholding the clearance of the goods and the Custom Authority had detained the same on October 12, 2017. It is also prayed that Ld. Respondent Commissioner also failed to appreciate that the dominion of the said goods imported by the appellant was passed to the Customs Authority with effect from October 13, 2017, and detention of the said goods tantamount to seizure, thereof, hence it was incumbent upon the Customs Authority to issue the Show Cause....
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....he 2[Commissioner of Customs] for a period not exceeding six months. Section 124 in the Customs Act, 1962 124. Issue of show cause notice before confiscation of goods, etc.-No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person- (a) is given a notice in [writing with the prior approval of the officer of customs not below the rank of a Deputy Commissioner of Customs, informing] him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter: Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may at the request of the person concerned be oral. After amendment Section 110(2) of the Customs Act reads as follows; Where any goods are seized under sub-section (1) and no notice in respect there....
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....ide extending the time limit of issuance of Show Cause Notice under Section 110(2) of the Customs Act. Decision of Single Bench was reversed by the decision of Hon'ble Division bench wherein it is held as under; "8. Aggrieved by the two orders of extension passed in the manner aforesaid, the respondent moved the High Court of Calcutta under Art. 226 of the Constitution, contending that the proviso to Section. 110(2) envisaged only one extension, and that therefore, the second extension was invalid. The learned Single Judge, who heard the writ petition, rejected this contention holding that the proviso empowered the Collector to grant as many extensions as the completion of the inquiry and the issuance of the notice under Section. 124(a) required but in no case exceeding six months at a time. The second contention urged by the respondent was that the period of the first extension having expired on January 19, 1964 and no further extension having been granted by that date, he became entitled to restoration-of the said watches and the second order extending the period by two months more granted a month after the expiry of the first extended period would be of no avail to the ....
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.... cause being shown" used in the proviso meant that the Collector had to decide an application for extension judicially, the reason being that the Collector could not fairly and justly determine that a sufficient cause was shown without hearing the pros and cons of the question, and therefore, he had no jurisdiction to grant extension without giving to the respondent an opportunity of being heard. In this connection the Division Bench observed "As long as the period of issuing notice has not expired, it might be one thing. But quite a different set of circumstances arise when the period has expired and the right to the return of the goods is vested in the person from whose possession the goods are seized. If you are to take away the right yon can only do that for a sufficient cause. How can the officer concerned decide as to whether a sufficient cause has been shown, so as, to divest a vested right, unless he hears the parties affected. Even after the supplementary affidavits were filed in this case, it is extremely doubtful whether a sufficient cause has been shown." According to the- Division Bench, even if the Collector's function, tinder the proviso were to....
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....gment of the High Court of Bombay in Prakash Cotton Mills Pvt. Ltd. Vs Assistant Collector of Central Excise, Bombay, Misc. Petn No. 127 of 1963, D/31-8-1970(D/-31-8-1970(BOM), No 127 of 1963, D/- 31-9-1970(Bom), does not throw any further light as it is mostly based on the reasoning of the Mysore High Court. We are not satisfied that as between the right of the person from whom the goods are seized and the supposed danger to the investigation the matter is so weighted down that we would be compelled to hold that the legislature could not possibly have contemplated a judicial approach by the Collector when he orders extension of time, the effect of which would be the deprivation of, or in any event, postponement of the right to restoration. In our view, the first question must be answered in favour of the respondent, and therefore, the Division Bench was right in holding that the power under the proviso was quasi judicial, or at any rate, one requiring a judicial approach, Consequently, an opportunity of being heard ought to have been given to the respondent before orders for extension were made. The High Court, consequently, was justified in ordering restoration of the watches in ....
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....itled to return of the goods. It is that right to the immediate restoration of the goods upon the expiry of six months from the date of seizure that is defeated by the extension of time under the proviso to Section 110(2). When we speak of the right of the person being prejudiced or placed in jeopardy we necessarily envisage some damage or injury or hardship to that right and it becomes necessary to inquire into the nature of such damage or injury or hardship for any case to be set up by such person must indicate the damage or injury or hardship apprehended by such person. In the present case, one possibility is that the person from whose possession the goods have been seized may want to establish the need for immediate possession, having regard to the nature of the goods and the critical conditions then prevailing in the market or that the goods are such as are required urgently to meet an emergency in relation to a vocational or private need, and that any delay in restoration would cause material damage or injury or hardship either by reason of some circumstance special to the person or of market conditions or of any particular quality of requirement for the preservation of the g....
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....ce is issued before the expiry of that period, service of such notice may not be effected on the person concerned in sufficient time to enable the Collector to make the order of extension before that period expires. Service of the notice may be postponed or delayed or rendered ineffective by reason of the person sought to be served attempting to avoid service of notice or for any other reason beyond the control of the Customs authorities. In that event, it would be open to the Collector, if he finds that sufficient cause has been made out before him in that behalf to extend the time beyond the original period of six months, and thereafter, after notice has been served on the person concerned, to afford a postdecisional hearing to him in order to determine whether the order of extension should be cancelled or not. Having regard to the seriousness and the magnitude of injury to the public interest in the case of the illicit importation of goods, and having regard to consideration of the damage to economic policy underlying the formulation of import and export planning, it seems necessary to reconcile the need to afford an opportunity to the person effected with the larger considerati....
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....h covers the topic confiscation of goods and imposition of penalties. The subject of investigation and that of confiscations and imposition of penalties are ex facie exclusive of each other, the goal of each being different. A Constitution Bench of this Court in I.J. Rao, Asstt. Collector of Customs and Others v. Bibhuti Bhushan Bagh and Another [1989 (3) SCC 202 = 1989 (42) E.L.T. 338 (S.C.)] while interpreting Section 110(2) proviso of the Act has held that when wanting to extend period beyond six months in respect of seizure of goods, the Collector must serve notice on and afford hearing to the owner of the goods before deciding grant of extension, as his right to restoration of his goods after six months is defeated by the order of extension. It has also viewed that where rights of a person are adversely and prejudicially affected by an order made by an authority in a proceeding, such person is entitled to a predecisional notice irrespective of whether the proceeding is judicial, quasi-judicial or administrative in nature. Earlier in point of time in The Asstt. Collector of Customs and Others v. Charan Das Malhotra [1971 (1) SCC 697 = 1983 (13) E.L.T. 1477 (S.C.)], this Court o....
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.... person who was found in possession as Section 110 does not put any restriction on the power of the respondent nos. 1 and 2 to seize goods where they are in custody of a person other than the importer of the goods. However, a safeguard has been inserted by sub-section (2) of Section 110 that where goods are seized under sub-section (1), show cause notice under Section 124(a) shall have to be issued within 6 months or the extended period of further 6 months. The short question for our consideration is whether issuing of a notice to the owner-original importer of the goods is enough or whether notice is also required to be issued to the person from whose custody the goods are seized. 10. It is axiomatic to say that where civil rights of a person are likely to be affected by an administrative or quasi-judicial order, rules of natural justice require that the person affected be given a reasonable opportunity of being heard before the order is passed unless the statute under which the order is passed specifically excludes such opportunity. Even where the statute specifically excludes the opportunity of being heard, Courts would be entitled to consider the legality and constitut....
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.... any event, would render the validity of the section susceptible to challenge on the ground of being unreasonable and violative of rights of the person in possession of being denied the opportunity of even being heard before his rights are affected. We are clearly of the view that the person from whose custody the goods have been seized under Section 110 of the Act is entitled to a notice under Section 124 of the Act and is entitled for a reasonable opportunity of making a representation and reasonable opportunity of being heard before an order of confiscation of goods is passed. In the present case, admittedly no notice under Section 110(2) read with 124 of the Act has been issued to the petitioner within a period of 6 months. In fact the notice has not been issued till today. Consequently, the continued detention of the goods seized beyond the statutory period of 6 months (which can be extended up to one year) under Section 110(1) of the Act is illegal. The reliance was placed on the Charan Das malhotra's case(supra). 11. Wherein the Supreme Court held that on failure to issue show cause notice within 6 months, a civil right accrued to the respondent to have possession o....
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....ng, this flows from the circumstances that this is a quasi judicial proceeding, and also it goes beyond the doubt that rights of a person are likely to prejudicially affected, he is entitled to opportunity to put forwarded his case before the Adjudicating Authority. Therefore, the person from whom the goods have been seized, is entitled to notice of the proposal before Adjudicating Authority for the extension of original period of the six months under Section 110(2) of the Customs Act subject to the restriction that he is not entitled to the information about the investigation which is in possession of the Investigating Agency as there can be no right in any person to be informed whose goods during the investigation material collected against him and there is no need for maintaining the investigation proceedings. This view has been affirmed in the I G Rao case referred(supra). The provisions of Section 110(2) before and after the amendment is as identical but for "on sufficient cause being shown has been replaced with reasons to be recorded in writing extends such period", for a period not exceeding six months and inform the person from whom such goods were seized before expiry of ....