TaxTMI 
TaxTMI 
1992 (5) TMI 20
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....om detaining him in pursuance of the above order. This writ petition as well as an appeal therefrom have been dismissed : hence the present Special Leave Petition. 2. According to the petitioner, the detention order has been issued in consequence of certain proceedings which had been initiated against him by the customs officials. He says that the Company imported 267.782 metric tons of Ethyle Hexanol (EHA). This consignment was unloaded at Kandla Port and 24 tankers thereof were transported to bonded warehouses after assessment to duty in October-November 1989. Out of the chemical thus kept in the bonded warehouse the company cleared 175 metric tons between December '89 and October '90 on payment of duty. The company also imported 204 M.T. of P.V.C. Resin from France on 2-5-1990. This consignment was unloaded at Calcutta Port and was cleared for bonded warehousing. Out of this 75 metric tons of P.V.C. resin were cleared by the company after payment of duty on 7-9-1990, 17-9-1990 and 8-11-1990 under the supervision of the Customs officials. According to the petitioner the warehouses were kept under lock and key and the key was in the custody of customs officials. 3. Sometime ....
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....fore the detention order is served or the detention is effected but that such power will be exercised sparingly and in exceptional cases of the type enunciated therein. The Court observed : "It is not correct to say that the courts have no power to entertain grievances against any detention order prior to its execution. The courts have the necessary power and they have used it in proper cases as has been pointed out above, although such cases have been few and the grounds on which the courts have interfered with them at the pre-execution stage are necessarily very limited in scope and number, viz., where the courts are prima facie satisfied (i) that the impugned order is not passed under the Act under which it is purported to have been passed, (ii) that it is sought to be executed against a wrong person, (iii) that it is passed for a wrong purpose, (iv) that it is passed on vague, extraneous and irrelevant grounds or (v) that the authority which passed it had no authority to do so. The refusal by the courts to use their extraordinary powers of judicial review to interfere with the detention orders prior to their execution on any other ground does not amount to the abandonment of....
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..... The learned Single Judge in the High Court dismissed the writ petition on the short ground that, on the facts disclosed in the petition, the present case prima facie fell within the scope of the expression `smuggling' as defined in the Act. The Division Bench came to the conclusion that the circumstances referred to in the petition were not sufficient to constitute `smuggling'. Nevertheless, the Court took the view that without the grounds of detention it will not be proper for the courts to go into the validity or otherwise of the order of detention or make any pronouncement that the impugned order has not been passed under the Act under which it is proposed to have been passed or that it was passed with a wrong purpose or was passed on vague, extraneous or irrelevant grounds. 6. We have heard Shri Ashoke Sen, learned counsel for the petitioner and Shri Subba Rao, learned counsel for the respondent at considerable length. Sri Ashoke Sen contends that the Division Bench of the High Court having accepted the petitioner's contention that his activities do not constitute `smuggling' ought to have straightaway quashed the detention order. He points out that the goods in question h....
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....s been smuggling by the company, and an abetment of smuggling by the petitioner. It is difficult to say on the broad conspectus of facts and the special definition clauses in the relevant statutes that the proposed detention in this case is totally outside the provisions of the statute. If there is prima facie, smuggling or abetment of smuggling, it is open to the competent authorities to issue a detention order which may be challenged later on the merits on any grounds that may be available but it cannot be said that the action is flagrantly in violation of the statute or that the order is one not made under the provisions of the statute under which it has been purportedly issued. 8. Realising the direct impact of the relevant statutory provisions on the sparse facts stated by the petitioner, Shri Ashoke Sen has elaborated contentions before us which have found favour with the Division Bench of the High Court to demonstrate that the facts alleged do not bring the present case within the statutory provisions. According to him, Section 111(j) comes into operation only in a case where no duty has been assessed on goods and the goods are allowed to be deposited in a warehouse under....
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....he Customs Act. 10. Shri Sen has urged three considerations in support of his plea to limit the scope of S. 111(j) as urged by him. The first is that the operation of `import' is concluded once the goods are assessed to customs duty and cleared from the customs area and the concept of `smuggling' can have no meaning in respect of such goods thereafter. This is not quite correct. Even the general concept of smuggling contains two elements : one, the bringing into India of goods the import of which is prohibited; and two, the bringing into the country's trade stream, of goods the import of which is permitted without paying the customs duties with which they are chargeable. In our view, the second eventuality can occur not only where there is a clandestine import evading the assessment of duty but also where there is a clandestine removal without payment of the assessed duty. In a case where the goods are warehoused under S. 49 and they are clandestinely removed, there would be `smuggling' as the duties payable thereon have been evaded altogether. But even in a case where the goods are assessed to duty and allowed to be warehoused under S. 59, a clandestine removal can result in lo....
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....) inserted w.e.f. 27-12-1985. It may also attract S. 72 but this cannot, however, be decisive of the interpretation of S. 111(j). In the decision referred to by counsel which arose under the Sea Customs Act, 1878 smuggled goods were confiscated and, in addition, the smuggler was called upon to pay the duties on the goods. The Court held that the question of a levy of import duties did not arise as there was no statutory provision covering the facts of that case enabling such levy. This decision is no authority for the proposition that S. 111(j) is inapplicable to a case to which S. 72 is applicable. Even if one assumes that S. 72 will not be applicable where the goods are confiscated the position only come to this, that the authorities have to choose, having regard to all the circumstances, between confiscating the goods on the one hand or collecting the duties payable thereon on the other. Having regard to the language of S. 111(j), it is not possible to agree with counsel that, in such a case, the goods are not liable to confiscation merely because an alternative recourse to S. 72 is available to them. 12. The third point made by Shri Sen is that once goods are cleared by the ....