Bombay High Court
Case BriefsHigh Courts

Bombay High Court: In an appeal filed by Commissioner of Customs (Import) (‘appellant’) challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (CESTAT), directing provisional release of the seized goods in the shape of iPhones in purported exercise of powers under Section 110-A of Customs Act, 1962, a Division Bench of Dhiraj Singh Thakur and Abhay Ahuja JJ. set aside the impugned order as Dinesh Bhabootmal Salecha (‘respondent’) seeking release of the seized goods, was found to be an ‘importer’ and not ‘owner’ of the goods. The clear mandate of Section 110-A Customs Act, 1962 states that goods could be permitted to be released only in favour of an owner and the respondent failed to establish his ownership over the seized goods during the proceedings.

Based upon an intelligence input, the consignment (under challenge) was supposed to contain Memory Module of 4GB, 8GB and 32GB D-RAM valuing Rs. 80 Lakhs approximately, but on inspection was found to contain 3800 iPhones valuing approximately Rs. 42 Crores. Since the goods were mis-declared, the goods were seized under Section 110-A of Customs Act.

An application under Section 110-A of Customs Act was filed which was rejected by the adjudicating authority due to lack of evidence regarding ownership by Salecha Electronics Inc/Dinesh Bhabootmal Salecha. Assailing this, an appeal was preferred before CESTAT which was thereby allowed. and provisional release of the goods were directed. The Tribunal held that even when an ‘owner’ had not been defined in the Customs Act yet, the term ‘owner’ was deployed in the definition of an ‘importer’ under Section 2(26) of Customs Act and by default, ownership could be claimed by an ‘importer’.

On the contention of the respondent that the authorities had considered the Respondent to be an owner because the show cause notice was issued to him in terms of Section 124 Customs Act, the Court noted that on a perusal of Section 124 Customs Act, it can be seen that issuance of a show cause notice in terms of Section 124 does not necessarily establish that the person in whose name it is issued, is necessarily the owner.

The Court further noted that on a careful reading of Section 110-A of Customs Act, it is abundantly clear that goods seized may be released to the owner. The said section does not include or envisage release of goods provisionally in favor of an ‘importer’ of goods much less does it envisage, a release in favor of ‘any person’, in addition to the ‘owner’ as mentioned in Section 124 of Customs Act, who has been served a notice under the said section.

The Court held that the Tribunal has committed an error in importing the definition of an ‘importer’ as defined under Section 2(26) of Customs Act and reading the same in Section 110-A of Customs Act.

[Commissioner of Customs (Import) v. Dinesh Bhabootmal Salecha, 2022 SCC OnLine Bom 1808, decided on 08-09-2022]


Advocates who appeared in this case :

Mr. Advait Sethna a/w Mr. Rangan Majumdar i/b Ms. Ruju Thakker, Advocates, for the Appellant;

Mr. Prakash Shah a/w Mr. Jas Sanghavi i/b PDS Legal, Advocates, for the Respondent.


*Arunima Bose, Editorial Assistant has put this report together.

Chhattisgarh High Court
Case BriefsHigh Courts

Chhattisgarh High Court: Goutam Bhaduri, J., allowed the petition and directed the vehicle to be released on certain conditions. 

The brief facts of this case are that on receiving information, a vehicle was intercepted and from the vehicle illicit liquor to the extent of 34.54 bulk litres was seized. Thus, the case was registered under Section 34(2) of the Chhattisgarh Excise Act, and the liquor as also the vehicle were seized by the police allegedly for transporting illicit liquor, as such proceeding under Section 47-A(3) of the Act was drawn for confiscation of the vehicle. Further, the Collector, who is authorised under Section 47-A(3) started a confiscation proceeding for the vehicle. During such a confiscation proceeding, an application was filed by the petitioner who is the owner of the vehicle to release the vehicle and interim custody of the vehicle were sought for, which was dismissed. Therefore, the instant petition.

Counsel for the petitioner submitted that the confiscation proceeding though having been commenced does not put any bar to release the vehicles into interim custody. He further submitted that till the confiscation proceeding is concluded, the vehicle should have been handed over to the applicant. It is submitted that no necessary useful purpose would be served by keeping the vehicle in the custody except the loss caused to it.

The Court observed that the confiscation proceeding under the Act is governed by Section 47-A(3) of the Act and Section 47-A(2) of the Act regulates the power and procedure to be adopted for confiscation.

The Court further observed that perusal of Section 47-A(2) would show that power has been given to the District Magistrate (Collector) upon production of the article and on having satisfied that offence covered under clause (a) or clause (b) of sub-section (1) of Section 34 has been committed and if liquor is more than 5 bulk litres he may order for confiscation of articles, intoxicants, implements, utensils including the conveyance so seized. The Court records that during pendency of the proceeding he may pass an order of interim nature for custody, disposal etc. of the confiscated intoxicants, articles, implements, conveyance as may appear to be necessary in the facts of this case. Section 47-B of the Act provides for appeal against the order of confiscation. Therefore, it necessarily leads that order of confiscation can only be challenged when it reaches its finality and the statute do not give any space to challenge any other order except the final one. It is a settled proposition of jurisprudence that every wrong will have a remedy. So if the order is found to be wrong then certainly the High Court would have all the power to correct the same.

The Court relied on judgment Sunderbhai Ambalal Desai v. State of Gujarat, (2002) 10 SCC 283 and observed that no reasons have been assigned for rejection in the impugned order and only it is stated that since vehicle was found in transporting illicit liquor as such it is not feasible to hand over the vehicle to the petitioner. So for all practical purposes vehicle is lying at the disposal of authorities or at police station. Thus, if it is kept in the police station it must be occupying space or is prone to cause natural decay and may lose its road worthiness when kept in a stationary position.

The Court thus held “vehicle be released in favour of petitioner by way of interim measure, if the confiscation proceedings have not been concluded till date of production of this order”[Shyam Bihari Yadav v. State of Chhattisgarh, WPCR No. 372 of 2022, decided on 26-04-2022]


Appearances:

For Petitioner: Shri T.K. Jha

For Respondent/State: Shri Ajay Kubrani


Arunima Bose, Editorial Assistant has reported this brief.

Chhattisgarh High Court
Case BriefsHigh Courts

Chhattisgarh High Court: Rajani Dubey, J., dismissed the petition being devoid of merits.

The facts of the case are that a tractor and trolley was found carrying illegal timber woods in Tamor Pingla Sanctuary Area, Sarguja Forest Circle, Ambikapur. The said vehicle was driven by driver and the owner of the vehicle was also present. After interrogation by the Forest Officer, an offence punishable under Sections 27, 29, 31, 50 & 52 of the Wild Life (Protection) Act, 1972 and Section 26 (1) (e) (f) of the Indian Forest Act, 1927 was registered against the driver and owner of the said and thereafter the said vehicle including timbers was seized. Thereafter, show cause notice was given regarding confiscation of the vehicle and finding the reply unsatisfactory, confiscation order was passed. Against the said order of confiscation, the petitioner filed appeal before the respondent 2, which was dismissed, against which the petitioner filed criminal revision before the learned 3rd Additional Sessions Judge, Ambikapur, District Sarguja which too was dismissed. Hence, present petition under Article 226 of the Constitution of India has been filed.

Counsel for the petitioner submitted that the accused persons have been acquitted by the Criminal Court, thus no offence has been proved against the petitioner and therefore the proceeding of confiscation of the vehicle is illegal and arbitrary.

The Court observed that a bare reading of Section 52, Indian Forest Act, 1927 makes it clear that Forest Officer has power to confiscate the vehicle and the Competent Authority after giving show cause notice to the petitioner.

The Court observed that the  ASJ in the impugned order clearly held that criminal trial and confiscation proceedings may run simultaneously and once the information of confiscation proceeding under Section 52 (e) of the Indian Forest Act is given to the District Magistrate, then the Trial Magistrate has no power regarding confiscated vehicle of being released, disposed etc. and it has been further held that the information of confiscation proceeding was already given to the Chief Judicial Magistrate, Ambikapur and the accused were given ample opportunity of being heard and only thereafter the orders were passed and thereby dismissed the criminal revision of the petitioner.

The Court held “the finding of the learned ASJ that the criminal trial and confiscation proceeding are different proceedings and they may run simultaneously and even after acquittal of the accused persons, the vehicle was found to be involved in transportation of illegal timbers and the same was liable to be confiscated and the accused were given ample opportunity of being heard, is based on proper appreciation of provisions of law and facts as well, which cannot be interfered with by this Court.”

[Gend Lal Kushwaha v. State of Chhattisgarh, 2022 SCC OnLine Chh 617, decided on 01-04-2022]


Arunima Bose, Editorial Assistant has reported this brief.

Case BriefsSupreme Court

Supreme Court: In a case where the District Magistrate had directed confiscation of a Truck under the M.P. Prohibition of Cow Slaughter Act, 2004 despite the criminal proceedings having culminated into acquittal, the bench of KM Joseph and Hrishikesh Roy*, JJ has held that in a case where the offender/accused are acquitted in the Criminal Prosecution, the judgment given in the Criminal Trial should be factored in by the District Magistrate while deciding the confiscation proceeding.

Explaining the scheme of the 2004 Act read with the provisions of CrPC, the Court observed that the objective of the M.P. Prohibition of Cow Slaughter Act, 2004 is punitive and deterrent in nature. Section 11 of the 2004 Act and Rule 5 of M.P Govansh Vadh Pratishedh Rules, 2012, allows for seizure and confiscation of vehicle, in case of violation of sections 4,5,6, 6A and 6B.

“The confiscation proceeding, before the District Magistrate, is different from criminal prosecution. However, both may run simultaneously, to facilitate speedy and effective adjudication with regard to confiscation of the means used for committing the offence.”

Further, the District Magistrate has the power to independently adjudicate cases of violations under Sections 4, 5, 6, 6A and 6B of the 2004 Act and pass order of confiscation in case of violation. However, in a case where the offender/accused are acquitted in the Criminal Prosecution, the judgment given in the Criminal Trial should be factored in by the District Magistrate while deciding the confiscation proceeding.

Hence, applying the aforementioned law at the case at hand, it was held that the appellant’s truck, loaded with cow progeny, was confiscated on account of the criminal proceedings alone and therefore, under the applicable law, the vehicle cannot be withheld and then confiscated by the State, when the original proceedings have culminated into acquittal. Noticeably, it is also not the projected case that there is a likelihood that the appellant’s truck will be used for committing similar offence.

In the present case, the order of acquittal was passed as evidence was missing to connect the accused with the charges.

“The confiscation of the appellant’s truck when he is acquitted in the Criminal prosecution, amounts to arbitrary deprivation of his property and violates the right guaranteed to each person under Article 300A. Therefore, the circumstances here are compelling to conclude that the District Magistrate’s order of Confiscation (ignoring the Trial Court’s judgment of acquittal), is not only arbitrary but also inconsistent with the legal requirements.”

The Court also rejected State Counsel’s submission that the burden of proof is on the truck owner in the process of confiscation, and observed that Section 13A of the 2004 Act, which shifts the burden of proof, is not applicable for the confiscation proceedings but for the process of prosecution. By virtue of Section 13A of the 2004 Act, the burden on the State authority to legally justify the confiscation order, cannot be shifted to the person facing the confiscation proceeding.

“By reason of an order of confiscation, a person is deprived of the enjoyment of his property. Article 300A of the Constitution provides that no person shall be deprived of his property save by authority of law. Therefore, to deprive any person of their property, it is necessary for the State, inter-alia, to establish that the property was illegally obtained or is part of the proceeds of crime or the deprivation is warranted for public purpose or public interest.”

[Abdul Vahab v. State of Madhya Pradesh, 2022 SCC OnLine SC 262, decided on 04.03.2022]


*Judgment by: Justice Hrishikesh Roy


Counsels

For appellant: Advocate Pulkit Tare

For State: Advocate Abhinav Shrivastava

Case BriefsHigh Courts

Allahabad High Court: Dr Yogendra Kumar Srivastava, J., held that the Magistrate is denuded of his power to pass any order under Sections 451, 452 and 457 CrPC for release of a vehicle seized for alleged violation of provisions of the U.P. Prevention of Cow Slaughter Act.

Instant application was filed under Section 482 of the Code of Criminal Procedure, 1973 to set aside the decision of Additional Sessions Judge passed in case under Sections 3/5-A/8 of the Uttar Pradesh Prevention of Cow Slaughter Act, 1955 and Section 11 of the Prevention of Cruelty to Animal Act, 1960.

An FIR was lodged under the above-stated sections, the vehicle stated to be carrying the animals was seized under Section 5-A of the PCSA and the applicant who claimed to be the owner of the vehicle in question, filed an application before the court of ACJM-I, Ballia, seeking release of the vehicle, which was rejected.

Analysis, Law and Decision

The Uttar Pradesh Prevention of Cow Slaughter Act, 1955 is an Act to prevent the slaughter of cows and their progeny in the State of Uttar Pradesh.

Section 5-A of the PCSA would indicate that the transportation of cow, etc., is regulated in terms thereof. Sub-section (1) of Section 5-A contains a clear prohibition on transportation of any cow or bull or bullock, the slaughter whereof in any place in Uttar Pradesh is punishable under the Act, from any place within the State to any place outside the State, except under a permit to be issued by an officer authorised by the State Government in this behalf by notified order and except in accordance with the terms and conditions of such permit. Sub-section (4) mandates that the form of permit, the form of application therefor and the procedure for disposal of such application shall be such as may be prescribed.

Confiscation and Seizure

PCSA is a “local law” within the meaning of Section 5 of the Code and in view thereof, the general provisions contained under Sections 451 of the Code with regard to custody and disposal of the property pending trial or the power for making an order for disposal of property at the conclusion of trial under Section 452 or the procedure under Section 457 would therefore, be subject to the powers exercisable under Section 5-A of the PCSA which makes a special provision with regard to confiscation and seizure of the vehicle used for transport in contravention of the provisions of the Act.

Bench held that the vehicle in question having been confiscated and seized in exercise of powers under Section 5-A of the PCSA, which was in the nature of a special Act and a local law under Section 5 of the Code, the same would clearly have the effect of denuding the magistrate his power to pass any order under Sections 451, 452 and 457 of the Code for release of the vehicle seized for alleged violation of the provisions of the Act.

Therefore, the application under Section 482 of the Code was dismissed. [Yas Mohammad v. State of U.P., 2021 SCC OnLine All 608, decided on 2-09-2021]


Advocates before the Court:

Counsel for Applicant:- Ramesh Kumar Chaurasia

Counsel for Opposite Party:- G.A.

Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): P.K. Choudhary (Judicial Member) partly allowed an appeal which was filed against the Order-in-Appeal whereby two separate appeals of the appellant against two Orders-in-Original had been dismissed. The basic issue recorded by the Commissioner (Appeals) was whether confiscation of goods and imposition of fine and penalty by the Lower Authority in absence of valid PSI certificate was maintainable.

It was contended on behalf of the appellant that the imported goods were declared as Tin Waste and Scrap (Light Melting Scrap) in accordance with the import documents provided by the foreign supplier. Only during 100% examination after import, a Chartered Engineer was appointed who opined on visual examination that the goods are Tin Plated Steel Scrap as steel predominates by weight. It was contended that prior to such inspection, it was not possible for the appellant to verify the actual nature of goods being supplied by the foreign supplier. The counsel for the appellant further submitted that there was neither any knowledge nor reason to believe on the part of the appellant herein w.r.t. the alleged mis-declaration of the goods so imported. He further submitted that the goods imported during January, 2013 were of no material value as on date and as such, the appellant was no more interested in getting release of the goods against the redemption fine as imposed by the Adjudicating Authority.

The Tribunal after perusing the records found that the goods declared as Tin Waste and Scrap (Light Melting Scrap) were on verification by the qualified Chartered Engineer certified as Tin Plated Steel Scrap since steel predominates by weight. The appellant had not asked for any re-test or alike at the relevant point of time. On the contrary the appellant/ importer had waived his right of show cause notice and/or hearing at the stage of adjudication and hence, the contention on behalf of the appellant before me that the certificate was issued by the Chartered Engineer on visual examination, cannot come to rescue of the appellant with regard to the proper description of the goods. The Tribunal reminded that importation was permitted only against Pre Shipment Inspection

Certificates and it was settled position of law that conditions for import, if not fulfilled, the importation was not permitted. The Tribunal further explained that when goods imported or exported without complying with the conditions subject to which such goods are permitted for export and import, the goods shall be rendered as ‘Prohibited Goods’.

The Tribunal while partly allowing the appeal explained that at the time of importation of the goods, admittedly, Pre Shipment Inspection Certificates were not available and the goods were wrongly described as scrap of tin instead of scrap of steel. The appellant could not even produce such certificates prior to adjudication and thus the order of confiscation of the imported goods was proper and correct under Section 111(d) of the Customs Act, 1962 and thus upheld on the other hand the law requires existence of mens rea and maintenance of balance of convenience prior to imposition of penalty upon any person and in the present case there was no existence of ingredient of section 112 of the Customs Act, 1962 nor any mens rea and hence, the imposition of penalty upon the appellant was bad in law and liable to be quashed.[Sanjay Kumar Agarwal v. Commr. Of Customs, 2020 SCC OnLine CESTAT 397 ; decided on 23-12-2020]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Gujarat High Court:  A Division Bench of Harsha Devani and Bhargav D. Karia, JJ. partially allowed a stay order for the release of diamonds confiscated by the Customs Department after imposing fine and some subsequent conditions. 

Custom Department seized rough diamonds valued at Rs 1,05,58,474 from the respondent herein for importing the same without Kimberley Processing Certificate (KPC), which is necessary for importing diamonds in India. The Adjudicatory Authority ordered absolute confiscation of the diamonds. Later, Customs, Excise and Service Tax Appellate Tribunal (CESTAT) reversed the order passed by the Adjudicatory Authority and ordered the release of the diamonds. The present application was filed by the Customs Department requesting a stay on the order of CESTAT.

Learned Counsel for the appellant, Dhaval D. Vyas, contended that an immediate stay should be put on the order passed by CESTAT because the respondent had failed to show lawful possession of diamonds. Furthermore, he had failed to show that the diamond had been imported after obtaining the KPC certificate, and in absence of the same, the Customs Department had discretionary authority in confiscating the diamonds. He further contended that the release of diamonds would put them into and irreversible situation.

Opposing the application, Paresh Dave, learned advocate for the respondent, submitted that the seized goods, namely, rough diamonds were not harmful goods and have no impact on the society. Moreover, rough diamonds are freely importable and are not dutiable. Thus, the violation committed was not so grave that the respondent should be deprived of his property and, therefore, redemption may be allowed subject to conditions. He relied on the judgment of the High Court in Commr. of GST v. Dharmesh Pansuriya, Tax Appeal No. 62 of 2018, dated 22-2-2018, wherein the Court had  permitted the gold bars valued at Rs 6.75 crores to be released upon payment of redemption fine of Rs 40 lakhs [5.92 per cent of the value of goods] and penalty of Rs 6 lakhs [1 per cent of the value of goods] and bank guarantee of Rs 1 crore.

The Court after hearing both the sides observed that to protect the interest of the revenue, the goods may be permitted to be released subject to certain conditions. Such conditions would be in line with the earlier orders. The Court finally ordered the release of the diamonds after paying 10 per cent as redemption fee and 1 per cent as fine. The Court further added that the respondent shall also file an undertaking before this Court that in the event, the applicant succeeds in the appeal and if absolute confiscation of the goods is ordered or the respondent is held liable to pay an amount more than the amount paid under this order, the respondent shall pay the differential amount that he may become liable to pay under such order.[Commr. of Custom v. Pravin R. Ajudiya, 2019 SCC OnLine Guj 808, decided on 08-05-2019 ]