Allowed

Md.Mazid @ Md.Tufani and Anr. v. the Union of India and Ors.

Patna HC17 May 2013CWJC/1163/2012

Case brief

AI extract

What is this about?

Petitioner challenged confiscation of betel nuts under Customs Act for non-application of mind by adjudicating authority regarding Section 125 option to pay fine. Court held writ maintainable despite alternative remedy due to jurisdictional error and quashed order.

What did the court decide?

Writ application allowed; matter remanded to adjudicating authority to decide option to redeem goods on payment of fine under Section 125 within four weeks after hearing.

Md.Mazid @ Md.Tufani and Anr. Vs the Union of India and Ors. — Customs and Excise | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.1163 of 2012

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====================================================== 1. Md. Mazid @ Md. Tufani Son Of Late Md. Jaan Resident Of Dallu Tola, Ward No. 18, P.S. Farbisganj, District Araria, Bihar

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M/S Him Sagar Upbhokta Bhandar Swablambi Sahkari Samiti Ltd., Rahmat Market, P.S. Farbisganj, District Araria, Bihar Through Its President Md. Mazid @ Md. Tufani Son Of Late Md. Jaan Resident Of Dallu Tola, Ward No. 18, P.S. Farbisganj, District Araria, Bihar

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.... .... Petitioner/s

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Versus 1. The Union Of India Through Commisisoner, Customs, Central Revenue Building, Birchand Patel Path, Patna 2. The Additional Commissioner, Preventive Customs (Hqrs) 4th Floor, Central Revenue Building, Patna Null Null 3. The Deputy Director, Directorate Of Revenue Intelligence, Regional Unit Patna 4. The Superintendent (Adjudication), Customs (Hqrs), 5th Floor, Central Revenue Building, Birchand Patel Path, Patna 5. The Senior Intelligence Officer Cum Seizing Officer Directorate Of Revenue Intelligence, Sub Regional Unit, 1st Floor, Custom Office Building, Muzaffarpur, Bihar

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.... .... Respondent/s

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====================================================== Appearance :

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For the Petitioner/s : Mr. Prabhat Ranjan For the Respondent/s : Mr. Devendra Kumar

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====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER

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11 17-05-2013 Heard learned counsel for the petitioner and learned counsel for the Customs Department.

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The petitioner seeks quashing of the order dated 30.11.2011 passed by the Additional Commissioner, Preventive, Customs (Headquarters), Patna, by which he has ordered for confiscation of the seized goods, i.e., betel nuts of third country origin brought through Nepal valued at Rs.27,42,000/- under

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Patna High Court CWJC No.1163 of 2012 (11) dt.17-05-2013

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section 111 (d) of the Customs Act, 1962.

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Learned counsel for the respondent at the outset submits that the petitioner has alternative remedy of appeal available under the Customs Act and thus the writ petition ought to be dismissed on the said ground.

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Learned counsel for the petitioner, on the other hand, submits that the petitioner has raised a jurisdictional issue in the matter as the adjudicating authority has failed to apply its mind to the issue in question as required by Section 125 of the Customs Act while passing the order of confiscation.

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It is submitted by learned counsel for the petitioner that where the importation or exportation of any goods is prohibited even in that case the adjudicating authority is required to exercise his discretion regarding giving option to pay fine in lieu of confiscation as the said officer thinks fit, whereas according to learned counsel for the petitioner the betel nuts are not prohibited items and they are importable into the country in terms of the Government notification dated 4.2.2008 and thus in that case the adjudicating authority was obliged to give the petitioner an option to pay fine in lieu of confiscation.

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Learned counsel for the Customs Department is unable to show that the adjudicating officer has at least applied his mind to

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Patna High Court CWJC No.1163 of 2012 (11) dt.17-05-2013

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the question of granting the option to pay fine in lieu of confiscation.

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Section 125 of the Customs Act is as follows:-

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“125. Option to pay fine in lieu of confiscation-

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(1) Whenever confiscation of any goods is authorized by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof 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:

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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.

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(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

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Patna High Court CWJC No.1163 of 2012 (11) dt.17-05-2013

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addition, be liable to any duty and charges payable in respect of such goods.”

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It is evident from a perusal of the said provision that where importation or exportation of goods is prohibited under the Act or under any other law then the owner of the goods may be given an option to pay fine in lieu of confiscation whereas if such importation or exportation is not prohibited then the adjudicating authority is obliged to give such an option to pay a fine in lieu of confiscation to the owner of the goods.

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Thus in any view of the matter, even in the case of prohibited goods if any order is passed for confiscation then the adjudicating authority is at least required to apply its mind to the question as to whether it was a fit case for granting an option to the petitioner to pay fine in lieu of confiscation of goods.

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The impugned order does not disclose any such application of mind. Thus, it clearly suffers from failure to exercise the jurisdiction given to the adjudicating authority by the Customs Act.

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In the aforesaid view of the matter, the submission of learned counsel for the Customs Department that the writ petition is barred by the existence of alternative remedy cannot survive. As

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Patna High Court CWJC No.1163 of 2012 (11) dt.17-05-2013

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held repeatedly by the Apex Court and this Court where error of jurisdiction or question of non-compliance of the principles of natural justice arises then the plea of existence of alternative remedy can have no application. In this regard, reference may be made to the decision of the Supreme Court in the Case of Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others: (1998) 8 SCC-1.

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In the aforesaid view of the matter, the writ application is maintainable.

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Since I propose to remand the matter to the adjudicating authority to also decide the issue as to whether the betel nuts in question are prohibited or not, the discretion has to be exercised keeping in view all aspects of the matter.

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In this regard, learned counsel for the petitioner makes a reference to an order bearing in C.No.VIII (10) 69CUS/ADC/DRI/2012/1746 dated 13.3.2013 by the same adjudicating authority in which with respect to the seized betel nuts of third country origin he has given the option to redeem the same on payment of fine.

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The writ application is, accordingly, allowed and the matter is remanded to the adjudicating authority to pass an order with regard to the grant of option to redeem the goods on paying

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Patna High Court CWJC No.1163 of 2012 (11) dt.17-05-2013

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fine in lieu of confiscation of the said goods in terms of Section 125 of the Customs Act.

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Let the said order be passed within a period of four weeks from the date of receipt/production of a copy of this order after giving an opportunity of hearing to the petitioner in the matter on the legal and other issues involved.

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It is made clear that since Section 125 of the Act itself prescribes the maximum fine that can be imposed, including the duty chargeable thereon, accordingly, the adjudicating authority is required to show the calculation as to how he has arrived at the figure of fine in his order.

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(Ramesh Kumar Datta, J)

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V.P.Sinha/-

Md.Mazid @ Md.Tufani and Anr. v. the Union of India and Ors.

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Md.Mazid @ Md.Tufani and Anr. v. the Union of India and Ors.

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