Case Note & Summary
The appellant, a trading company, imported 1,65,000 Chinese silver dollars from Tibet into India via Sikkim State under two Reserve Bank import licences. The dollars were divided into two lots, one marked 'H.D.' and the other 'H.N.'. Two import applications (No. 32 for 'H.N.' and No. 34 for 'H.D.') were made to the Land Customs Station, Kalimpong. The goods were examined, duty paid, and permits granted on May 16, 1957. The consignments were then transported to Siliguri and handed to a carrier for air transport to Dum Dum. On May 17, one consignment (presumably the one intended to be 'H.N.') along with application No. 34 was flown to Calcutta and delivered to the appellant. On May 18, the second consignment, marked 'H.D.', was seized at Sonapur airstrip when it was about to be despatched, because the accompanying application was No. 32 (which related to the 'H.N.' lot). The Range Officer seized the goods under s.5(3) of the Land Customs Act, 1924, believing the marks did not match the permit. The Collector of Land Customs, Calcutta, issued a show-cause notice alleging offences under ss.5(3), 7(1) of the Land Customs Act and s.167(8) read with s.19 of the Sea Customs Act, 1878, as made applicable by s.23A of the Foreign Exchange Regulation Act, 1947. The appellant explained that the carriers had inadvertently interchanged the permits. The Collector rejected this explanation, found the appellant guilty, and ordered confiscation. The appellant's appeals to the Central Board of Revenue and the Government of India were dismissed. The appellant then filed a writ petition in the Punjab High Court; a single judge dismissed it, and a Division Bench upheld the dismissal in Letters Patent Appeal. The Supreme Court was approached with a certificate under Article 133. The main legal issues were whether s.5(3) of the Land Customs Act justified the seizure and confiscation, and whether the findings of offences were perverse. The Court held that s.5(3) does not require that imported goods be always accompanied by a permit; once customs clearance is given and the goods enter India, the permit need not travel with the goods. The fact that the 'H.D.' consignment was found with application No. 32 was explained by the carrier's inadvertence; there was no evidence of smuggling or lack of valid import licences. The Collector's contrary conclusion was perverse and unsupported by any evidence. The Court further held that a writ of certiorari lies to quash such orders based on perverse findings. The confiscation orders were accordingly set aside and the appeal allowed.
Headnote
A) Customs Law - Land Customs Act, 1924 - Section 5(3) - Requirement of Permit - Section 5(3) of the Land Customs Act, 1924 does not mandate that imported goods must always and everywhere be accompanied by a permit after clearance; no duty to keep permit with consignment at all times; seizure of dollars at Sonapur airstrip for absence of corresponding permit not justified as there was no violation. Held that goods could not be confiscated under s.5(3). B) Customs Law - Smuggling - Sections 5(3), 7(1) Land Customs Act, 1924 - Confiscation - Finding of smuggling based on interchange of permits due to carrier's inadvertence held perverse; no evidence that goods were not covered by licences; conclusion that offence under s.7(1) committed was unsustainable. Held that confiscation order liable to be quashed. C) Foreign Exchange Regulation - Import of Silver Coins - Sections 8(1), 23A Foreign Exchange Regulation Act, 1947; Sections 19, 167(8) Sea Customs Act, 1878 - Absence of Valid Permission - No evidence direct or circumstantial that appellant imported without valid RBI permission; finding of offence under these sections held perverse and unsupported. Held that confiscation on this ground was unjustified. D) Constitutional Law - Writs - Certiorari - Scope - When a tribunal's finding is one that no reasonable person could reach on the materials on record and understanding of the law, certiorari lies to quash the order. The Collector's order confiscating goods based on perverse findings was quashed by High Court in writ jurisdiction, affirmed by Supreme Court.
Issue of Consideration
(i) Whether the seizure and confiscation of the goods was authorised by s. 5(3) of the Land Customs Act, 1924; (ii) Whether the finding that the appellant had committed offences under that section and other provisions of law was perverse and liable to be quashed.
Final Decision
The appeal was allowed; the orders of confiscation and the decisions of the Collector, Central Board of Revenue, Government of India and the High Court were set aside. The seizure and confiscation were held unjustified, and the appellant was entitled to release of the goods.
Law Points
- Legal points not extracted
- Section 5(3) Land Customs Act does not require permit to accompany goods at all times
- confiscation unjustified if no evidence of smuggling
- certiorari lies if finding perverse
- inadvertent interchange of permits does not constitute offence
