Case Note & Summary
The matter arose from a reference made by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) to the High Court of Bombay under Section 130(3) of the Customs Act, 1962. The applicants, M/s Rajmal Lakhichand and its proprietor Ishwarlal Shankarlal Lalwani, were involved in proceedings concerning smuggled silver. Based on Directorate of Revenue Intelligence information, a search at the applicants’ premises on 13 February 1993 resulted in recovery of 1,913.256 kg of silver in choursa form. Show cause notices dated 7 August 1993 were issued but the adjudicating authority discharged them on 30 August 1994 for insufficient evidence. The Central Board of Excise and Customs, acting under Section 129D, directed an appeal to the Tribunal. The Tribunal, by order dated 19 March 1996, set aside the adjudication order and confiscated the entire seized silver: 1,713.807 kg under Section 111(d) and 194.250 kg under Section 120(2) of the Customs Act. Penalties were imposed under Section 112(b) – Rs.10 lakh on Ishwarlal Lalwani and Rs.1 lakh on another individual; no separate penalty on the firm. The applicants’ reference applications raising 11 questions were rejected by the Tribunal on 26 September 1996. On application under Section 130(3), this Court on 17 March 1999 directed reference of a single question of law: whether the Tribunal was justified in invoking Section 120(2) to confiscate silver weighing 194.250 kg purchased from M/s Dilipkumar Hirachand & Sons, Jalgaon, without inviting that provision in the show cause notice and without hearing. Subsequently, on motion for speaking to minutes, the words “weighing 194.250 Kgs. purchased from M/s.Dilipkumar Hirachand & Sons, Jalgaon” were deleted from the question. The applicants then contended that the deletion broadened the question to cover the entire seized silver of 1,913.256 kg, and alternatively prayed that this Court recast the question to encompass the whole quantity. The Revenue opposed, asserting that the deletion merely removed surplus words and the scope remained limited to 194.250 kg. The Court examined the background: the Tribunal had separately confiscated different quantities under different sections. The original referral question explicitly pertained only to the 194.250 kg portion confiscated under Section 120(2). The Court held that deletion of descriptive words did not change the meaning or scope; it still concerned only that silver which was held liable under Section 120(2). The applicants’ reliance on precedents regarding power to recast was rejected because recasting would impermissibly widen the reference beyond the issue originally directed by the High Court. Accordingly, the Court ruled that the question’s scope is confined to the silver weighing 194.250 kg confiscated under Section 120(2) and does not extend to the entire 1,913.256 kg. The application to broaden or recast the question was dismissed.
Headnote
A) Customs Law – Reference to High Court – Scope of Referred Question – Section 130(3), Customs Act, 1962 – The Tribunal had confiscated 1,713.807 Kgs of silver under Section 111(d) and 194.250 Kgs under Section 120(2). The High Court directed reference of a question regarding invocation of Section 120(2) without show cause notice. On modification, the descriptive words “weighing 194.250 Kgs. purchased from M/s.Dilipkumar Hirachand & Sons, Jalgaon” were deleted. Applicants contended the deletion expanded the question to cover the entire seized 1,913.256 Kgs. Held, deletion of surplus descriptive words does not alter the substance or scope of the referred question; the issue remains confined to silver confiscated specifically under Section 120(2), i.e., 194.250 Kgs. (Paras 23-25) B) Customs Law – Reference – Power to Recast Question – Section 130(3), Customs Act, 1962 – The applicants alternatively sought recasting of the question to bring the entire quantity of silver under scrutiny. Rejecting this, the Court held that such recasting would impermissibly enlarge the scope beyond the subject matter originally referred by the Tribunal and directed by the High Court; reference jurisdiction is limited to the question as framed or those arising from the Tribunal’s order. (Paras 20-23)
Issue of Consideration
Whether the scope of the reference question, after deletion of the words 'weighing 194.250 Kgs. purchased from M/s.Dilipkumar Hirachand & Sons, Jalgaon', extends to the entire seized silver quantity of 1,913.256 Kgs. or remains limited to 194.250 Kgs. confiscated under Section 120(2) of the Customs Act, 1962; and whether the High Court should recast the question to cover the entire quantity.
Final Decision
The Court held that the scope of the reference question is confined to the silver weighing 194.250 Kgs. confiscated under Section 120(2) of the Customs Act, 1962, and does not extend to the entire seized quantity of 1,913.256 Kgs. The applicants' prayer to widen or recast the question was rejected.
Law Points
- Scope of reference under section 130(3) of Customs Act
- 1962
- interpretation of question of law
- effect of deletion of descriptive words
- power of High Court to recast reference question
