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Sadasivam, J.—Appellant, Messrs Arun (Importers) Private Ltd., filed the suit in the lower Court to set aside the order of the Assistant Collector of Customs; confiscating their 20 cases of camphor of Japanese origin in 50 pounds packing and for recovering the same or their value.
On 2nd August 1960 a preventive officer of the Custom House, Madras, asked the proprietor of Busy Transport Service by his letter exhibit B-7, of the same date, not to transport the 20 cases of camphor, as he had grounds to suspect that they were imported into India illegally. The Appellant sent the communication (exhibit B-1) dated 2nd August 1960, with reference to the enquiry of the customs officer, that the 20 cases of camphor despatched through Messrs. Busy Transport Service were purchased by them under exhibit A-6 dated 1st August 1960 from Messrs. Seth Sheonarain & Sons, Mohunta. Even at this stage we may mention that the description in the receipt exhibit A-6 that the 20 cases of 50 pounds, packing were Japan Camphor were written at the request of P.W. 1, the manager of the Appellant firm, after it was handed over to him. In fact, the counterfoil does not contain any such words, as seen from the evidence of D.W. 1 Chakrapani. When the customs authorities enquired at Seth Sheonarain & Sons, Mohunta, about the 20 cases, the said firm made the communication, exhibit B-8, dated 2nd August 1960, that they were ignorant of the transaction since their proprietor, Mohunta had gone to Delhi on 1st August 1960, that he would be returning in a day or two and that further particulars might be obtained from him. On 8th August 1960, Messrs Seth Sheonarain & Sons, informed the Assistant Collector of Customs by their letter exhibit B-11 that the 20 cases of camphor were sold by them to Messrs. Arun & Company out of the 33 cases purchased from Messrs. Roopchand & Sony and that the bills issued to Messrs. Arun & Company were with the sales tax authorities. On the same date Roopchand and Sons sent the communication (exhibit B-12) to the Assistant Collector of Customs, in response to the enquiries made by the latter, that they sold 33 cases of camphor to Seth Sheonarain & Sons and that the said goods were part of the goods imported by Messrs. Karsandas Baojee from U.K. under the cover of B.E. No. 1634/26-2-1959. Thus the goods sold by Roopchand & Sons to Seth Sheonarain & Sons could not be the source of the goods seized from Busy Transport Service, as the goods sold by Roopchand & Sons were of U.K. origin, while those seized from Busy Transport Service were of Japanese origin. In fact, the managing partner of the Appellant firm, examined as P.W. 2, categorically admitted that the camphor purchased by his firm was of Japanese origin. It is true that the statements given by Seth Sheonarain & Sons are not consistent or uniform, and we shall comment about it in due course.
The Assistant Collector of Customs was not satisfied with the claim put forward by the Appellant firm, and sent the show-cause notice (exhibit A-3) stating that the 20 cases of camphor seized in this case were illegally imported into India and asked the Appellant firm why the said goods should not be confiscated u/s 167(8) of the Sea Customs Act (hereinafter called the Act). The show-cause notice refers to the materials on which it was issued.
The Appellant firm sent the reply (exhibit B-6) stating that they purchased the 20 cases of camphor of Japanese origin in 50 pounds packing from Seth Sheonarain & Sons. They denied the averments contained in paragraphs 3 and 4 of the show-cause notice. In exhibit B-6 the Appellant firm stated that they wished to be heard in support of their case through their Advocate. The order of confiscation (exhibit A-4) passed by the Assistant Collector of Customs shows that Mr. U.N.R. Rao, Advocate, represented the Appellant Arm. The Assistant Collector of Customs has given reasons ,for passing the order of confiscation and it is this order (exhibit A-4) which the Appellant firm unsuccessfully sued to set aside in the lower Court.
We shall briefly refer to the relevant provisions of the Act. Section 167(8) is as follows:
If any goods, the importation or exportation of which is for the time being prohibited, or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction, or
if any attempt be made so to import or export any such goods, or
if any such goods be found in any package produced to any officer of Customs as containing no such goods, or
if any such goods, or any dutiable goods be found either before or after landing or shipment to have been concealed in any manner on board of any vessel within the limits of any port in India, or
if any goods the exportation of which is prohibited or restricted as aforesaid be brought to any wharf in order to be put on board of any vessel for exportation contrary to such prohibition or restriction,
such goods shall be liable to confiscation;
any person concerned in any such offence shall be liable to a penalty not exceeding three times the value of the goods or not exceeding one thousand rupees.
Section 178 of the Act provides for the seizure of things liable to confiscation. Section 178-A, throwing the burden of proof, that the goods seized are not smuggled goods, on the person from whose possession the goods were seized, is not relevant for the purpose of this case, as camphor is not one of the articles referred to in that section or in the notification issued under that section. Section 188 of the Act provides for an appeal by an aggrieved person from an order of a subordinate officer of Customs to the Chief Customs authority and it is stated in that section that the order passed in appeal under this section shall, subject to the power of revision conferred by Section 191, be final.
The jurisdiction of civil Courts to interfere with orders of confiscation made by the customs authorities has been clearly defined in several decisions, starting with the well-known case in Secretary of State for India v. Mask & Co. ILR [1940] Mad. 599 (P.C.) , which has been referred to in a number of decisions. The following passage in the decision (at page 614) clearly lays down the circumstances under which the civil Courts will have jurisdiction:
It is settled law that the exclusion of the jurisdiction of the civil Courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.
It appears from the decision that the remedies under the Act had been exhausted before the Respondents therein filed the suit before the Subordinate Judge''s Court, Cuddalore. The Subordinate Judge had held that the Court had no jurisdiction to entertain the suit and dismissed it. The appeal against that decision was allowed by this Court, but the Privy Council restored the judgment of the Subordinate Judge. The Privy Council observed (page 615) that it was unnecessary to consider whether, prior to taking such appeal u/s 183 of the Act the Respondents would have been entitled to resort to the civil Courts or whether they would have been confined to the right of appeal u/s 188 of the Act.
In Manahem S. Yeshoova Vs. Union of India and Others, , reliance was placed on the decision of the privy Council referred to above and it was held that a civil Court would have jurisdiction to consider the validity of the decisions and orders made under the provisions of Section 182 or Section 183 of the Sea Customs Act (VIII of 1878) on the grounds which have been enumerated in the decision of the Privy Council, namely, that the provisions of the Act had not been complied with or that the Tribunal had not acted in conformity with the fundamental principles of judicial procedure. It is clear from the decision that the fact that remedies provided under the Act had been availed of would not in any way affect the above principle.
It is not the contention of the learned Advocate for the Appellant that the procedure laid down under the Act has not been followed in this case. His contention is that the principles of natural justice have been violated in two respects, namely, that the communications sent by Seth Sheonarain & Sons, namely, exhibits B-11 and B-16, were used by the Assistant Collector of Customs without giving the Appellant an opportunity to cross-examine the persons who made the statements and that the Assistant Collector of Customs has, on mere suspicion, found that the 20 cases of camphor were illegally imported into India.
The order (exhibit A-4) shows that on 24th August 1960 Mr. U.N.R. Rao as well as his senior Mr. Soundararajan were given a personal hearing by the Assistant Collector of Customs after furnishing them with copies of the said Utters of Seth Sheonarain & Sons. It does not appear that they made any grievance of the fact that the persons who had made the statements were not examined. It appears from the order that the Appellant relied on the fact that the transaction in their favour was a second sale and that it was made in good faith. In fact, it appears from the order that the Appellant made comments on the statements made by Seth Sheonarain & Sons as those made by interested parties. The learned Advocate for the Appellant commented on the fact that the godown of Seth Sheonarain & Sons was not checked to find out whether they had stocks of camphor of Japanese origin. We fail to see how it would affect the case of the Appellant. If further stocks of unaccounted cases of camphor of Japanese origin were found in the godown of Seth Sheonarain & Sons, it would only make the case against the Appellant stronger. Thus we are unable to accept the contention of the learned Advocate for the Appellant that the principles of natural justice were violated by reason of the use of the statements made by Seth Sheonarain & Sons. In fact, as already pointed out, Seth Sheonarain & Sons made varying statements, and it may be that they are not free from blame.
The main question argued in this appeal is that It is for the Respondents to prove that the goods seized in this case were illegally imported into India. The learned Advocate for the Appellant relied on the decision in Mangala Prosad Vs. V.J. Manerikar and Others, . In support of his contention that the burden of establishing unlawful importation is on the customs authorities and that it does not ordinarily shift on to the person charged with the offence. It was unsuccessfully contended in that case that, while i.e. the case of imposition of a penalty, the authorities must establish that there had been an illegal importation and that the person sought to be penalised had been concerned in such illegal importation, for the purpose of confiscation it was enough if the goods, of which the importation was prohibited or restricted, were found to have been imported and that it was not necessary either to establish that there was no lawful authority for the importation or whether it was the person from whose possession the goods had been seized or some other person from whom the former might have acquired them who made the importation. It was rightly pointed out in that decision that when goods are seized from the possession of an individual, the State may be entitled to confiscate them only on showing that the importation has been made in contravention of the prohibition or restriction. The reason is, (as pointed out in that decision,) both the parts of column 3 of Section 167(8) are controlled by column 1 thereof. In other words, so long as the offence as specified in column 1 is not established, there is no case either for imposing the penalty upon a person as specified in the second part of column 3 or of proceeding against the goods themselves by confiscating them. It is on account of the above reasons it was held in that decision that no goods could be confiscated unless the State had discharged the onus of establishing the offence or that the goods had been unlawfully imported. But it is clear from that decision that once it is established that certain goods have been unlawfully imported, then in whosesoever possession they may be found, they may be confiscated.
In Bhagawandas Kalachand Kripalani Vs. The Collector of Central Excise, . Srinivasan, J. has held that the Collector of Central Excise derives jurisdiction to make an order directing confiscation of goods u/s 167(8) of the Sea Customs Act only if he can record a finding on the material that is properly before him that the goods in question have been imported into the country in violation of any prohibition or restriction regarding their import.
The Assistant Collector of Customs in his order (exhibit A-4) has found that the importation of the 20 cases of camphor seized was unauthorised. In other words, he found that the camphor has been imported into India contrary to the provisions contained in Section 167(8) of the Act. If there is evidence to support such a finding, it is not for this Court to canvass the correctness of that finding as a Court of appeal. We shall refer to the several circumstances which appear from the order of the Assistant Collector and the records of the case, which the Assistant Collector, as a man of prudence within the meaning of Section 3 of the Evidence Act, could consider sufficient to come to the finding which he has done. Admittedly the large quantity, viz., 20 cases of camphor in 50 pounds packing transported by the Appellant firm, was of Japanese origin. The Appellant firm has attempted to use the bill issued by Messrs. Seth Sheonarain & Sons, by procuring the description that the goods were of Japan origin. It is an undisputed fact that the Appellant firm cannot import Japanese camphor and that the State Trading Corporation alone can import Japanese camphor. It Is clear from the evidence of the preventive officer (D.W. 1) that import licence to import camphor is given only to the State Trading Corporation and that the State Trading Corporation alone can import and distribute it to the actual users in the State on the certificate issued by the Director of Industries, The manager of the Appellant firm admitted as P.W. 1 in this case that till the date of his giving evidence he did not know where from Seth Sheonarain & Sons got the camphor and that he never cared to know it either. We have already referred to the fact that the preventive officer in this case went and stopped the transport of the 20 cases of camphor on the information that they were smuggled from Colombo and were booked to Bombay through Busy Transport Service. We have also referred to the enquiries made which disclosed the varying versions put forward by the Appellant firm and their vendors. Thus it cannot be said that the Assistant Collector of Customs had not sufficient materials to find that the 20 cases of camphor were illegally imported into India and to confiscate the same. The order of the Assistant Collector of Customs confiscating the smuggled camphor is correct and the lower Court rightly refused to set aside the same.
The learned Advocate for the Appellant argued that the Assistant Collector of Customs failed to comply with the provisions of Section 183 of the Act, inasmuch as no option was given to the Appellant to pay fine in lieu of confiscation of the goods. It is significant to note that in response to the notice (exhibit A-3) requiring the Appellant to show cause why the 20 cases of camphor should not be confiscated, the Appellant firm merely, objected to the confiscation, but did not claim that they should be handed over to them on payment of fine. In fact, the Appellant firm threatened to take legal proceedings against the Respondents if they proceeded to confiscate the goods. It does not also appear from the proceedings in the suit or in the grounds of appeal that any grievance was made of the fact that no such option was given as contemplated u/s 183 of the Act. On the other hand, it appears from the records of the lower Court that during the pendency of the suit the goods were brought to sale through Murray and Company with the consent of the Appellant firm, but without prejudice to the Appellant''s contention in the suit. But subsequently as the bids made at the auction were not favourable, private tenders were called for and that too was with the consent of the Appellant firm. Hence we see no merit in the belated objection taken by the learned Advocate for the Appellant that Section 183 of the Act has not been complied with in this case.
The decree and judgment of the lower Court are correct and they are confirmed and the appeal is dismissed with costs.