JUDGMENT
Ruma Pal, J.
1. This writ application was moved in September 1987. Directions for filing of affidavits was given on 14th September 1987. No. affidavit-in-opposition has been filed by the respondents. I, therefore, proceed on the basis that the facts as stated in the writ petition are admitted. The facts are as follow –
The petitioner carries on business in Singapore. The petitioner manufactures and deals in Video Magnetic Tapes, components of video cassettes etc. In 1985 an agreement was entered into between M/s. Chinar Electronics and the petitioner under which the petitioner agreed to sell and deliver video magnetic pancakes and video cassettes without spools (hereinafter referred to as the said goods) to one M/s. Chinar Electronics. Payment for the said goods was to be made by negotiation through the bank of M/s. Chinar Electronics i.e., VYSYA Bank.
2. Pursuant to the agreement, the petitioner shipped the said goods to Calcutta. The documents of title were forwarded by the petitioner to the bankers of M/s. Chinar Electronics for retirement. The documents were returned to the petitioner by Vysya Bank under cover of a letter dated 9-9-1985 on the ground that M/s. Chinar Electronics had failed to retire the same. Correspondence ensued between the petitioner and M/s. Chinar Electronics which culminated in M/s. Chinar Electronics requesting the petitioner to take back the goods as they were unable to pay for the same. The correspondence ended in September 1985. The petitioner wrote several letters to Clearing Agents in Calcutta as well as to the Shipping Company which brought the said goods to re-ship the said goods back to Singapore. The petitioner was informed by the Shipping Company that the goods had been detained by the Customs Authority and could not be reshipped. In fact the Customs Authorities seized the said goods in October 1985. The petitioner was advised by the High Commissioner, Singapore to place his case before the Collector of Customs. This the petitioner did by letters dated 28-10-1985, 26-11-1985 and 5-5-1986. No reply having been received by the petitioner from the Collector of Customs, the petitioner again contacted the Indian High Commissioner at Singapore where apparently the petitioner was advised that no step would be taken by the Customs Authorities with regard to the goods without hearing the petitioner.
3. In June 1987 the petitioner came to learn that by an order dated 19-8-1986 bearing No. 32/86 (Prev.) the respondent No. 1 herein had confiscated the goods under Section 111(d) of the Customs Act, 1962 (hereinafter referred to as the Act). This order has been challenged by the petitioner. The principal ground of challenge is that the order of confiscation could not have been passed without notice to the petitioner. The petitioner has relied upon Section 124 of the Act to contend that the order of confiscation could not have been passed without giving the petitioner who was the owner of the goods, notice in writing.
4. The petitioner has also relied upon a decision of the Bombay High Court in the case of Sampat Raj Dugar v. Collector of Customs, New Custom House, Bombay and Ors. reported in 1988 (15) ECR 338. The facts in that case are substantially similar to the facts in this case. The Bombay High Court quashed the order of confiscation and directed re-shipment of the goods to the owner. In this case the petitioner merely prays for an opportunity to be heard by the Collector of Customs.
5. It is contended on behalf of the Customs Authorities that –
(1) Even if the petitioner is the owner of the goods, it does not entitle it to return of the goods once the order of confiscation was passed even though the order of confiscation may have been passed without notice to the petitioner.
(2) The petitioner was only entitled to a hearing if any fine or penalty was imposed against it under Section 112 of the Act.
(3) The Bombay case had no application as the goods had been authorisedly imported in that case and the goods had been abandoned by the importer after valid importation.
6. Reliance has been placed by the Customs Authorities on Section 2(26) of the Act to contend that the importer includes any owner or any person holding himself out to be the importer. In this case it is stated that M/s. Chinar Electronics had held itself out to be the importer. Reliance has also been placed on the decision in Charandas Malhotra v. Assistant Collector of Customs and Ors. , in support of the proposition that there was no need to give notice as the object of a notice under Section 124 was to give to the person affected an opportunity to prove legal importation and not to dispute a conclusion already arrived at by the authorities.
7. The decesion in Charandas Malhotra’s case does not support the contention of the respondents. The line referred to by the respondent’s counsel has been read out of context. In that case watches had been seized from the petitioner’s shop. Under Section 110 of the Act unless notice under Section 124 is given within 6 months of the seizure of the goods, the goods are required to be returned to the person from whose possession they were seized. The period of 6 months could be extended for another period of 6 months on sufficient cause by the Collector of Customs. The Collector of Customs had granted extension of time to the Customs Authorities under the proviso to Section 110 and the notice under Section 124 was issued after the period of 6 months had expired from the date of seizure. The Court held that such extension could not be granted without giving an opportunity to be heard to the person who had a vested right to the return of the goods. The Court also construed the provisions of Section 124 as follows –
“The notice is, therefore, a statutory notice and conditions laid down in the section must be strictly followed if it is necessary to inform a person whose goods are being confiscated or who is sought to be penalised of the grounds upon which it is done, it follows that such grounds must be clear and specific so that the person to whom notice is given may have a proper opportunity of defending himself.”
In paragraph 9, the Court observed –
Not only are the charges made vague and unspecific the Additional Collector of Customs in para 4 of the Notice says that the appellant had “failed to prove the legal importation of the remaining 110 pieces of watches”. In other words, the adjudicating officer has already made up his mind, although Section 124 says that he should not do so without giving an opportunity to the person affected of making representation against the proposed grounds of confiscation or penalty. The object of a notice under Section 124 is to give to the person affected an opportunity to prove legal importation and not to disprove a conclusion already arrived at by the authorities.
(Emphasis supplied)
8. The Court was, if fact, deprecating the attitude of the Customs authorities having made up their minds even before the notice under Section 124 was issued.
9. In any event whatever the object of Section 124 of the Act might be, the Section itself is in terms absolutely clear. It is not disputed that the petitioner is the owner of the goods. The definition of importer in Section 2(26) is irrelevant. The Section speaks of notice to the owner.
10. The respondent’s Counsel is also not correct in his contention that in the Bombay case referred to above, the goods had been authorisedly imported. In fact, in that case it was alleged that the importer had violated the provisions of the Import Control Order 1955. The Bombay High Court held –
“As between the owner and the person holding himself out to be the importer, it is the former who takes precedence. In the instant case it was only for the limited purpose of obtaining delivery of the goods, that respondent No. 3 had presented herself as the importer. Title to the goods had not passed to her, for she had not retired the relevant documents from the petitioner bankers. She had no right to abandon the goods because in the very first place they did not vest in her. Such vesting would have followed her returning the documents. As that event had not taken place, no right accrued to the Customs authorities to proceed against the goods for a lapse committed by respondent No. 3.”
11. Therefore, the confiscation having been made without complying with the provisions of Section 124 is bad and the order of confiscation is liable to be set aside. Any action consequent upon such confiscation cannot also be sustained.
12. The impugned order of confiscation is quashed. Any action taken on the basis of the impugned order confiscation is also set aside. I direct the respondent authorities to give the petitioner an opportunity of being heard in order to establish whether the petitioner is the owner of the said goods. If the concerned authority is satisfied after hearing the petitioner that the said goods belong to the petitioner, the respondent authorities will hand over the said goods to the petitioner or its clearing agents for reshipment to the petitioner at Singapore. Subject to such formalities as may be prescribed under the Customs Act, 1962. As the order of confiscation was passed even though the Customs Authorities had knowledge of the rights of the petitioner as owner of the goods, I think that this is a proper case in which the Customs Authorities should pay the costs of the application to the petitioner. The Rule is therefore made absolute with costs.