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Shiv Shankar Prasad And Ors vs The Union Of India And Ors on 25 November, 2019

IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.13536 of 2018

1. Shiv Shankar Prasad, S/o Late Chandreshwar Prasad, Ward No. 05, P.O. and
P.S.- Sursand, District- Sitamarhi (Bihar).

2. Md. Idrish Rayn, S/o Shri Saliman Rayn, Ward No. 06, Village- Hanuman
Nagar, Baidnathpur Tola, P.O. and P.S.- Sursand, District- Sitamarhi Bihar.

3. Manoj Shah, S/o Shri Vishwanath Sah, Village and Post- Sursand, District-

Sitamarhi (Bihar).

… … Petitioner/s
Versus

1. The Union of India through the Commissioner of Customs (Prev), Patna, 5 th
Floor, Kendriya Rajaswa Bhawan, Bir Chand Patel Path, Patna-800001.

2. The Assistant Commissioner, Customs Prev Division, Muzaffarpur, 2nd
Floor, Customs Building, Imlichatti, Muzaffarpur-842001.

3. The Superintendent, Land Customs Station, Bhittamore, District- Sitamarhi
(Bihar).

4. The Inspector, Land Customs Station, Bhittamore, District- Sitamarhi
(Bihar).

… … Respondent/s

Appearance :

For the Petitioner/s : Mr.Amit Pandey, Adv.
For the Respondent/s : Mr.Anshuman Singh, Adv.

CORAM: HONOURABLE MR. JUSTICE SHIVAJI PANDEY
and
HONOURABLE MR. JUSTICE PARTHA SARTHY
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE SHIVAJI PANDEY)

Date : 25-11-2019
Heard learned counsel for the parties.

This Court at the initial stage has asked the petitioners

that there is provision for appeal, they should avail the provision of

appeal and, in spite of that, they have filed the present writ

application but, learned counsel for the petitioners insisted for

disposal of the case on merit.

Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
2/16

In that view of the matter, this Court does not have

alternative remedy but, to decide the case on merit in the following

manner.

In the present case, the petitioners are challenging the

order dated 14.5.2018 whereby and whereunder the Assistant

Commissioner,, Customs Division, Muzaffarpur Camp at Bodh

Gaya has passed the following order:-

“In view of the facts as discussed above and in
exercise of power conferred upon me under Section
22 of the Customs Act 1962, I pass the following
orders:-

(i) I order for absolute confiscation of the seized
Zink Ingot weighing 1021.480 Kgs. valued at
Rs. 1,94,081/- (Rupees One lakh ninety four
thousand eighty one only) under Section
111(b) of the Customs Act, 1962.

(ii) I order for confiscation of the seized vehicle
valued at Rs. 2,50,000/- (Rupees Two lakh
fifty thousand only) under Section 115(2) of
the Customs Act 1962. However, I give option
to redeem the vehicle on payment of fine of
Rs. 50,000/- (Rupees Fifty thousand only)
under Section 125 of the Customs Act, 1962
to the noticee No.1. Since, I find that the
noticee No.1 has deposited amount of Rs.
50,000/- (Rupees Fifty thousand only) vide
T.R. 6 No. 00002 dated 30/12/2016 at the
time of provisional release of vehicle, I hold
that the deposited amount of Rs. 50,000/-

Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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may be appropriated against redemption fine
as above.

(iii) I impose penalty of Rs. 10,000/- (Rupees Ten
thousand only) upon the noticee No.1 under
Section 112 of the Customs Act 1962.

(iv) I impose penalty of Rs. 10,000/- (Rupees Ten
thousand only) upon the noticee No.2 under
Section 112 of the Customs Act 1962.

(v) I impose penalty of Rs. 5,000/- (Rupees
Five thousand only) upon the noticee
No.3 under Section 112 of the Customs
Act 1962.”

On 4.12.2016, a casual information was received at

about 15.00 hrs., the officers of LCS Bhithamore intercepted

Truck bearing registration No. AS09C/7546 at Nawahi Chowk,

Bhitamore and examined the contents loaded on the truck in the

presence of noticee No.1 Md. Idrish Rayn (petitioner no.2) and

two independent panches. The noticee No.1 was asked to produce

the bill/documents in respect of loaded goods but, he failed to

produce the same. The said vehicle loaded with zinc ingots and

driver was brought to the office at LCS Bhithamore for thorough

search and completion of the seizure formalities. In the truck, 49

pieces Zinc ingots weighting 1021.480 kgs. were found. The said

truck along with the goods were seized in exercise of power under

Section 110 of the Customs Act, 1962 on reasonable belief that the

goods brought into India from Nepal without any documents is
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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liable to confiscation under Section 111(b) and the said vehicle

used for transportation of the contraband goods is liable to

confiscation under Section 115(2) of the Customs Act, 1962 and

person involved in this case is liable for penalty under Section 112

of the Customs Act, 1962 for contravention of Section 7, Section11, Section46

and Section47 of the Customs Act, 1962 read with Section 3(2) of the

Foreign Trade (Development SectionRegulation) Act, 1962.

The driver, Noticee No.1 has made his voluntary

statement recorded on 4.12.2016 under Section 107 of the

Customs Act, 1962 stating that he is the driver of the said vehicle

and Sri Manoj Sah (Noticee No.3) who is petitioner no.3 in the

present case, approached him asking to carry some kabars from his

kabar shop to Sitamarhi with Rs. 1500/- as freight charge. The said

Noticee No.1 agreed and gave him key of said vehicle for loading

kabar. The Noticee No.1 returned back after taking lunch and

moved with loaded vehicle. The officer of the LCS Bhithamore

intercepted the said vehicle along with the said goods.

In the interrogation, he has accepted that the vehicle was

given to Sri Manoj Sah on his request for loading the said goods

from kabar shop belonging to him situated at Bhithamore. He was

paid Rs. 1500/- as freight of the said goods for carrying up to

Sitamarhi. At the loading point, he has stated that the said old Jasta
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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(Zinc) has been loaded on his vehicle in the kabar shop of Shri

Manoj situated at Bhithamore. He has further stated that the Jasta

appears to be of Nepal but he did not know the actual mode of

illegal import from Nepal into India. The zinc Ingot was of

different shape and size but he did not disclose the destination

where to deliver the material and further he has filed application

on 7.12.2016 claiming the ownership of the seized vehicle which

was later on released on provisional basis. The said vehicle was

released on the security money of Rs. 50,000/-. The said goods

were sent to Joint Director, Chemical Laboratory, Customs House

15/1 Strand Road, Kolkata and the Chemical Examiner, Kolkata

gave the following report:-

“The sample is in the form of out/broken

shining grayish metallic lumps of irregular shape and

size. It is mainly composed of zinc together with iron

and small amount of other inorganic matter.

Zinc96.4% by wt.”.

The show-cause notice was issued under Section 124 of

the Customs Act, 1962 to all the petitioners giving full details of

fact wherein mentions about the casual information on 4.12.2016

at 15.00 hrs. whereafter the truck was intercepted and analysis has

been reproduced and also mentions the statement of petitioner no.2
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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but, neither of them filed their show-cause nor appeared before the

Custom Authority nor made statement under Section 8 of the

Customs Act.

The Noticee No.2 (petitioner no.1) has made following

statement:-

“(i) He is the businessman of Kabar (scrap). He
engaged to purchase of Kabar (scrap) from the
cyclewala or thelawala. He has no permanent
kabar shop. While the kabar (scrap) accumulated
in huge quantity the same is to be sold to the
outsider customer.

(ii) He earns his income from business of kabar
scrap and agriculture.

(iii) While the said goods was intercepted by
Customs Authority, he was present at Sitamarhi
and he got information from the said Noticee No.1
(Driver).

(iv) Seized goods are of Indian origin and same
has been purchased from local unknown persons
for which he has no any relied documents/bill with
him in respect of the said goods.

(v) He knows the Noticee No.1 and 3 but he did
not know details about Noticee No.3 Noticee No.3
was engaged in loading and unloading of the
subject goods.

(vi) The seized goods was delivered to someone
at Muzaffarpur and freight was negotiated with
Noticee No.1 (Driver) Rs. 1500/-.

(vii) Seized goods is to be further used to
manufacturing of Gas Regulator and belt buckles.

Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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(viii) He has purchased the seized goods from
different local cyclewala and thelawala after
paying Rs. 70 to 80 per kg, but he did not know the
details of above sellers.

(ix) Such type of manufacture activities is to be
carried out at Sursand, Sitamarhi and Muzaffarpur
but he did not know name and details of
manufacturing/conversion unit of Zinc ingot.

(x) He admitted no fabrication unit of Zinc
Ingot from Kabar of Battery surrounding of
Bhithamore and Nawahi.”

In the statement, he has stated that he has purchased the

Kabar from the cyclewala or thelawala, has no permanent kabar

shop, when the kabar accumulated in huge quantity, he used to

sold the same to outsider customer. He has mentioned that the

goods are of Indian origin having purchased from unknown person

but, failed to place document in support of the noticee. He has

accepted that he knows the driver, the petitioner no.1 (Noticee

No.2) and petitioner no.3 Manoj Sah (Noticee No.3). He has taken

a stand that the material was to be delivered at Muzaffarpur and

freight was netogiated with Noticee No.1 at Rs. 1500/-. The seized

goods was to be used for manufacturing of Gas Regulator and belt

buckles. He has admitted such activities are carried out at Sursand,

Sitamarhi and Muzaffarpur but he did not give the name and

details of the manufacturer or conversion units of zinc ingots. The

Noticee No.3 (petitioner No.3) has appeared and said that he has
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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no relation with the Noticee No.1 (petitioner no.2) but, he is a

neighbor. The seized goods has been converted from old battery

and he knows the petitioner no.1 (Noticee No.2) from childhood

and accepted that two cases under the customs case have already

been registered.

Again the statement of driver was recorded, he has re-

stated the same that the goods belonged to Manoj Sah and who

loaded the goods on his truck, the Noticee No.2 claiming to be his

goods, Manoj Sah has said that it does not belong to him having no

connection with any of the aforesaid two persons and, ultimately,

after discussion, has arrived to a conclusion that under the goods

were of Nepal origin, were imported illegally into India from

Nepal without any valid document, contravene the provision of

Section 7, Section11, Section46 and Section47 of the Customs Act, 1962 read with

Section 3(2) of the Foreign Trade (Development and SectionRegulation)

Act, 1992 and liable for confiscation. Ultimately, the final order

for confiscation has been passed with respect to the vehicle which

was released on provisional basis, has been given the benefit under

Section 125 of the Customs Act that he may deposit a cost of the

vehicle and get release of the same, as the petitioner no.2 has

already deposited Rs. 50,000/-, the same has been directed to be

appropriated against the redemption fine and also imposed penalty
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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of Rs. 10,000/- to the petitioner no.1 and Rs. 5,000/- penalty has

been imposed on petitioner no.3 under Section 112 of the Custom

Act.

The point has been raised by the petitioner that before

seizure, the authority was to form an opinion that he has a

reasonable belief that the goods are liable for confiscation under

the Act. The pre-condition before seizure, the authority was

required to form this opinion as they have failed to form an

opinion of reasonable belief of the goods of third country is

required seizure, the seizure itself is bad and leads to wrong

confiscation of the goods and the entire confiscation proceeding is

vitiated and, as such, the order passed against the petitioners is

liable to be quashed. It has further been submitted that in the order,

there is no mention that it is the prohibited goods, could not have

been brought from Nepal and, as such, the order itself is bad on

this ground. It has again been stated that the material which was

seized does not tally with the report furnished after the chemical

analysis, inasmuch as, the seizure was made of the goods but, the

seizure memo or any order of seizure was not served to the owner

of the goods nor the copy of the Panch, recording the proceeding

of search, was served and, as such, the search and seizure has been

conducted without following the due procedure established by law.
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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Thus, the entire process is non-est in the eye of law. It has been

said that in term of Section 123 of the Customs Act, 1962, the

burden of proof lies to the Custom Department to show the

material seized is of Nepal origin but, wrongly the burden has been

shifted upon the petitioners to prove that the goods were not

brought from Nepal but, the same are of Indian territory. At the

last, learned counsel for the petitioners submits that they were/are

obliged to release the goods in terms of Section 125 of the

Customs Act. So, the impugned order is liable to be interfered with

by this Court.

Per contra, learned counsel for the Custom Department

submits that the goods were seized in presence of the driver as

well as in presence of the two persons (witnesses), seizure memo

was prepared properly, inasmuch as, there is a dispute of

ownership of the property seized and the statement does not reflect

that the seizure memo bearing signature of the panches was not

handed over to the driver at the relevant time as the petitioner nos.

1 3 were not present. Further, forming an opinion that the

material seized is of third country is based upon the information

received, that led to interception of driver who made a statement

that the seized Zinc has been smuggled from Nepal territory. It has

further been submitted that looking to the facts and circumstances,
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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the Custom Officer has rightly formed an opinion or reason to

believe that the goods were of Nepal origin as per Section 123 of

the Customs Act, the burden lies with the petitioners to show that

it is a rightful material and not a material imported from the third

country as the material seized from the driver who himself has

made a statement that its origin is Nepal. In such circumstances,

the claim of the petitioners that wrongly proceeding was initiated

is completely misconceived and mis-construed, liable to be

rejected.

Before discussing this issue, it is proper to quote Section

110 and Section123 of the Customs Act,1962 which reads as follows:-

“110. Seizure of goods, documents and things.–
(1) If the proper officer has reason to believe that any goods are
liable to confiscation under this Act, he may seize such goods:

Provided that where it is not practicable to seize any such
goods, the proper officer may serve on the owner of the goods
an order that he shall not remove, part with, or otherwise deal
with the goods except with the previous permission of such
officer.

[(1A) The Central Government may, having regard to the
perishable or hazardous nature of any goods, depreciation in
the value of the goods with the passage of time, constraints of
storage space for the goods or any other relevant
considerations, by notification in the Official Gazette, specify
the goods or class of goods which shall, as soon as may be after
its seizure under sub-section (1), be disposed of by the proper
officer in such manner as the Central Government may, from
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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time to time, determine after following the procedure hereinafter
specified.

(1-B) Where any goods, being goods specified under sub-
section (1A), have been seized by a proper officer under sub-
section (1), he shall prepare an inventory of such goods
containing such details relating to their description, quality,
quantity, mark, numbers, country of origin and other particulars
as the proper officer may consider relevant to the identity of the
goods in any proceeding under this Act and shall make an
application to a Magistrate for the purpose of–

(a) certifying the correctness of the inventory so prepared; or

(b) taking, in the presence of the Magistrate, photographs of
such goods, and certifying such photographs as true; or

(c) allowing to draw representative samples of such goods, in
the presence of the Magistrate, and certifying the correctness of
any list of samples so drawn.

(1-C) Where an application is made under sub-section (1B), the
Magistrate shall, as soon as may be, allow the application.]
(2) Where any goods are seized under sub-section (1) and no
notice in respect thereof is given under clause (a) of Sectionsection 124
within six months of the seizure of the goods, the goods shall be
returned to the person from whose possession they were seized:

Provided that the aforesaid period of six months may, on
sufficient cause being shown, be extended by the
2[Commissioner of Customs] for a period not exceeding six
months.

(3) The proper officer may seize any documents or things which,
in his opinion, will be useful for, or relevant to, any proceeding
under this Act.

Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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(4) The person from whose custody any documents are seized
under sub-section (3) shall be entitled to make copies thereof or
take extract therefrom in the presence of a officer of customs.”

“[110-A. Provisional release of goods, documents and
things seized pending adjudication. – Any goods, documents or
things seized under Sectionsection 110, may, pending, the order of the
[adjudicating authority], be released to the owner on taking a
bond from him in the proper form with such security and
conditions as the [adjudicating authority] may require.]”
“123. Burden of proof in certain cases.-

[(1) Where any goods to which this section applies are seized
under this Act in the reasonable belief that they are smuggled
goods, the burden of proving that they are not smuggled goods
shall be–

(a) in a case where such seizure is made from the
possession of any person,–

(i) on the person from whose possession the goods
were seized; and

(ii) if any person, other than the person from
whose possession the goods were seized, claims to
be the owner thereof, also on such other person;

(b) in any other case, on the person, if any, who claims to
be the owner of the goods so seized.]
(2) This section shall apply to gold [and manufactures thereof]
watches, and any other class of goods which the Central
Government may by notification in the Official Gazette,
specify.”

Section 110 speaks that if the officer has reason to

believe that any goods are liable to confiscation under this Act, he

may seize such goods and Section 123 provides that (1) where any
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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goods to which this section applies are seized under this Act in the

reasonable belief that they are smuggled goods, the burden of

proving that they are not smuggled goods shall be (a) in a case

where such seizure is made from the possession of any person (i)

on the person from whose possession the goods were seized; and

(ii) if any person, other than the person from whose possession the

goods were seized, claims to be the owner thereof, also on such

other person; (b) in any other case, on the person, if any, who

claims to be the owner of the goods so seized. (2) this section shall

apply to gold and manufactures thereof, watches, and any other

class of goods which the Central Government may by notification

in the Official Gazette specify.

Thus, Section 123 of the Customs Act does not apply to

the matter as the material seized is not any of the item mentioned

under Section 123 of the Customs Act but, it is the common law

that if the goods has been seized on reasonable belief that it is a

smuggled goods from third country then, in that circumstances, the

person from whose possession the seizure has been made, he has

to show that the goods, which has been seized, does not fall in the

mischief of the SectionCustoms Act or is not of a third country material.

In the present case, the driver in a specific term has

stated that the goods were loaded by Manoj Sah and he has stated
Patna High Court CWJC No.13536 of 2018 dt.25-11-2019
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that it is likely the goods has come from Nepal. In such

circumstances, the submission of the petitioner that it is not from

Nepal territory, unless it is shown by valid document or material

from the person they have purchased, in such circumstances, in

view of the statement of the driver, rightly the confiscation has

been made and the order has been passed holding that the material

is from Nepal origin and, in the present case, the driver has stated

that the materials are of Manoj Sah, the petitioner no.3 whereas the

petitioner no.1 Shiv Shankar Prasad (Noticee No.2) is claiming to

be the owner of the goods. So, it is an unverified material as to

who is the owner of the property. The vehicle has already been

released and Rs. 50,000/- has been forfeited, treated to be the value

of the vehicle.

Learned counsel for the petitioners submits that they

ought to have given the benefit of Section 125 of the Customs Act.

When the ownership of the property is in dispute, the proper

course for the petitioner no.1, who is claiming to be the owner of

the property, is to file proper application under Section 125 of the

Customs Act before the authority of proper jurisdiction who will

take a decision in accordance with law.

In that view of the matter, this Court does not find that

the petitioners have made out a case for interference with the
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impugned order passed by the Assistant Commissioner, Customs

Division, Muzaffarpur Camp at Bodh Gaya.

Before parting with the judgment, this Court is of the

view that if any of the petitioners file an application under Section

125 of the Customs Act, 1962, the Authority concerned will

consider the case on merit and will take a decision in accordance

with law.

With the aforementioned observation, this writ

application is dismissed.

(Shivaji Pandey, J)

( Partha Sarthy, J)
rishi/-

AFR/NAFR NAFR
CAV DATE NA
Uploading Date 28.11.2019
Transmission Date

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