1 WRIT PTITION NO.1870 OF 2008 lgc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1870 OF 2008 Okwy Shedrack Akpuba ] C/o. K R Choudhari, Advocate, ] Laxmi Narayan Sadan Annexe, ] Gr. Floor, 168-C, Vikas Wadi, ] Dr.Ambedkar Road, Dadar (E), ] Mumbai – 400 014 ].... Petitioner. Versus 1 Union of India ] through Ministry of Law & Justice ] Branch Secretariat, 2nd Floor, ] Aayakar Bhavan Annexe, M K Road, ] Mumbai – 400 020 ] ] 2 The Commissioner of Customs (Airport) ] CSIA, Avas Corporate Point, ] Makwana Lane, Behind S M Centre, ] Andheri-Kurla Road, ] Mumbai – 400 059 ] ] 3 Jt. Commissioner of Customs ] Air Intelligence Unit ] Avas Corporate Point, ] Kamwana Lane, Behind S M Centre, ] Andheri-Kurla Road, ] Mumbai-400 059 ] ] 4 Shri Satish Kumar, ] Addl.Commissioner of Central Excise ] Raigad Commissionerate, ] Kendriya Utpad Shulk Bhavan, ] Plot No.1, Sector 17, ] Khandeshwar, New Panvel – 410 206 ]... Respondents. Mr.K R Choudhari for the Petitioner. Mr. M I Sethna, Senior Counsel a/w Mr. R Ashokan for the Respondents. CORAM : V C DAGA AND R M SAVANT, JJ. DATE : 07th October 2010 2 WRIT PTITION NO.1870 OF 2008 JUDGMENT [PER R M SAVANT, J] 1 By the above Petition, filed under Article 226 of the Constitution of India, the Petitioner prays for, (i) setting aside the Order in Original dated 22/05/2008, the Order in Appeal dated 11/06/2008 and the Order in Revision dated 25/06/2008 passed by the Central Government; (ii) that the Petitioner be allowed to take the miscellaneous items and the medicines confiscated by the Customs Department by setting aside confiscation on such terms and conditions as this Court deems fit; (iii) that the Petitioner be granted compensatory costs by imposing same on the Respondents jointly and severally for retaining the passport of the foreign national like the Petitioner for a period of 75 days; (iv) that the Respondents be directed to pay the Petitioner jointly and severally the compensation in the sum of Rs.13,65, 490/- being equivalent of the value of Life Saving Medicines with interest thereon at the rate of 24% p.a. from the date of seizer till payment; and (v) that the Respondent No.4 i.e. Additional Commissioner of Central Excise, Raigad Commissionerate, be directed to pay compensatory cost to the Petitioner for this illegal and unauthorized act. FACTUAL MATRIX. 2 The factual matrix involved in the above Petition can be stated thus :- The Petitioner is a citizen of Nigeria and claims to be a businessman dealing in medicines in Nigeria. The Petitioner had visited India on number of occasions in the past for making purchases of readymade garments and taking the same to Nigeria. The incident, which has given rise to the proceedings resulting in impugned orders in respect of which the Petitioner seeks the reliefs as mentioned in 3 WRIT PTITION NO.1870 OF 2008 prayer clause (i), has occurred on the night of 19/20th April 2008. It appears that the Petitioner had arrived in India on 14th April 2008 and after staying for four days, the Petitioner was to leave for Nigeria on the night of 19/20th April 2010. The Petitioner had booked himself on the flight of Kenya Airlines bearing flight No.KQ203 for going back to his country. The Petitioner checked in with the said Airlines with 15 pieces of baggage. On seeing the Petitioner with the said 15 pieces of baggage, the Customs Officials called upon the Petitioner to open the baggage as they intended to examine the same. The Customs Officials at the Airport did not allow the Petitioner to board the flight and detained the Petitioner on the Airport on the night of 19/20th April 2008. They examined the baggage and made a panchanama of the goods. It appears that the Customs Officials took away the Petitioner’s passport bearing No.A3605352A which had Visa endorsement valid up to 30th June 2008. It is the case of the Petitioner that the Customs Officials also took away an enlarged photograph of the Petitioner and two packages of baby diapers. It is the case of the Petitioner that in spite of repeated requests, the Customs Officials did not hand over the copy of the panchanama drawn on the said date to the Petitioner nor issued any receipt to the Petitioner for taking over the passport. It appears that the Petitioner was served with the summons under Section 108 of the Customs Act (for brevities sake “the said Act”) on 20th April 2008 asking the Petitioner to remain present on 21st April 2008. In accordance with the said summons, the Petitioner remained present and his statement was recorded on 21st April 2008. The statement of the Petitioner was to the effect that he had earlier come on 3rd April 2008 on which occasion he had brought foreign currency amounting to US $ 52,250 in respect of which he had filed currency declaration forms and the same 4 WRIT PTITION NO.1870 OF 2008 were accepted by the Customs Authorities. He further stated that he had made certain purchases out of the said amount of US $ 52,250. However, on account of the phone call received from his wife in Nigeria, he had to pre-pone his departure and accordingly he left India on 04th April 2008. Thereafter he arrived in India again on 14th April 2008 and out of the said amount he made purchases of medicines including Life Savings Drugs which have been valued by the Customs Authorities at Rs. 13,65,490/- and also made certain purchases like stationery items, dress materials etc. amounting to Rs.66, 900/-. The Petitioner claims that he visited the office of the Customs Authorities and requested for release of his passport as he wanted to go back to Nigeria. However, according to him, the said request was of no avail as no heed was paid by the Customs Authorities to his request. The Petitioner’s further statement was again recorded on 24th April 2008 in which he stated that for the said medicines he did not have any Doctor’s prescription and that the said medicines have been purchased by him as he had an order from one Anambra State Government Board General Hospital, Nigeria. In so far as confiscation is concerned, since the Petitioner had waived issuuance of show cause notice, the Assistant Commissioner, concerned, proceeded to hear the Petitioner and passed an order on 30th April 2008 confiscating the seized goods in question. Thereafter an Order in Original came to be passed on 22.5.2008 by the Joint Commissioner of Customs, Air Intelligence Unit. The Joint Commissioner held that export of commercial goods or goods in commercial quantity by a passenger from India cannot fall within the category of “Bonafide Baggage”. The Joint Commissioner further held that the export of the said medicines was in violation of 5 WRIT PTITION NO.1870 OF 2008 Section 113(1) of the Foreign Trade (Development & Regulation) Act as the said goods were sought to be exported in violation of Exim Policy and especially restriction contained in para 2.20 of the said policy. The Joint Commissioner observed that the charges which were levelled against the Petitioner in respect of the subject goods were made known to the Petitioner. However, the Petitioner had requested for waiver of show cause notice and only wished to be heard in person. By the Order in Original, the Joint Commissioner directed absolute confiscation of the goods viz. the medicines which were listed at Item Nos.1 to 16 valued at Rs.13,65,490/- under Section 113(d) of the said Act. The Joint Commissioner also ordered confiscation of the other items viz. Item Nos.17 to 23 valued at Rs.66,900/- under section 113(d) & (h) of the said Act. However, he allowed the Petitioner an option to pay redemption fine of Rs. 20,000/- in lieu of confiscation within 15 days from the date of the said order. The Joint Commissioner imposed a personal penalty of Rs.1,40,000/- under Section 114 of the said Act upon the Petitioner. Aggrieved by the said Order in Original dated 22nd May 2008 the Petitioner filed an Appeal before the Commissioner of Customs (Appeals), Mumbai. By an order dated 11th June 2008, the Commissioner of Customs, Appeal Unit, Airport rejected the said Appeal and upheld the Order in Original dated 22nd May 2008. The Commissioner of Customs inter alia observed that the Appellant i.e. the Petitioner herein had failed to declare the goods as required under Section 77 of the Customs Act, 1962. The Commissioner of Customs also rejected the contention advanced on behalf of the Appellant that the conditions of export were fulfilled by the Appellant as he had the copies of purchase invoices showing the licence in the form 20B or 21B. The Commissioner of Customs further observed that the goods in question cannot be 6 WRIT PTITION NO.1870 OF 2008 held as bonafide baggage and since they were not declared truly, the Commissioner of Customs found no reason to interfere with the said Order in Original. Aggrieved by the said Appellate Order dated 11th June 2008, the Petitioner filed a Revision Application before the Central Government. The Central Government rejected the said Revision Application by the impugned order dated 25th June 2008. The Central Government re-affirmed the findings of the Lower Authorities. The Central Government, inter alia held that export of commercial quantities of non- prohibited goods as part of baggage has been allowed by the Department in case the passenger concerned is able to establish that the money used for purchase of the commercial goods has been brought into the country in a legal manner and the same has been declared on arrival in India. The Central Government observed that in the instant case the Applicant i.e. the Petitioner herein had failed to do so; that the goods were in commercial quantities has never been disputed by the Applicant. The Central Government further observed that the though the Applicant claimed to have certain invoices for the purchases made by him, the said invoices were dated 24.5.2008 and 23.5.2008 whilst the Applicant was travelling on the night of 19/20-04-2008. The Central Government therefore upheld absolute confiscation of medicines/pharmaceutical goods. However as regards redemption fine on goods valued at Rs.66,900/- i.e. item Nos.17 to 23, the Central Government up held redemption fine of Rs.20,000/-, but the personal penalty imposed on the Petitioner was brought down from 1,40,000/- to Rs.40,000/- in view of absolute confiscation of the medicines/pharmaceutical goods. 7 WRIT PTITION NO.1870 OF 2008 3 We have heard the learned counsel for the Petitioner Mr.K R Choudhari and learned senior counsel for the Respondents Mr.M I Sethna. 4 The submission made by the learned counsel for the Petitioner can be broadly summarised under two Heads as follows :- (I) Seizure of Passport :- As regards seizure of passport, the learned counsel for the Petitioner submitted; (a) that the passport was withheld by the Respondent No.4 illegally without following the due process of law and without any authority and in excess of the power vested in him under the Customs Act for a period of 75 days and the Petitioner was made to suffer for no fault on his part; (b) that the passport of the Petitioner is not a document relevant for investigation in the instant case; (c) that no proper procedure for retention of Petitioner’s passport was followed; (d) that since the passport was held illegally at the behest of the Respondent No.4, the Respondents especially Respondent No.4 be directed to pay compensation to the Petitioner in such amount as deemed fit by this Court. 8 WRIT PTITION NO.1870 OF 2008 For the said purposes the learned counsel for the Petitioner relied upon the Division Bench Judgment of the High Court of Allahabad reported in 2010 (252) ELT 3 (All), in the matter of Galaxy Indo Fab. Ltd v/s. Union of India, and the Judgment of a learned Single Judge of High Court of Calcutta reported in 2008 (132) ELT 578 (Cal), in the matter of Kumar Trading Co. LLC v/s. Union of India. The learned counsel for the petitioner submitted that since impounding of passport entails civil consequences, the authorities were duty bound to give opportunity of hearing to the Petitioner. To buttress the said submission, the learned counsel for the Petitioner relied upon the judgment of the Apex Court reported in (2008) 3 SCC 674 in the matter of Suresh Nanda v/s. Central Bureau of Investigation. (II) Challenge to the Orders passed by the Authorities leading to impugned order dated 25 th June 2008 :- The principal ground of challenge to the orders passed by the authorities is on the ground of violation of principles of natural justice whilst passing the Order in Original dated 22nd May 2008. It is submitted by the learned counsel for the Petitioner that the Respondents were obliged to issue show cause notice to the Petitioner and, since no show cause notice was issued, the order has been passed in breach of principles of natural justice. The learned counsel for the Petitioner in support of his submission that show cause notice ought to have been issued to the Petitioner relied upon a Circular dated 27/7/2000 which, according to the learned counsel for the Petitioner, obligates upon the Respondents to follow a proper procedure by issuing show cause notice and, also relied upon a Circular dated 20/1/1997, which according 9 WRIT PTITION NO.1870 OF 2008 to him, stipulates that even if a party wants to waive show cause notice , such a waiver should not be permitted and show cause notice should be issued. The learned counsel for the Petitioner submitted that the Order in Original confiscating the goods, which were sought to be taken by the Petitioner to Nigeria, was also passed in breach of principles of natural justice as the Petitioner was not granted a hearing in the matter. The learned counsel submitted that since the Order in Original had serious penal consequences, the Petitioner ought to have been heard and in support of the said submission, the learned counsel for the Petitioner sought to rely upon the judgment of the Apex Court reported in AIR 1986 SC 180 in the matter of Olga Tellis & ors v/s. BMC and ors. and the judgment of the Division Bench of this Court reported in 2002 (144) ELT 50 in the matter of Bhavesh Exports Pvt. Ltd. v/s. Assistant Collector of Customs. The learned counsel for the Petitioner submitted that the goods in question could not be confiscated as there was no requirement of declaration under Section 77 of the said Act as, the said provision, according to him, operates in a different situation and the goods in question could be carried as bonafide baggage as there is no prohibition either under the Drugs and Cosmetics Act or the Customs Act prohibiting the carrying of such goods in the personal baggage. The learned counsel for the Petitioner placed reliance on the circular dated 1/3/1995 where by export of such goods by way of accompanied baggage is permissible. The learned counsel for the Petitioner submitted that the authorities have discriminated the Petitioner, as in a similar case, according to the learned counsel for the Petitioner, by order dated 15/04/2008, the authorities have permitted the passenger concerned to carry the medicines as and by way of accompanying baggage, however, similar treatement has not been meted out to the 10 WRIT PTITION NO.1870 OF 2008 Petitioner. The learned counsel for the Petitioner submitted that since the goods have been confiscated without any authority of law and, therefore illegal, the Respondents would be liable to pay compensation for the value of the goods as the medicines at this point of time have no value and the said situation is a creation of the Respondents themselves. The learned counsel for the Petitioner sought to rely upon the judgment of the Apex Court reported in 1999 (113) ELT 3 (SC) in the matter of Northern Plastics Ltd v/s. Collect of Customs and Central Excise wherein the Apex Court has held that since the situation has been brought about by the department by its own acts, the department cannot now escape from the liability of returning to the assessee money value of the goods. The learned counsel for the Petitioner further submitted that the officers who were concerned would be liable to pay compensation to the Petitioner for the said illegal confiscation and for the said purpose, the learned counsel for the Petitioner sought to rely upon the judgment of the Apex Court reported in 2006 (196) ELT 257 (SC) in the matter of Sandvik Asia Ltd v/s. Commissioner of Income Tax-I, Pune. The learned counsel for the Petitioner relying upon the said judgment submitted that the officers who were concerned with the seizure/retention of passport of the Petitioner and the confiscation of the goods would become liable to pay compensation to the Petitioner. 5 Per contra, it is submitted on behalf of the Respondents by the learned senior counsel that retention of passport of the Petitioner was on account of the fact that the entries in the said passport disclosed that the Petitioner, prior to the visit in question, had visited India as many as 18 times and the investigation as regards the 11 WRIT PTITION NO.1870 OF 2008 confiscation of the medicines which were sought to be carried by the Petitioner as the Petitioner’s baggage, was underway and therefore, the passport was retained by the authorities so as to facilitate the completion of investigation. The learned senior counsel for the Respondents submitted that the authorities have maintained records as regards retention of the passport by them in the concerned file and, therefore, it cannot be said that the passport of the Petitioner has been retained without any record being maintained in that behalf. The learned senior counsel submitted that the passport was retained in view of the fact that in such cases, if a passenger is allowed to go with his passport, usually he may abscond or makes himself unavailable and thereby frustrate any investigation and action being taken against him. SUBMISSIONS ON BEHALF OF THE RESPONDENTS AS REGARDS ORDERS PASSED BY THE AUTHORITIES: 6 As regards the orders passed by the authorities, it is submitted by the learned senior counsel for the Respondents that in view of waiver of show cause notice by the Petitioner, it cannot be said that the proceedings especially the Order in Original has been passed in breach of the principles of natural justice. The learned senior counsel for the Respondents submitted that the circular dated 27.7.2000, 20.1.1997 and 1.3.1995 relied upon by the Petitioner are for the internal guidance of the officers of the department, however, the same would not act an impediment in the way of any person to waive show cause notice. In the instant case, it appears that the Petitioner had waived show cause notice as he wanted adjudication of proceedings to be completed at the earliest. In so far as the medicines which included life saving drugs are concerned, the learned senior counsel for the Respondents submitted that the 12 WRIT PTITION NO.1870 OF 2008 Petitioner was not entitled to purchase them considerin, Rule 61(B) and the conditions prescribed under Form 20B and 21B. The learned senior counsel for the Respondents submitted that even if the Petitioner was entitled to purchase them, was not entitled to carry the same as accompanying bonafide baggage in view of the fact that no declaration under Section 77 of the Customs Act was made by the Petitioner. He further submitted that the reliance placed by the Petitioner on the circulars dated 27.7.2000, 20.1.1997 and 1.3.1995 is misplaced in view of the fact that the conditions prescribed by the said circulars have not been satisfied by the Petitioner, inasmuch as the Petitioner has failed to disclose the source of the funding of the said purchases. The learned senior counsel submitted that the Petitioner is not entitled to rely upon the Customs Declaration Form dated 4.4.2008 as the Petitioner on his return to Nigeria on the said day ought to have declared the the currency which he was carrying with him to Nigeria and ought to have filed Customs Declaration Form on his arrival in India on 14.4.2008. CONSIDERATION : 7 The matter can be conveniently dealt with under two Heads, A) Issue of Passport and, B) Challenge to the orders. A) Issue of Passport :- It is an undisputed fact that the Petitioner was detained on the night of 19/20th April 2008 whilst he had checked in for boarding the Kenya Airways Flight to Nigeria. It is further an undisputed fact that the Petitioner was carrying 15 pieces of baggages which he had checked in. On examination of the said baggages, it was found 13 WRIT PTITION NO.1870 OF 2008 that he was carrying huge quantity of medicines including life saving drugs and other goods such as stationery, clothes and wearing apparels. It is an undisputed fact that the Petitioner on the said night of 19/20th April 2008 could not produce any proof of having purchased the said goods on payment of foreign exchange as well as any receipt of the said purchases. Since the Customs Authorities were of the prima facie view that the said goods were being taken out of country illegally in contravention of the Customs Act and Rules thereunder and, since on verification of the passport it was also found that the Petitioner was a frequent traveller and had travelled as many as eighteen times prior to the said visit, the Customs Authorities deemed it appropriate to retain the passport of the Petitioner pending further investigation in the matter. In the context of the submission of the learned counsel for the Petitioner that the said passport of the Petitioner was detained without any authority of law. Our attention was drawn to the provisions of the Customs Act by the learned senior counsel for the Respondents. In terms of Section 110(3) of the Customs Act, a proper officer may seize any document or things which in his opinion will be useful for or relevant to any proceedings under this Act. It cannot be gain said that in such cases, if the passport is handed over to the person concerned, in such eventualities usually it is found that such a person usually absconds and makes himself unavailable to the laws of that country. It is in the said context that the passport of the Petitioner was retained by the authorities. In view of the case of the Petitioner that the said passport has been wrongfully retained by the authorities, we had asked the learned senior counsel for the Respondents to produce the original file. On perusal of the said original file, we have found that the officer concerned has made proper notings as regards retention of the 14 WRIT PTITION NO.1870 OF 2008 passport of the Petitioner. The said excerpt from the notings is reproduced herein under :- “The particulars of his arrival & departure to and from India is noted down in a separate sheet of paper, placed opp. The medicines have been verified and found to be within expirty date. The said goods under seizure have been sealed in presence of the panchas and deposited with the D.O.II W/H, Mod-I vide APS/M-I/743/08 dated 20.04.08 The original passport and baggage tags bearing Nos.KQ189286 to KQ189300 placed opp. in an envelope. Also the E.T.C. papers alongwith the panchanama are placed opp. As per the instruction of J.C./A.P., the file along with pax Shri Akpuba may be handed over to A.I.U.” 8 In our view the reasons given by the Respondents for retention of the passport of the Petitioner cannot be found fault with. It would be relevant to note that the Respondents were not dealing with any Indian National but a National of a foreign country who was illegally trying to take goods out of India as