Case: M/S. Lokenath Tolaram Etc Vs. B. N. Rangwani &amp; Ors

May, 1965, 5 May, 1966 and 22 April, 1970 in lieu thereof amount aggregating Rs. 99,000 and executed bonds of the value of Rs. 1,80,000. 16. In Civil Appeal No. 1109 of 1971 the Excise Authorities seized 477 and 91 aggregating 568 bales of cotton fabrics of the appellants on 16 March, 1963. The Excise Authorities also seized books of accounts and documents of the appellants. The appellants on 10 May, 1968 made an application under Article 226 of the Constitution in the High Court of Bombay. The appellants asked for a writ of mandamus directing the release of the goods and the books of accounts. The High Court did not accede to the request of the appellants. 17. The two contentions of the appellants in Civil Appeal No. 1109 of 1971 were that the order dated 20 September, 1963 extending the period of giving "show cause" notice was illegal on grounds similar to those in Civil Appeal No. 1133 of 1971. The respondents in Civil Appeal No. 1109 of 1971 repeated the same answers that the ruling in Malhotras case, (1971) 3 SCR 802 = (AIR 1972 SC 689 ) (supra) does not apply by reason of agreement between the appellants and the respondents embodied in similar consent order in interlocutory proceedings in the High Court. During the pendency of the proceedings in the High Court the appellants deposited with the Excise Authorities between the month of April. 1966 and the month of August 1968 Rs. 3,16,016 and executed bonds for the sum of Rs. 4,44,059. The appellants obtained release of the goods namely 568 bales. The amounts deposited were agreed between the parties to be sale proceeds of the goods and treated as goods as seized for the purpose of adjudication proceedings. 18. The Excise Authorities may under Section 110 (1) of the Act seize goods if the proper officer has reason to believe that the goods are liable to confiscation. Where goods are seized under Section 110 (1) of the Act and no notice in respect thereof is given under Section 124 (a) of the Act within six months of the seizure of the goods the goods shall be returned to the person from whose possession they were seized. Section 124 (a) of the Act states that no order confiscating any goods or imposing any penalty on any person shall be made under Chapter XIV of the Act unless the owner of the goods or such person is given a notice in writing informing him of the grounds of confiscation or imposition of penalty. Section 110 (2) of the Act contains a proviso that the period of six months may on sufficient cause being shown be extended by the Collector of Customs for a period not exceeding six months. 19. In Civil Appeals Nos. 1133 and 1109 of 1971 the order of extension on 20 September, 1963 was beyond the period of six months from the date of seizure. In Civil Appeal No. 1132 of 1971 the order was in time. Therefore, the orders for extension of time to serve the notice under Section 124 (a) of the Act could have been exposed to infirmities of limitation as to time (though we do not express any opinion upon it) and observance of principles of natural justice but for the special agreement in the consent orders between the parties in these appeals. 20. Counsel for the appellants contended that if the order dated 20 September, 1963 was not within six months of the seizure of the goods, the appellants were entitled to release of the goods.All the goods have already been released to the appellants. The release is by reason of terms of consent by and between the appellants and the Excise Authorities during the pendency of the appeals in the Bombay High Court. It was next said on behalf of the appellants that the amounts deposited represented the goods and the appellants were entitled to return of the amounts deposited. The contention of the appellants is unsound and unacceptable. The amounts of money which are now retained by the Excise Authorities represent the goods by reason of special agreement between the parties. These agreements came into existence before as well as after 20 September, 1963. After the appellants had obtained release of the goods in accordance with the terms of special agreement embodied in the consent terms, the goods went out of the province of application of S. 110 of the Act for extension of time for serving a notice. 21. There cannot be any question of violation of principles of natural justice or any lack of opportunity to the appellants to show cause in regard to the order dated 20 September, 1963 extending the time for giving the notice under Section 124 of the Act contemplated in Section 110 of the Act. The appellants themselves asked for release of the goods on depositing moneys and executing bonds representing the value of the goods released. The agreements in the present appeals establish that the parties on consideration of all the facts and circumstances waived notice for extending the time within six months of the seizure of the goods. 22. The Excise Authorities are also right in their contention that the appellants have no locus standi to ask for release of the goods because the Bank was in possession of the goods as the pledgee and the Excise Authorities seized the goods from the possession of the Bank. 23. The moneys deposited and the bonds executed by the appellants are really the substituted goods for the purpose of adjudication as to whether there can be any confiscation of goods or imposition of penalty. The parties agreed that the Excise Authorities would retain he securities for the purpose of adjudication proceedings in the event of failure of the appellants in the writ petitions filed by them. 24. The goods were seized in 1963. Long time has lapsed. The Excise Authorities should immediately take steps and complete the adjudication proceedings.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]18. The Excise Authorities may under Section 110 (1) of the Act seize goods if the proper officer has reason to believe that the goods are liable to confiscation. Where goods are seized under Section 110 (1) of the Act and no notice in respect thereof is given under Section 124 (a) of the Act within six months of the seizure of the goods the goods shall be returned to the person from whose possession they were seized. Section 124 (a) of the Act states that no order confiscating any goods or imposing any penalty on any person shall be made under Chapter XIV of the Act unless the owner of the goods or such person is given a notice in writing informing him of the grounds of confiscation or imposition of penalty. Section 110 (2) of the Act contains a proviso that the period of six months may on sufficient cause being shown be extended by the Collector of Customs for a period not exceeding six months19. In Civil Appeals Nos. 1133 and 1109 of 1971 the order of extension on 20 September, 1963 was beyond the period of six months from the date of seizure. In Civil Appeal No. 1132 of 1971 the order was in time. Therefore, the orders for extension of time to serve the notice under Section 124 (a) of the Act could have been exposed to infirmities of limitation as to time (though we do not express any opinion upon it) and observance of principles of natural justice but for the special agreement in the consent orders between the parties in these appeals.All the goods have already been released to the appellants. The release is by reason of terms of consent by and between the appellants and the Excise Authorities during the pendency of the appeals in the Bombay High CourtThe contention of the appellants is unsound and unacceptable. The amounts of money which are now retained by the Excise Authorities represent the goods by reason of special agreement between the parties. These agreements came into existence before as well as after 20 September, 1963. After the appellants had obtained release of the goods in accordance with the terms of special agreement embodied in the consent terms, the goods went out of the province of application of S. 110 of the Act for extension of time for serving a notice21. There cannot be any question of violation of principles of natural justice or any lack of opportunity to the appellants to show cause in regard to the order dated 20 September, 1963 extending the time for giving the notice under Section 124 of the Act contemplated in Section 110 of the Act. The appellants themselves asked for release of the goods on depositing moneys and executing bonds representing the value of the goods released. The agreements in the present appeals establish that the parties on consideration of all the facts and circumstances waived notice for extending the time within six months of the seizure of the goods22. The Excise Authorities are also right in their contention that the appellants have no locus standi to ask for release of the goods because the Bank was in possession of the goods as the pledgee and the Excise Authorities seized the goods from the possession of the Bank23. The moneys deposited and the bonds executed by the appellants are really the substituted goods for the purpose of adjudication as to whether there can be any confiscation of goods or imposition of penalty. The parties agreed that the Excise Authorities would retain he securities for the purpose of adjudication proceedings in the event of failure of the appellants in the writ petitions filed by them24. The goods were seized in 1963. Long time has lapsed. The Excise Authorities should immediately take steps and complete the adjudication proceedings.