Case: The Collector Of Customs, Baroda Vs. Digvijaysinhji Spinning &amp; Weaving Mills Ltd

2. The material facts may be briefly stated. The respondent is Digvijayasinhji Spinning and Weaving Mills Limited, Jamnagar. It imported 275 cases of second-hand looms under one consignment and 175 cases of second-hand textile waste to plant machinery under another consignment from Pondicherry. The respondent held licences for import of goods of a lesser value than the value of these consignments. The Collector of Customs, Baroda, ordered the said goods to be confiscated under S. 167(8) of the Act; and in lieu of confiscation an option was given to the respondent to pay a fine of Rs. 22,918 and Rs. 16,000 in respect of the two consignments. Further, on the ground that the respondent had understated the value of the goods imported under the first consignment, the appellant imposed a penalty of Rs. 500 under S. 167(37)(c) of the Act. Against the said order, the respondent preferred two appeals to the Central Board of Revenue and the said Board, by its order dated January 15, 1954, set aside the orders of the appellant and instead imposed a penalty of Rs. 22,918 in regard to the first consignment and Rs. 16,000 in regard to the other under S. 167(8) of the Act; but the penalty of Rs. 500 was however maintained. In revision the Government of India modified the order of the Central Board of Revenue by cancelling the penalty of Rs. 500 and in other respects it confirmed the order of the said Board. The respondent cleared the goods on executing a bond in favour of the appellant. As the respondent did not pay the penalty, the appellant, acting under S. 193 of the Act, notified the default in writing to the First Class Magistrate at Jamnagar so that the penalty might be recovered in the manner prescribed by the said section as if the said penalty was a fine inflicted by the Magistrate himself. On the said requisition the Magistrate issued warrants of attachment against the respondent, but the latter filed a petition before him for the cancellation of the said warrants on the ground that the order of the Central Board of Revenue was illegal and also on the ground that the appellant had no jurisdiction to take action under S. 193 of the Act. The Magistrate, by his order dated May 8, 1956, held that the appellant could validly realize the said amounts under the machinery provided under S. 193 of the Act. Against the said order of the Magistrate the respondent preferred an appeal to the Sessions Judge, Halar, Jamnagar, but it was later converted into a revision and was dismissed. On revision to the High Court against that order, the High Court held that as the penalty was imposed by the Central Board of Revenue, the appellant could not realize the said amounts under S. 193 of the Act; it also expressed an opinion that the final order of the appellate authority was not without jurisdiction as it was not shown that consent of the owner of the goods ordered to be confiscated had not been obtained by the Central Board of Revenue before the order commuting the confiscation to penalty was passed. In the result, the High Court set aside and cancelled the warrants of attachment issued by the Magistrate. Hence the appeal.

Court's reasoning:
The result of the provisions, therefore is that there would never by a contingency or necessity for an appellate tribunal to enforce payment of penalty imposed by it, for no appeal would be heard by it unless the penalty was deposited asconstruction, it is said, would lead to an anomaly of the statute conferring a power on the Chief Customs Authority to impose a penalty and at the same time withholding from it a procedure to enforce its collection. As we have pointed out, such an anomaly cannot arise under the provisions of the Act, for there is no section which empowers the Chief Customs Authority to impose a penalty higher than that imposed by the Customs Officer.6. Assuming that the Chief Customs Authority is an Officer of Customs within the meaning of S. 193 of the Act, it had to initiate proceedings under the said section; but in this case the Collector of Customs notified in writing to the Magistrate for recovering the saidis said that this legal position would flow from the proposition that an appeal is a continuation of a suit. The said proposition isneither the said decisions nor the principles laid down therein can have any bearing on the question whether an order made for the first time by an appellate authority could in law be deemed to be one made by the original authority. In the absence of any statutory fiction giving rise to that result, it is not permissible to treat the order made by one authority as that made by another authority. If so, it follows that the order of the Chief Customs Authority imposing a penalty for the first time cannot be treated to be an order of the Collector of Customs within the meaning of the S. 193 of thethese questions need not detain us, as we are not satisfied on the material placed before us that the condition of consent has been fulfilled in this case. The High Court in effect drew a presumption in favour of the regular performance of an official act. But this presumption is only optional. In a case like this when the validity of an order depends upon the fulfilment of a condition, the party relying upon the presumption should at least show that the order on the face of it is regular and is in conformity with the provisions of the statute. But in the present case the order of the Chief Customs Authority ex facie does not show that it was made under S. 190 of the Act. Indeed it is purported to have been made under S. 167 (8) of the Act. If as a matter of fact the said Authority made the order of commutation with the consent of the owner of the goods it would have certainly jurisdiction to make such an order under S. 190 of the Act. Though there was no such recital, it would have been open to the appellant to establish that fact by necessary evidence. In the absence of any such evidence we must hold that it has not been established that the Chief Customs Authority made its order under S. 190 of the Act with the consent of the respondent.9. This will not preclude the State from establishing by relevant evidence that the penalty was imposed under S. 190 of the Act with the consent of the owner of the goods in an appropriate proceeding.