M/S. J.K. BARDOLIA MILLS versus M.L. KHUNGER, DY. COLLECTOR AND ORS.

Citation: [1994] SUPP. 1 S.C.R. 756 · Decided: 18-07-1994 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
MIS. J.K. BARDOLIA MILLS 
v. 
M.L. KHUNGER, DY. COLLECTOR AND ORS. 
JULY 18, 1994 
[KULDIP SINGH ANDS. MOHAN, JJ.] 
Customs Act, 1962--·Sections 110(1) & (2), 123 and 124--Seizure of 
goods under section 110( !)-Notice u/s 110(2)served after statutory period of. 
six months--lnvali<f--Adjudication proceedings and confiscation order--
Validity challenged-Whether provisions of Section 123 would be attracted in 
a case where retention of goods has become illegal u/s 110(2) because no 
notice as required under said provision was served within statutory period. 
Packages of synthetic fabrics of foreign origin were seized u/s 110 of 
the Customs Act, 1962, on May 29, 1969. The show cause notice as con-
D templated by Section 124(1) (a) and under section 110 was given on Decem-
ber 19, 1969. Goods were conOscated by an order under Section 112(b) and 
a penalty of Rs. 50,000 was imposed on the appellant. Orders of Assistant 
Collector were challenged on the ground that the said notice, having been 
served on the appellant after the statutory period of six months, the 
E custom authorities were debarred from holding the adjudication proceed-
ings in respect of the goods in dispute. 
Dismissing the appeal, this Court 
HELD : When the goods are seized under Section 110(1) of the 
F 
Customs Act that amounts to seizure of the goods under the Act and as 
such the conditions for invoking the provisions of Section 123 of the Act 
are satisfied by the mere factum of seizure. The effect of non-compliance 
of the provisions of Section 110(2) would only be that the seized goods are 
returned to the person from whose possession they were seized. It would 
G not render the initial seizure of the goods illegal. The seizure of the goods 
under Section 110(1) by itself is sufficient to comply with the requisite 
condition under Section 123 of the Act. What happens to the goods 
thereafter is of no consequence. (761-D-E) 
Assistant Collector, Custom v. Charan Das Malhotra, A.I.R. (197i) SC 
H 689 and Chaganlal Gainmull v. Collector of Central Excise & Ors. (1990) 
756 
J.K. BARDOLIA MILLS v. M.L. KHUNGER [KULDIP SINGH, J.) 
757 
Supp. sec 527, referred to. 
A 
CIVIL APP ELLA TE JURISDICTION : Civil Appeal No. 1913 of 
1974. 
From the Judgment and Order dated 1/2.11.73 of the Gujarat High 
Court in S.C.A. No. 576 of 1973. 
B 
Hardev Singh and Ms. Madhu Moolchandani for the Appellant. 
Joseph Vallav Pallai, K. Swamy, P. Parmeswaran and C.V.S. Rao for 
the Respondents. 
The Judgment of the Court was delivered by 
c 
KULDIP SINGH, J. The question for our consideration in this 
appeal is whether the provisions of Section 123 of the Customs Act, 1962 
(the Act) would be attracted in a case where the retention of the goods 
has betome illegal under Section 110(2) of the Act because no notice as D 
required under the said provision was served within the statutory period. 
The factory premises of the appellant-firm were raided by the Cus-
tom authorities on May 26, 1969 and 28 packages of synthetic fabrics of 
foreign origin were seized. The seizure was made under Section 110 of the E 
Act. By the order dated November 27, 1969 the Collector Customs ex-
tended the period for the issue of show cause notice prescribed under 
Section 124 of the Act by two months from the date of the order. Finally, 
the show cause notice in terms of section 124(1)(a) of the Act was received 
by the appellant-firm on December 26, 1969. The Assistant Collector, 
Bombay by the order dated February 24, 1971 under Section 112(b) of the F 
Act, confiscated the goods in dispute and also imposed a penalty of Rs. 
50,000 on,be appellant. The appeal filed against the order of the Assistant · 
Collector was dismissed by the Appellate Collector. The appellant chal-
lenged the orders of the Assistant Collector and the Appellate Collector 
by way of a writ petition under Article 226/227 of the Constitution of India G 
· before the High Court of Gujarat at Ahmedabad. The High Court. dis-
missed the writ petition with cost. This appeal, by way of special leave, is 
against the judgment of the High Court. 
It was contended before the High Court that the goods in dispute 
were seized by the Customs authorities on May 29, 1969 and the notice as H 
758 
SUPREME COURT REPORTS [1994] SUPP. I S.C.R. 
A 
contemplated by Section 124(l)(a) read with Section 110 of the Act was 
given on December 19, 1969. The said notice, having been served on the 
appellant after the statutory period of 

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