OSWAL SPINNING & WEAVING MILLS LTD. versus COLLECTOR OF CUSTOMS & ANR.

Citation: [1988] 3 S.C.R. 601 · Decided: 19-04-1988 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Disposed off

Judgment (excerpt)

OSWAL SPINNING & WEAVING MILLS LTD. 
A 
v. 
COLLECTOR OF CUSTOMS & ANR. 
APRIL 19, 1988 
[R.S. PATHAK, C.J., RANGANATH MISRA AND 
B 
B.C. RAY, JJ.I 
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Customs Act, 1962-Challenging order of penalty for release of 
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goods imported through canalised agency and confiscated by Collector 
._\,. 
of Customs under lll(d) and (m)-Of-Whether it is liability of 
Customs authorities or Port Trust authorities to account for and c 
compensate if imported goods are not traceable after confiscation-
Determination of question. 
This was an appeal under Section 130-E of the Customs Act, 1962 
against the judgment and order of the Customs Excise and Gold D 
(Control) Appellate Tribunal, New Delhi. 
The appellant imported 58 bales of Woollen rags from Canada, 
,,.. 
and filed the bill of entry for release of the goods, described as woollen 
rags. The goods were found by the Customs authorities to be acrylic 
rags and not woollen rags. The Collector of Customs ordered confisca-
E 
tion of the goods under section lll(d) and (m) of the Customs Act, but 
in lieu of confiscation, the appellants were given the option under section 
125 of the Act to clear the goods on payment of redemption fine of 
·--t 
Rs.50,000. The appellants appealed to the Central Board of Excise and 
Customs which sustained the order of confiscation but reduced the 
redemption fine to Rs.20,000, and also directed that the goods be 
released after they were mutilated to the satisfaction of the Collector of F 
Customs so as to render them unfit for use except as rags, and after 
payment of appropriate duty. The appellants moved a revision against 
the Board's order, whereon the Customs, Excise and Gold (Control) 
Appellate Tribunal passed an order, directing that the goods be re-
leased on payment of customs and other related duties with countervail-
G 
;).. 
ing duty Ieviable under the Central Excise Tariff and subject to Board's 
order about payment of redemption flue and mutilation of the goods. 
The appellants then moved this Court for relief by this appeal under 
Section 130-E of the Customs Act. 
Disposing of the appeal the Court, 
H 
601 
A 
B 
c 
D 
602 
SUPREME C::OURT REPORTS 
11988] 3 S.C.R. 
HELD: Per Ranganath Misra, J. (on behalf of R.S. Pathak, CJ. 
and on his own behalf)--On 17th December, 1986, this Court had 
directed waiving of the redemption fine. The appellants complained 
that a part of the goods was not traceable, whereupon notice was issued 
to the Calcutta Port Trust which was joined as respondent No. 2 to the 
appeal. The only question surviving for examination was as to the 
availability of the goods, return whereof had to be made to the appel-
J. 
lants, and in case the whole or part of the goods was not traceable, in 
what waycthe direction of the Tribunal for return of the goods had to be 
worked out. [605G-H] 
In view of the provisions of the Act, viz sections 45, 47, 125 and 
126, there can be little scope to dispute that until the goods are cleared 
for home. consumption, the scheme of the Act requires the goods 
to'. remain in the hands of the Customs authorities and obviously the 
statutory authority to account for the goods would be of the autho-
rities under the Act charged with the responsibility of keeping the 
goods. l606G-H] 
19 bales were alleged to be missing and parts of some of the 
av.ailable goods were alleged to have been taken out and made into 
independent bales. These allegations were not accepted by the resp.in-
dent No. 1. The Respondent No. 2 denied any liability. In case, it was 
ultimately found that the Customs authorities by themselves had the 
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E 
total liability to account for the goods or in case their said liability had 
to be shared by the Calcutta Port Trust and even though one or both 
were liable to account for the goods and they had failed to do so, in what 
manner the appellants would be compensated were matters which 
required factual consideration, warranting reception of evidence. This 
proceeding before the Court was not appropriate for looking into this 
F 
part of the grievance. In this situation, the order of the Tribunal as 
modified by this Court for the return of the goods could not be fully 
given effect to. The Court considered it appropriate to require the 
Tribunal to finally dispose of this question. In case the goods were not 
finally traceable and the liability to account for the goods was fixed 
on one or both of the respondents, the Tribunal would decide what 
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amount of c

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