SHEWPUJANRAI INDRASANRAI LTD. versus THE COLLECTOR OF CUSTOMS & OTHERS

Citation: [1959] 1 S.C.R. 821 · Decided: 09-05-1958 · Supreme Court of India · Bench: SUDHI RANJAN DAS · Disposal: Appeal(s) allowed
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Judgment (excerpt)

• 
S.C.R. 
SUPREME COURT ·REPORTS 
SHEWPUJANRAI INDRASANRAI LTD. 
v. 
821 
THE COLLECTOR OF CUSTOMS.& OTHERS 
(S. R. DAS C. J., BHAGWATI, S. K. DAs, SuBBA RAo 
and VIVIAN BosE JJ.) 
Smuggled Goods-Violation of provisions of Sea Customs Act 
and Foreign Exchange Regulation Act-Power of Collector. of Cus-
toms to take action under Sea Customs Act-Confiscation-Fine in 
lieu of confiscation-Order of confiscation coupled with conditions for 
release of the smuggled goods-Legality of the order-Sea Customs 
Act, z878 (8 of z878), ss. I9, z67(8), z82, z83-Foreign Exchange 
Regulation Act, z947 (7 of z947), ss. 8, 23. 
The appellant company was carrying on business as a bullion 
merchant and in that capacity purchased about 9478 tolas of 
gold. On information that the gold in question was smuggled, 
the customs authorities issued a notice to the appellant to the 
effect that the case had been placed before the Collector of Cus-
toms for adjudication by the Superintendent, Preventive Service. 
The notice stated inter aJia :-" You are requested to show 
cause ... why penal action should not be taken against you and 
the 9478·19 tolas of gold in question under the provisions of 
ss. 167(8) and 168 of the Sea Customs Act, 1878, for alleged viola-
tion of s. 19 of the same Act read with s. 8 of the Foreign ·· 
Exchange Regulation Act, 1947 ". The Collector of Customs, 
after hearing the parties, came to the conclusion that the gold in 
question was smuggled gold and that there was a contravention 
of the provisions of s. 19 of the Sea Customs Act read with s. 8 
of the Foreign Exchange Regulation Act, and made an order in 
these terms:. "I accordingly order that the entire quantity of 
the gold seized on the 21st November, 1950, amounting to 9478·19 
tolas be confiscated under section 167(8) of the Sea Customs Act. 
In lieu of confiscation, however, I give the owner of the said 
·gold an option under section 183 ibid to pay a fine of 
Rs. 10,00,000 (Rupees ten lakhs only) in addition to the proper 
customs duty and other charge leviable thereon within four 
months from the date of the despatch of this order. The release 
of the gold will be further subject to the production of a permit 
from tht< Reserve Bank of India within the afo1esaid period". 
The appellant challenged the validity of the order and contended 
(r) that on a proper construction of s. 8(3) of. the Foreign 
Exchange Regulation Act read with s. 19 of the Sea Customs 
Act, it was not legally open to the .customs authorities to take 
an.)! action. again.st it under the .Sea Customs Act, as such action 
would prejudice the provisions of s. 23 of the Foreign Exchange 
Regulation Act, and (2) that, in any case, the conditions whicn 
' ' the Collector of Customs had imposed in the impugned order for 
• 
· release of the confiscated gold were not warranted ~y the statute, 
May 9. 
Shewpujanrai 
. .lndrasanrai Ltd. 
v. 
The Collector of 
Customs 
822 
SUPREME COURT REPORTS 
[1959] 
and that as the order was a composite and integrated one it was 
not severable and, therefore, should be quashed: 
Held, (1) that the scope of s. 167(8) of the Sea Customs Act, 
1878, is different from that of s. 23 of the Foreign Exchange 
Regulation Act, 1947· Whereas under s. 23 of the Foreign 
Exchange Regulation Act proceedings are taken in pcrsonam 
against the offender for the purpose of penalising him for the 
contravention of the provisions of the Act,. an order for confisca-
tion of the smuggled goods under s. 167(8) of the Sea Customs 
Act is one in rem. 
There is a difference between the expression " any person 
concerned in any such offence " occurring in the third column of 
s. 167(8) of the Sea Customs Act and the expression "whoever 
contravenes any of the provisions of this.Act" occurring in s. 23 
of the Foreign Exchange Regulation Act. A person may be 
concerned in the importation of• smuggled goods, without being a 
smuggler himself or without himself contravening any of the 
provisions of the Foreign Exchange Regulation Act. 
In this case, the only penalty imposed under s. 167(8) of the 
Sea Customs Act was confiscation of the gold, which indicated 
that the customs authorities had dropped the proceedings in per-
sonam; consequently, the adoption of the procedure under the 
Sea Customs Act did not prejudice in any manner the provisions 
of s. 23 of the Foreign Exchange Regulation Act. The question 
whether two remedies are available to the authorities concerned 
in respect o
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