# THE COLLECTOR OF CU$TOMS, BARODA v. DIGVIJAYSINHJI SPINNING & WEAVING MILLS LTD

- **Citation:** [1962] 1 S.C.R. 896
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Case number:** Criminal Appeal No. 74 of 1960
- **Bench:** Ic Subba Rao, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-collector-of-cu-toms-baroda-v-digvijaysinhji-spinning-weaving-mills-ltd-2104
- **Pages:** 10

## Headnote

Import-Confiscation of goods b_y Collector of CustomsPenalt_y substituted for confiscation b_y Board of Revenue, if can be
realised bJ the Collector of Customs-Sea Customs Act, r878 (VIII
of 1878), SS. I67(8), I93.
The respondent imported goods of higher value than what
was granted under his licence. The Collector of Customs ordered the goods to be confiscated under s. r67(8) of the Sea Customs
Act, +878 and in lieu of confiscation gave an option to the respondent to a fine.
On appeal the Central Board of Revenue set
aside the order of the Collector of Customs and instead of it
imposed a penalty. The respondent did not pay the penalty and
the Collector of Customs took proceedings under s. r93 of the Act
for;the recovery of the penalty in pursuance of which a Magistrate issued warrants of attachment against the respondent holding that the Collector of Customs could validly realise the penalty
under s. r93 of the Act. The Sessions Judge dismissed the respondents application in revision but the High Court held that
as the penalty was imposed by the Central Board of Revenue
the Collector of Customs could not realise the amount of the
penalty under s. r93 of the Act and also held that the order of
the Central Board of Revenue commuting the confiscation to
penalty was not without jurisdiction. On appeal by special
Jeave 1
Held, that the Central Board of Revenue which is the
"Chief Customs Authority" cannot be called an "officer of cu·stoms", and 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 s. r93 of the
Sea Customs Act, r873, andl as such the Collector of Customs
could not realise the penalty imposed by the Central Board of
Revenue.
Rangaswam_y v. Alaga_yammal, A.LR. (r9r5) Mad. n33,
Kristnamachariar v. Mangammal, (1902) I.L.R. 26 Mad. gr and
Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, (r940)
F.C.R. 84, held not applicable.
CRIMINAL
APPELLATE
JURISDICTION:
Criminal
Appeal No. 74 of 1960.
Appeal by special leave from the judgment and
order dated August 8, 1957, of the Bombay High
' '
•
I
'
1 S.C.R. SUPREME COURT REPORTS
897
Court at Rajkot in Criminal Revision Application No.
10 of 1956.
B. K. Khanna and T. llf. Sen, for the appellant.
Rame~hwr:tr Nath, S. N. Arulley and P. L. Vohra,
for the respondent.
1961. April 12.
The Judgment of the· Court was
delivered by.
SuBBA RAo, J.-This appeal by special leave is
against the order of the Bombay High Court at Rajkot setting aside the warrants of attachment issued by
the First Class Magistrate, J amnagar, for enforcing
the penalty imposed on the respondent under s. 193
of the Sea Customs Act, 1878, (hereinafter called the
Act).
The material facts may be briefly stated. The respondent is Digvijayasinhji Spinning & Weaving Mills
Limited, Jamnagar. It imported 275 cases of secondhand 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 modifi

## Text

196z
April I2,
(
896
SUPREME COURT REPORTS
[1962]
THE COLLECTOR OF CU$TOMS, BARODA
v.
DIGVIJAYSINHJI SPINNING & WEAVING
MILLS LTD.
(IC SUBBA RAO and RAGHUBAR DAYAL, JJ.)
Import-Confiscation of goods b_y Collector of CustomsPenalt_y substituted for confiscation b_y Board of Revenue, if can be
realised bJ the Collector of Customs-Sea Customs Act, r878 (VIII
of 1878), SS. I67(8), I93.
The respondent imported goods of higher value than what
was granted under his licence. The Collector of Customs ordered the goods to be confiscated under s. r67(8) of the Sea Customs
Act, +878 and in lieu of confiscation gave an option to the respondent to a fine.
On appeal the Central Board of Revenue set
aside the order of the Collector of Customs and instead of it
imposed a penalty. The respondent did not pay the penalty and
the Collector of Customs took proceedings under s. r93 of the Act
for;the recovery of the penalty in pursuance of which a Magistrate issued warrants of attachment against the respondent holding that the Collector of Customs could validly realise the penalty
under s. r93 of the Act. The Sessions Judge dismissed the respondents application in revision but the High Court held that
as the penalty was imposed by the Central Board of Revenue
the Collector of Customs could not realise the amount of the
penalty under s. r93 of the Act and also held that the order of
the Central Board of Revenue commuting the confiscation to
penalty was not without jurisdiction. On appeal by special
Jeave 1
Held, that the Central Board of Revenue which is the
"Chief Customs Authority" cannot be called an "officer of cu·stoms", and 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 s. r93 of the
Sea Customs Act, r873, andl as such the Collector of Customs
could not realise the penalty imposed by the Central Board of
Revenue.
Rangaswam_y v. Alaga_yammal, A.LR. (r9r5) Mad. n33,
Kristnamachariar v. Mangammal, (1902) I.L.R. 26 Mad. gr and
Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, (r940)
F.C.R. 84, held not applicable.
CRIMINAL
APPELLATE
JURISDICTION:
Criminal
Appeal No. 74 of 1960.
Appeal by special leave from the judgment and
order dated August 8, 1957, of the Bombay High
' '
•
I
'
1 S.C.R. SUPREME COURT REPORTS
897
Court at Rajkot in Criminal Revision Application No.
10 of 1956.
B. K. Khanna and T. llf. Sen, for the appellant.
Rame~hwr:tr Nath, S. N. Arulley and P. L. Vohra,
for the respondent.
1961. April 12.
The Judgment of the· Court was
delivered by.
SuBBA RAo, J.-This appeal by special leave is
against the order of the Bombay High Court at Rajkot setting aside the warrants of attachment issued by
the First Class Magistrate, J amnagar, for enforcing
the penalty imposed on the respondent under s. 193
of the Sea Customs Act, 1878, (hereinafter called the
Act).
The material facts may be briefly stated. The respondent is Digvijayasinhji Spinning & Weaving Mills
Limited, Jamnagar. It imported 275 cases of secondhand 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
II3
Collector of
Cus~oms, Baroda
v.
Digvijaysinhji
Spinning &
Weaving Mills
Ltd.
Subba Rao ].
Ig6r
Collector of
Custo1ns, Baroda
v.
Digvijaysinhji
Spinning &
Weaving Mills
Ltd.
Subba Rao ].
898
SUPREME COURT REPORTS
[1962]
other respects it confirmed the order of the said
Board. Th.e 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 J amnagar 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, b'ut 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 Revenue, the -appellant could not
realize the said amounts under 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 J\!Iagistrate.
Hence the appeal.
·
Learned counsel for the appellant broadly contended that s. 193 of the Act should be liberally construed
with a view to effectuate the intention of the legislature and if so construed the order of the Central
Board of Revenue made in substitution of that of an
officer of Customs could be enforced by the latter
officer under the said section. On the other hand,
' '
..
-
•
I S.C.R. SUPREME COURT REPORTS
899
learned counsel for the respondent argued that the
I96I
Central Board of Revenue was not an officer . of Cusc 11
1
toms within the meaning of s. 193 of the Act and cus;,~;'.
0
;.:oda
therefore its order could not be enforced under the
v.
said section by an officer of Customs; and that even if Digvijaysinhji
the Board, being the Chief Customs Authority, could
Spinning '"'
be considered to be an "officer of Customs" within the W.av7~ M•lls
meaning of those words, the said Chief Customs
1
•
Authority only could enforce the said order and not the subba Rao J.
Collector of Customs.
To appreciate the rival contentions and to provide
a satisfactory solution to the problem presented it is
necessary to read the .relevant provisions of the Act,
not only to understand the scheme of the Act but also
to construe the· provisions of s. 193 thereof in the light
of the scheme disclosed by the said provisions. It is
one of the well established rules of construction that
"if the words of a statute are in themselves precise
and unambiguous no more is necessary than to expound those words in their natural and ordinary
sense, the words themselves in such case best declaring
the intention of the legislature''. It is equally well
settled principle of construction that "Where alternative constructions are equally open that alternative
is to be chosen which will be consistent with the
smooth working of the system which the statute purports to be regulating; and that alternative is to be
rejected which will introduce uncertainty, friction or
confusion into the workiug of the system." With this
background and having regard to the aforesaid two
. principles of construction, let us at the outset scrutinize the scheme of the Act. Section 3 defines "Chief
Ctrntoms-authority" to mean the Central Board of
Revenue.
"Customs-collector" is defined to include
"every officer of Customs for the time being in separate charge of a custom-house, or duly authorized to
perform all, or any special, duties of an officer so in
charge." Section 19 confers a power on the Central
Government to prohibit or restrict the importation or
exportation of goods by sea or by land. Section 167
prescribes the various punishments for offences under
the Act.
Section 167(8) says that if any goods, the
Collector of
Customs, Baroda
v.
Digvijaysinhji
Spinning &
Weaving Mills
Lid.
Subba Rao ].
'
900
SUPREME COURT REPORTS
[1962]
importation or exportation of which is for the time
being prohibited or restricted by or under Chapter IV
of the Act, be imported into or exported from India
contrary to such prohibition or restriction, such goods
shall be liable to confiscation; and any person concerned in any such offence shall be liable to a penalty
not exceeding three times the value of the goods, or
not exceeding one thousand rupees. Under s.167(37)(c),
if it be found, when any goods are entered at, or
brought to be passed through, a custom-house, either
for importation or exportation, that the contents of
such packages have been misstated in regard to sort,
quality, quantity or value, such packages shall be
liable to confiscation and every person concerned in
any such offence shall be liable to a penalty not exceeding one thousand rupees. Sectio:rf 182, empowers the
Collector of Customs to adjudicate whether anything
is liable to confiscation, increased rate of duty or any
person is liable to a penalt,Y- Section 183 enjoins on such
authority to give the owner of goods so confiscated
an option to pay in lieu of confiscation such fine as it
thinks fit.
Section 188 gives a right of appeal from
such an order to the Chief Customs Authority who is
empowered to pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against; but under the proviso to that section the
said appellate authority cannot make an order subjecting any person to any greater confiscation, penalty or
rate of duty than has been adjudged against him in
the original decision or order. Every order passed
under this section is final subject to the power of
revision conferred by s. ·191 on the Central Government. Section 190 confers a power on the Chief
Customs Authority to remit penalty, increased rate or
confiscation in whole or in part; it also enables tlie said
authority, with the consent of the owner of the goods
ordered to be confiscated to commute the order of confiscation to a penalty not exceeding the value of such
goods. Section 190A gives a power of revision to the
Chief Customs Authority against an order of any officer
of Customs passed under the Act and enables it to pass
such order thereon as it thinks fit. Then comes the
•
,_
•
;
1 S.C.R. SUPREME COURT REPORTS
901
crucial s. 193. As the argument turns upon the proviz96z
sions of this section, it would be convenient to read
h
·
t'
t th'
t
Collector of
t e entire sec 10n a
1s s age.
c ,
B
d
.
l
.
us oms,
aro a
Section 193: "When a pena ty or mcreased rate
v.
of duty is adjudged against any person under this Digvijaysinhji
Act by any officer of customs, such officer, if such
Spinning &
penalty or increased rate be not paid, may levy the Weaving Mills
same by sale of !tnY goods of the said person which
Ltd.
may be in his charge or in the charge of any other
Subba Rao J.
officer of Customs.
When an officer of Customs who has adjudged a
penalty or increased rate of duty against any person
under this Act is unable to realise the unpaid
amount thereof from such goods, such officer may
notify in writing to any Magistrate within the local
limits of whose jurisdiction such person or any
goods belonging to him may be, the name and residence of the said person and the amount of penalty
or increased rate of duty unrecovered; and such
Magistrate shall thereupon proceed to enforce payment of the said amount in like manner as if such
penalty or increased rate had been a fine inflicted
by himself."
Pausing here, let us recapitulate the gist of the aforesaid provisions.
Under the Act the goods, whose
importation or exportation is prohibited or restricted
by the provisions of the Act, are liable to be confiscated and also the person concerned is liable to a penalty.
Even a mis-statement in regard to sort, quality, quantity or value of the goods so imported or exj1orted is
an offence and the packages, with their contents, are
liable to be confiscated and the person concerned in
any such offence is also liable to penalty. The Collector of Customs can make an order confiscating the
said goods as well as imposing a penalty on tho person
concerned. In an appeal against that order, the Chief
Customs Authority can modify the said order, but it
has no power to increase the burden. It can remit
such penalty or confiscation, in whole or in part, but
it can also commute the order of confiscation to
penalty not exceeding the value of such goods.
A
person desiring to file an appeal against an order of
Collector of
Customs, Baroda
v.
Digvijaysin.hji
Spinning &-
Weaving Mills
Ltd.
Subba Rao J.
902
SUPREME COURT REPORTS
[1962]
penalty passed by an officer of Customs shall, pending
an appeal, deposit in the hands of the Customs-collector at the port where the dispute arises the amount
demanded by the officer passing such decision or order;
and if he succeeds wholly or in part, the whole or such
part thereof, as the caRe may be, shall be returned to
him. The result of the provisions, therefore, is that
there would never be a contingency or necessity for an
appellate tribunal to enforce payment of penalty
imposed by it, for no appeaf would be heard by it
unless the penalty was deposited as aforesaid.
With this background let us look at the relevant
provisions of s. 193 of the Act. Under the said section
only an officer of Customs, who has adjudged a penalty
or increased rate of duty, can realize the said penalty
or rate through the machinery of a Magistrate. The
question is whether the Chief Customs Authority is
"an officer of Customs" who has adjudged a penalty
or rate, as t.he case may be, within the meaning of
s. 193 of the Act. Section 182 of the Act enumerates
the different officers of Customs who are empowered
to adjudge a question of penalty, but the Chief Customs Authority is not included in that list. Indeed, in
s. 182(c) the Chief Customs Authority is empowered to
nominate the subordinate officers of CuStoms to adjudge questions within certain pecuniary limits. That
apart, s. 3(a) of the Act defines "Chief Customs-authority" to mean the Central Board of Revenue. The
Central Board of Revenue is a statutory authority
and, though it can only function through officers
appointed to the said Board, it is inappropriate to call
it an officer of Customs. In this situation, when under
the provisions of the Act there is no scope for realization of any penalty imposed for the first time by the
Chief Customs Authority, it would be more in accord
with the scheme of the Act to construe the words "an
officet of Customs" as an officer of the Customs who is
authorized to adjudicate in the first instance on the
question of confiscation, increased rate of duty or
penalty under s. 182 of the Act. This construction, it
is said, would lead to an anomaly of the statute conferring a power on the Chief Customs Authority to
•
;
1 S.C.R. SUPREME COURT REPORTS
903
impose a penalty and at the same time withholding
z96z
from it a procedure to enforce its collection. As we
have pointed out, such an anomaly cannot arise under
Collec(or 0!
th
· ·
f th A. t
I.'
th
·
t"
h" h Customs, Baroda
e provisIOns o
e c , 1or
ere IS no sec 10n w IC
v
empowers the Chief Customs Authority to impose a
Digvija~sinhji
penalty higher than that imposed by the Customs
spinning o;.
Officer.
Weaving Mills
Assuming that ·the Chief Customs Authority is an
Ltd.
Officer of Customs within the meaning of s. 193 of the Subba Rao J.
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
said penalty.
Learned counsel for the appellant contends that an
order made by the Chief Customs Authority imposing
a penalty shall be deemed in law to be an order made
by the original authority, that is, the Collector of Customs and, therefore, the said order for the purpose of
enforcement shall be treated as the order of the
Collector of Customs. It is said that this legal position would flow from the proposition that an appeal
is a continuation of a suit. The said proposition is
unexceptionable: see Rangaswamy v. Alagayammal (1),
Kristnamachariar v.
Mangammal ('), Lachmeshwar
Prasad Shukul v. Keshwar Lal Chaudhuri('). But
neither 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 s. 193 of the Act.
As we have pointed out, the Chief Customs Authority has no power to impose a penalty for the first
time under s. 188 of the Act; but it has power under
(1) A.I.R'.. 1915 Mad. 1133.
(2) (1902) I.L.R. 26 Mad. 91, 95·96.
(3) (1940) F.C.R. 84, 103.
Colleclo,.. of
Custo1ns, Baroda
v.
Digvijaysinhji
Spinning &
Weaving Al ills
Ltd.
Subba Rao ].
904
SUPREME COURT REPORTS
[1962]
s. 190 of the Act to commute the order of confiscation
to a penalty not exceeding the value of the goods
confiscated. Though the Chief Customs Authority in
its order dated January 15, 1954, did not expressly rely
on s. 190 of the Act, it cannot be disputed that it ha.s
jurisdiction to pass such an order thereunder subject
to the conditions laid down therein. The condition
for the exercise of that power is that it should have
obtained the consent of the party whose goods were
confiscated. The High Court in its order observed that
there was nothing before it to show that the consent
of the owner of the goods ordered to be confiscated
was not obtained before the order of confiscation was
commuted to one of penalty by the Chief Customs
Authority. If that be taken as a finding the question
of the legal effect of an order of commutation would
arise for consideration. Would such an order be deemed to be made in substitution of that of an original
authority? Could it be said that the commuted sentence
shall be deemed in law a sentence imposed by the
original tribunal? But these 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
•
.I
'•
>
l S.C.R. SUPREME COURT REPORTS
905
not been established that the Chief Customs Authority
made its order under s. 190 of the Act with the consent of the respondent.
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.
In the result the order of the High Court )s correct
and the appeal is dismissed.
Appeal dismissed.
DAJI KRISHNAJI DESAI TAMBULKAR
v.
GANESH VISHNU KULKARNI AND OTHERS
(K. SUBBA RAO, RAGHUBAR DAYAL and
J. R. MUDHOLKAR, JJ.)
Khoti Land-Transfer prior to Ig46 without consent of KhotRights of purchaser-Bombay Tenancy Act, I939 (Bom. 290] I9J9),
s. 3r-Khoti Settlement Act, I88o (Born. I of I88o), ss, 3, 9,
The land in suit was Khoti land and s. 9 of the Khoti
Settlement Act, r88o, prior to its amendment prohibited the
transfer of the occupancy right without the consent of the Khot.
Section 31 of the B)mbay Tenancy Act, r939, which came into
force from April 1946, amended s, 9 of the Khoti Settlement Act
by which no consent of the Khot was necessary for transferring the occupancy rights in the land.
In 1892, R sold his
occupancy right without the consent of the Khot to L, the predecessor-in-interest of respondent No. I. In 1945, R's successor
again sold the same occupancy right to the appellant also without the consent of the Khot. The appellant's case was that the sale
deed in 1892 in favour of the predecessor-in-interest of respondent No, r was void as the transfer of the occupancy right was
made ·without consent of the Khat; whereas respondent No. l
contended that R by the sale deed in 1892 had already lost, his
right to the property in suit and therefore R's successors had no
title to pass in 1945 in favour of the appellant.
Held, that the occupancy right in a Khoti land could not
be transferred without consent of the Khat prior to April r946,
when the Bombay Tenancy Act, 1939, came into force.
Il4
Ig6I
Colltctor of
Customs, Baroda
v.
Digvijaysinhji
Spinning &
fVeaving 1\-1 ills
Ltd.
Subba Rao ].
April I2.