The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), slammed the Customs Department as the confiscation of immovable property was made without valid notice under the Customs Act, 1962 and the Tribunal commented that such act an act compromises the integrity of adjudication process.
The appeal of Prakash Mistry is attached upon the scope and extent to which section 121 of Customs Act, 1962 may be invoked against property that ostensibly had no connection with any activity within the purview of Customs Act, 1962 and arises from proceedings before Commissioner of Customs (Appeals), initiated by the appellant, without success, against order of Additional Commissioner of Customs (Import), confiscating immoveable property belonging to the appellant.
The counsel for appellant submitted that the appropriation of flat no. 2401 in proceedings relating to alleged smuggling of gold was entirely uncalled for. It was contended that the procedure under section 124 of Customs Act, 1962 was not complied with inasmuch as the appellant, as owner of the property, had not been put to notice of intention to confiscate under section 121 of Customs Act, 1962 and, thereby, was unable to plead his lack of connection with the alleged offence.
It was further contended that the noticees in the proceedings would have been handicapped in attempting to disprove lack of title to the said property.
A Two-Member Bench comprising CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “Confiscation of sale proceeds of smuggled good is authorized by section 121 of Customs Act, 1962. Without going into the issue of intent of ‘sale’ therein, we find that the appellant was not placed on notice of proposal to confiscate his property.”
The Tribunal further noted that notice is a pre-requisite and ‘constructive notice’ at that. Inclusion of such proposal in a notice issued to another is premised on conclusion that the property is owned by such notice. That, in itself, is premature and compromises the integrity of adjudication proceedings.
“Indeed, both the lower authorities have failed to determine ownership of the property in question and have merely concerned themselves with its alleged characteristic as ‘sale proceeds’ of smuggled goods for dealing with it in the context of finding on gold having been smuggled. This is a dangerous trend for such action could be used whimsically to deprive any legal owner of property – an act of expropriation under cover of law” the Bench commented.
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