Rekha Umesh Shetty vs Commissioner of Customs and Others

The petitioner is the widow of one Umesh Rangayya Shetty. She is also a legal heir. She challenges the proceedings so far as the recovery of penalty and which has been imposed on her deceased husband by an order passed and stated to be an order-in-original. That order was passed by the Customs Authority and exercising powers under the Customs Act, 1962 i.e. dated 25th October, 2007 and there is another order dated 18th November, 2010. The letters which have been addressed on 11th September, 2013, 13th November, 2013 and 3rd December, 2013 purport to recover the amount of penalty imposed under these orders and from the widow. The said Umesh Rangayya Shetty expired at Mumbai on 12th February, 2008. The death certificate has also been forwarded.

While it is true that the case was of mis declaration of imports and, therefore, attracted all the liabilities under the Customs Act, 1962 qua Umesh Rangayya Shetty but the goods have been since disposed of. An amount of Rs.27,36,000 /- has been recovered. What remained to be recovered is the quantum of penalty.

In support of the argument that the deceased Umesh Rangayya Shetty was the key person in the impugned irregular import and prime beneficiary of the business of import and sale of the smuggled goods, Mr. Jetly was unable to point out any provision from the Customs Act, 1962 which would enable the Customs Authorities to recover penalty from the heirs of the deceased. The act of import was attributed to the importer and in this case it was inter alia said Umesh Rangayya Shetty. The proceedings under the Customs Act, 1962 resulted in recoveries of customs duty and other amounts. In the light of the violation and breach of the provisions of the Customs Act, 1962 by the said Umesh Rangayya Shetty, even penalty was imposed on him. However, we were not shown any provision by which the amount or quantum of penalty could have been recovered and from the wife of the deceased.

In the circumstances, we do not find that the communications which have been addressed to the petitioner are legally tenable. The provisions of Section 147 of the Customs Act, 1962 and the prior provisions enabling recovery of dues to the Government would not enable the respondents in the given facts and circumstances to recover the amount of penalty. Apart from these provisions there has been no other Section or provision brought to our notice.

In the circumstances, we are of the view that the amount of penalty cannot be recovered and from the petitioner. The Writ Petition to that extent succeeds. The impugned communications are quashed and set aside. However, we clarify that we have not interfered with the orders-in-original nor the confirmation thereof in any appeal proceedings. Therefore the liability of all those and to pay such amounts as are liable to be paid and recoverable from equally those succeeding to the estate of the deceased can still be recovered and in accordance with law. This order shall stand restricted to the recovery of penalty and qua the wife of the deceased, the petitioner before us. All other remedies and which have been or may be instituted insofar as recovery of the duty amount pursuant to the liability in relation thereto of the deceased can continue and uninfluenced by this order. However, all contentions of both sides including the petitioner in that regard are kept open. The Petition is disposed off accordingly. No costs.