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Issues: Whether the Customs authorities were entitled to interim custody of foreign-made foreign liquor intercepted while being transferred from one bonded warehouse to another, and whether the Excise authorities could seize the goods during such transfer.
Analysis: The Customs Act was applied to the warehousing and transfer of imported dutiable goods. The provisions relating to appointment of warehouses, licensing of private warehouses, execution of bond, deposit of goods, control of warehoused goods, and removal from one warehouse to another showed that imported liquor already placed in the customs warehousing channel could lawfully be moved between bonded warehouses with the permission of the proper officer. The record showed that the goods had been imported, deposited in a bonded warehouse, and were being transported to another bonded warehouse when seized. In that situation, the goods remained in the custody and control of the Customs authorities, and the Excise authorities were not entitled to interfere with that custody. At the same time, any eventual delivery to an FL-3 licensee had to conform to the Kerala Abkari law and the Foreign Liquor Rules.
Conclusion: The petitioner was entitled to interim custody of the seized liquor, and the order refusing such custody was set aside.
Final Conclusion: Imported foreign liquor in transit between bonded warehouses remained within the customs warehousing regime, so seizure by the Excise authorities was unsustainable and interim custody had to be restored to the Customs authorities.
Ratio Decidendi: Goods lawfully imported and kept within the customs warehousing process, including transfer from one bonded warehouse to another with permission, remain under the control of the proper customs officer and cannot be seized by another authority in disregard of that statutory custody.
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