Delhi High Court Orders Return of Seized Goods Due to Customs Act Violation

VIPIN CHANANA & Others Versus DIRECTORATE OF REVENUE INTELLIGENCE

VIPIN CHANANA & Others Versus DIRECTORATE OF REVENUE INTELLIGENCE - 2013 (293) E.L.T. 656 (Del.) Issues:
1. Whether the goods seized under the Customs Act should be returned to the petitioners due to the absence of a show cause notice within one year of seizure.
2. Whether the requirements specified in the Hazardous Waste Rules and a circular issued by the Central Board of Excise and Customs are applicable to the release of the seized goods.

Analysis:
1. The petitioners imported photocopier machines that were seized after clearance and stored in their godowns. The main contention was the absence of a show cause notice within one year of seizure, as per section 110(2) of the Customs Act, 1962. The court observed that no show cause notice had been issued within the stipulated time frame, leading to the mandatory return of goods to the petitioners as per the Act. Reference was made to a previous case, Jatin Ahuja v Union of India, where the court emphasized the mandatory nature of the time limit for holding seized goods under section 110(2).

2. The respondent argued that the release of goods was subject to fulfilling requirements under the Hazardous Waste Rules and a circular issued by the Central Board of Excise and Customs. However, the court noted that the circular in question, dated 04.07.2011, pertained to clearance of goods, whereas the seized goods had been cleared much earlier in September/October 2010. Therefore, the circular was deemed inapplicable to the present case. The court directed the unconditional return of the goods to the petitioners, while allowing the respondent to issue show cause notices and proceed lawfully.

In conclusion, the High Court of Delhi ruled in favor of the petitioners, ordering the unconditional return of the seized goods due to the failure to issue a show cause notice within the prescribed time frame under the Customs Act. The court clarified that the additional requirements specified in the Hazardous Waste Rules and the circular from the Central Board of Excise and Customs did not apply retroactively to goods already cleared before the issuance of the circular. The judgment highlighted the mandatory nature of the time limit for holding seized goods and emphasized adherence to legal procedures in customs matters.