Customs bonded liquor transport is outside state transit permit rules, and excise seizure powers do not apply during customs control.

Liquor transported as bonded cargo from one customs bonded warehouse to another remained under customs control under the Customs Act, 1962, so it was not covered by Rule 3 of the Kerala Liquor Transit Rules, 1975. A transit permit was therefore not required, and proceedings under the Abkari Act were unsustainable. Because the consignment was moving under customs documents and bonded trucking procedure while still in customs custody, State Excise officers had no jurisdiction to seize the goods or vehicle or register a case on that basis. The seizure and consequential action were without jurisdiction and liable to be set aside.

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Issues: (i) Whether liquor transported as bonded cargo from one customs bonded warehouse to another required a permit under the Kerala Liquor Transit Rules, 1975 and was liable to proceedings under the Abkari Act. (ii) Whether the State Excise authorities had jurisdiction to seize the consignment and the vehicle while the goods remained under customs control.

Issue (i): Whether liquor transported as bonded cargo from one customs bonded warehouse to another required a permit under the Kerala Liquor Transit Rules, 1975 and was liable to proceedings under the Abkari Act.

Analysis: The movement in question was governed by the Customs Act, 1962, particularly the provisions relating to warehousing and removal of goods from one warehouse to another under bond. Goods in a bonded warehouse remain under customs control and are not treated as goods finally imported for consumption until customs duty is paid. Rule 3 of the Kerala Liquor Transit Rules, 1975 applies to liquor moved from one place in the State to another place in the State or through the territory of Kerala, and not to liquor still in customs bonded storage and moving under customs bond.

Conclusion: A transit permit under the Kerala Liquor Transit Rules, 1975 was not required, and the Abkari proceedings were unsustainable.

Issue (ii): Whether the State Excise authorities had jurisdiction to seize the consignment and the vehicle while the goods remained under customs control.

Analysis: The consignment was transported with customs documents and under the bonded trucking procedure contemplated by the Customs Act, 1962 and the transshipment regime. Since the goods were still in the custody and control of customs authorities, the State Excise officers had no authority to interfere with the transport, seize the goods, or register a case on that basis.

Conclusion: The seizure and consequential action by the State Excise authorities were without jurisdiction and liable to be quashed.

Final Conclusion: The writ petitions succeeded, the impugned seizure and proceedings were set aside, and the vehicle was directed to be released along with consequential relief regarding the bank guarantee.

Ratio Decidendi: Liquor lawfully transported as warehoused goods under the customs bonded warehouse system remains under customs control until duty is paid, and State transit-permit requirements or excise seizure powers do not apply to such movement.

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