Customs recovery attachment cannot reach leased property absent defaulter control or statutory basis beyond the Act.

Attachment under Section 142(1)(c)(ii) of the Customs Act was confined to property belonging to, or under the legal control of, the defaulter. The leased land and building could not be treated as recoverable assets once the lessee had stopped operations and the lease term had expired, because the premises remained the lessor's property. A lease clause requiring the factory not to be vacated until export obligations were discharged, and an unregistered lease deed, could not enlarge the statutory recovery power or create liability against the true owner beyond the Act. On that basis, the attachment was not legally sustainable.

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Issues: Whether the attachment of the leased land and building under Section 142(1)(c)(ii) of the Customs Act, 1962 was sustainable on the footing that the premises continued to be under the control of the defaulting lessee, and whether the Revenue could rely on the lease clause and the unregistered lease deed for that purpose.

Analysis: The provision authorising distraint and sale applies only to movable or immovable property belonging to, or under the control of, the defaulter, and the recovery machinery has to operate in accordance with the prescribed rules. The premises in question belonged to the appellant, while the lessee had stopped operations and the lease period had expired before the attachment proceedings. The clause in the lease deed requiring the factory not to be vacated until export obligation was discharged and consent obtained could not be used by the Revenue to fasten liability on the lessor or to treat the landlord's possession after expiry of the term as unlawful control by the defaulter. The unregistered lease deed could not be relied upon to create an enforceable recovery basis against the appellant beyond what the statute permitted, and in any event the recovery power could not be extended to property merely because the lessee had once occupied it.

Conclusion: The attachment was not legally sustainable and the appeal succeeded.

Final Conclusion: Recovery could not be enforced against the appellant's property on the basis adopted by the Department, and the impugned attachment order was set aside.

Ratio Decidendi: Property can be attached for customs recovery only if it belongs to, or remains under the legal control of, the defaulter, and an unregistered private lease clause cannot be used to enlarge that statutory power against the true owner.

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