Customs seizure and redemption rules: sealing is not seizure, and redemption may be refused for regulated imports in breach of law.

Detention, examination and sealing of imported goods in customs custody do not by themselves amount to seizure for Section 110(2) of the Customs Act; seizure arises only when officers form reason to believe the goods are liable to confiscation and actually seize them, so the six-month period runs from that date. The text also states that redemption under Section 125 is not obligatory where concealed imported goods, such as cosmetics and toiletries, are brought in breach of mandatory regulatory conditions, including required registration under the Drugs and Cosmetics Rules, 1945, and the adjudicating authority may refuse redemption in such cases.

---

---

Issues: (i) Whether the examination, sealing and detention of imported goods before 03.12.2013 amounted to seizure for the purpose of Section 110(2) of the Customs Act, 1962, so as to entitle the importer to unconditional release for want of notice within six months. (ii) Whether the adjudicating authority was bound to grant an option of redemption fine in lieu of confiscation in respect of the imported cosmetics and toiletries.

Issue (i): Whether the examination, sealing and detention of imported goods before 03.12.2013 amounted to seizure for the purpose of Section 110(2) of the Customs Act, 1962, so as to entitle the importer to unconditional release for want of notice within six months.

Analysis: The imported goods remained in customs custody under Sections 45 and 47 until clearance for home consumption, and mere payment of duty did not amount to release. The proceedings on 11.11.2013 and 12.11.2013 were held to be only examination and inventorisation to verify the contents declared in the bill of entry. The sealing of the container was treated as a protective step to preserve custody and prevent pilferage, not as seizure. Actual seizure was recorded only on 03.12.2013, when the officers formed reason to believe that undeclared goods had been concealed and were liable to confiscation. On that basis, the period under Section 110(2) was held to run from 03.12.2013, and the extension granted by the Commissioner was within time.

Conclusion: The earlier detention and sealing did not amount to seizure, and the importer was not entitled to unconditional release under Section 110(2).

Issue (ii): Whether the adjudicating authority was bound to grant an option of redemption fine in lieu of confiscation in respect of the imported cosmetics and toiletries.

Analysis: The order of confiscation proceeded on findings that undeclared cosmetics had been concealed behind declared goods and that the import of cosmetics was contrary to the applicable regulatory regime requiring registration under the Drugs and Cosmetics Rules, 1945. The Court held that goods imported in breach of such mandatory restrictions fell within the ambit of prohibited or regulated goods for the purpose of Section 125, and that the discretion to grant redemption fine was not one that had to be exercised in favour of the importer where the competent import-regulating authority had not granted the required permission or registration. The adjudicating authority was therefore justified in declining redemption in respect of the clandestinely imported goods.

Conclusion: The refusal to grant redemption fine for the concealed cosmetics and toiletries was upheld.

Final Conclusion: The challenge to both the extension order and the confiscation order failed, and the Customs authorities were held entitled to proceed on the footing that seizure occurred only on 03.12.2013 and that the confiscation of the undeclared goods could be sustained without offering redemption for those goods.

Ratio Decidendi: In customs custody, detention or sealing of goods does not by itself amount to seizure for Section 110(2); seizure occurs only when the officer, upon forming reason to believe that goods are liable to confiscation, effects seizure, and redemption under Section 125 is not obligatory where the import violates mandatory regulatory conditions not within the adjudicating authority's power to waive.

---