Customs seizure powers cannot justify sealing factory premises; seized machinery may be conditionally released pending adjudication.

Customs seizure powers under Section 110 of the Customs Act, 1962 apply to movable goods and do not justify sealing an immovable factory premises. On the material before it, the Court treated the restraint on the machine as unjustified at that stage because prior customs records indicated discharge of export obligations, cancellation of bond and bank guarantee, and no pre-seizure material had been shown to doubt compliance. The machine was directed to be released on a bond and a non-transfer condition, while the alleged fraud, seizure validity, and recovery action were left open for independent adjudication.

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Issues: Whether the Customs authorities could seal the factory premises and retain the machine on the facts disclosed, and whether the seized machine was liable to be released on conditions pending adjudication.

Analysis: The petition challenged the sealing of the premises and seizure of the machine under the Customs Act. The Court noted that the earlier seal on the outer door of the room where the machine was installed had been removed, and that the act complained of amounted to sealing an immovable property rather than seizing movable goods. On the material placed, the Court found that the respondents' action was inconsistent with Section 110 of the Customs Act, 1962. The Court also noted that the customs documents of 2014 showed discharge of the export obligation, cancellation of the bond and bank guarantee, and that no prior document or act had been shown to cast doubt on such compliance before the search warrant was issued in 2017. In these circumstances, the insistence on continued restraint over the machine on the basis of the affidavit alone was held unjustified at that stage, though the merits of the alleged fraud and seizure were expressly left open for adjudication.

Conclusion: The machine was directed to be released to the petitioners on execution of a bond and on the condition that it would not be transferred or disposed of for the stipulated period, while the adjudication and recovery proceedings could continue independently.

Final Conclusion: The petition succeeded with conditional release of the seized machine, and the challenge to the impugned restraint was accepted only for the limited purpose of interim relief without affecting the pending customs adjudication.

Ratio Decidendi: Customs powers of seizure under Section 110 of the Customs Act, 1962 extend to movable goods and cannot be used to justify sealing of immovable premises; where the prior record shows apparent compliance and no pre-seizure doubt is demonstrated, continued restraint may be lifted on appropriate conditions pending adjudication.

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