2019 (8) TMI 789 - HC - Customs

Court denies unconditional release of goods detained without Show Cause Notice under Customs Act, 1962.

The court dismissed the plea for unconditional release of goods detained and seized without a Show Cause Notice under the Customs Act, 1962. It held that ... Unconditional Release of imported goods detained illegally - time limitation - it is alleged that SCN not issued within 6 months of detention of goods - scope of the second proviso to Section 110 (2) of Customs Act - HELD THAT:- It appears to the Court that the legislative intent was to ensure that the person whose goods are seized is not left in a state of uncertainty, with neither the goods being released nor an SCN being issued despite six months having elapsed since the date of seizure. The second proviso states that where any provisional release of the seized goods is ordered under Section 110A of the Act, then the specified period of six months, as indicated in Section 110 (2) of the Act, would not apply. This is only to make sure that at least there is a provisional release of the seized goods as quickly as possible. In the present case, a valuable right might have accrued to the Petitioner for unconditional release of the goods if no provisional release order had been passed before the expiry of six months from the date of seizure of the goods. In such event, the Petitioner could have argued that the valuable right accrued to the Petitioner cannot be taken away by passing a provisional release order beyond the period of six months from the seizure of the goods - the second proviso did not take away what was already available to the Petitioner. In that sense, the second proviso in the present case cannot be said to have applied retrospectively in order to deprive the Petitioner of a valuable right that had accrued to the Petitioner. The court is unable to accept the plea of the Petitioner for unconditional release of the goods in question - Petition dismissed. Issues:1. Unconditional release of goods detained and seized without a Show Cause Notice under the Customs Act, 1962.2. Provisional release of goods imported against a specific bill of entry in compliance with a tribunal order.Issue 1: Unconditional release of goods detained and seized without a Show Cause Notice under the Customs Act, 1962:- The petitioner sought a writ for the unconditional release of goods detained and seized without a Show Cause Notice under Section 124 of the Customs Act, 1962. The petitioner argued that since no Show Cause Notice was issued within six months of the seizure of goods, they were entitled to unconditional release. The petitioner had complied with conditions set by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) for provisional release.- The respondent pointed out an amendment to Section 110(2) of the Act, inserted by the Finance Act, 2018, which allowed for the extension of the period for issuing a Show Cause Notice. The respondent contended that the petitioner could not insist on unconditional release based on this amendment.- The court analyzed the amendments to Section 110 of the Act and noted that the second proviso allowed for extending the period for issuing a Show Cause Notice. The court considered the legislative intent behind the amendment to ensure timely action on seized goods.- The court found that the second proviso did not take away any rights accrued to the petitioner for unconditional release as the provisional release order was passed within the specified period. Therefore, the court dismissed the plea for unconditional release, stating that other contentions could be raised during adjudication proceedings.Issue 2: Provisional release of goods imported against a specific bill of entry in compliance with a tribunal order:- The petitioner also sought provisional release of goods imported against a specific bill of entry in compliance with a CESTAT order. The goods were provisionally released subject to certain terms, which were later modified by the CESTAT.- The respondent argued that the provisional release order was passed within the specified period, as per the second proviso of Section 110(2) of the Act, and therefore, the petitioner could not demand unconditional release.- The petitioner contended that the second proviso should not have retrospective effect on the seizure in question, and the goods should be unconditionally released as no Show Cause Notice was issued within the required timeframe.- The court analyzed the provisions of the Act, the amendments made, and the timeline of events regarding the provisional release of goods. The court concluded that the second proviso did not deprive the petitioner of any accrued rights for unconditional release.- Consequently, the court dismissed the petition, stating that the petitioner could raise other legal contentions during the ongoing adjudication proceedings following the issuance of the Show Cause Notice.This detailed summary provides a comprehensive analysis of the judgment, addressing all relevant issues and legal arguments presented in the case.