Court quashes seizure memo for lack of evidence, orders release of goods.

The court set aside the judgment of the learned Single Judge, quashed the seizure memo, and directed the Customs Authorities to release the seized goods. The court found the seizure was based on mere suspicion without substantial evidence, failing to meet the statutory requirement of "reason to believe." It criticized the authorities for relying on suspicion rather than concrete evidence and emphasized the importance of adhering to established precedents for judicial consistency. The appeal was allowed with no order as to costs.

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Issues Involved:

1. Interpretation of the expressions "reason to believe" and "liable to confiscation" under Section 110 of the Customs Act, 1962.
2. Legality of the seizure of goods based on suspicion and without substantial evidence.
3. Validity of the actions taken by the Customs Authorities under various circulars and notifications.
4. Applicability of Food Safety and Standards Regulations to the seized goods.
5. Judicial consistency and adherence to precedents.

Detailed Analysis:

1. Interpretation of "Reason to Believe" and "Liable to Confiscation":

The judgment primarily addresses the meaning of "reason to believe" and "liable to confiscation" under Section 110 of the Customs Act, 1962. It is noted that Section 2 of the Act does not define these terms. The court references multiple precedents, including Tata Chemicals Limited vs. Commissioner of Customs, which clarify that "reason to believe" is not a subjective satisfaction but must be based on reasonable grounds and honest belief. The court emphasizes that such belief must be based on objective material and not mere suspicion or extraneous factors.

2. Legality of the Seizure of Goods:

The court scrutinizes the seizure of betel nuts weighing 15,865 Kgs, valued at Rs. 45,14,862/-, by the Customs Inspector. The seizure was based on the suspicion that the goods were of foreign origin and thus liable to confiscation. However, the court finds no substantial evidence indicating that the goods or the vehicle had passed through or originated outside India. The documents provided by the owner showed the consignor and consignee were within India, and the vehicle traveled through Indian states. The court concludes that the seizure was based on mere suspicion without any material evidence, thus failing to meet the statutory requirement of "reason to believe."

3. Validity of Actions Taken by Customs Authorities:

The court examines the actions taken by the Customs Authorities, including the rejection of the petitioners' application for the release of goods based on laboratory reports classifying the goods as unsafe food. The court finds that the authorities relied on suspicion rather than concrete evidence. Additionally, the court highlights that the reasons for forming the belief of illegality were supplemented by affidavits, which is impermissible as per the precedent set in Mohinder Singh Gill vs. The Chief Election Commissioner.

4. Applicability of Food Safety and Standards Regulations:

The judgment addresses the applicability of various circulars and regulations, including those under the Food Safety and Standards Act, 2006. The court finds that these regulations are not relevant to the case at hand, as they pertain to imported goods and not goods transported within India. The court also notes that the seized goods were raw and unfinished, meant for further processing, and thus not subject to the provisions invoked by the Customs Authorities.

5. Judicial Consistency and Adherence to Precedents:

The court criticizes the learned Single Judge for distinguishing the present case from a similar precedent (M/s Ayesha Exports vs. The Union of India) without maintaining judicial consistency. The court emphasizes the importance of adhering to established precedents to ensure consistency in judicial decisions. The court finds that the Single Judge misconstrued the material on record and failed to appreciate the facts and legal principles correctly.

Conclusion:

The court sets aside the judgment of the learned Single Judge, quashes the seizure memo dated 6th February 2019, and all consequential actions taken by the Customs Authorities. The court directs the authorities to release the seized goods forthwith, concluding that the actions taken were without any legal basis and did not adhere to the statutory requirements. The appeal is allowed with no order as to costs.

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