Court emphasizes objective basis for "reason to believe" & "liable to confiscation" under Customs Act

The court clarified that the expressions "reason to believe" and "liable to confiscation" under Section 110 of the Customs Act must be based on objective material. It found the seizure of betel nuts and the vehicle illegal as there was no evidence of foreign origin. Various circulars cited were deemed irrelevant, and judicial consistency was emphasized. The court set aside the seizure, directing the release of goods and the vehicle, emphasizing the lack of legal basis for the seizure. The appeal was allowed without costs.

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Issues Involved:
1. Meaning 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 (betel nuts) and the vehicle by the Customs authorities.
3. Applicability of various circulars and memoranda issued by the government in relation to the seizure.
4. Judicial consistency and the relevance of past judgments in similar cases.

Issue-wise Detailed Analysis:

1. Meaning of the expressions "reason to believe" and "liable to confiscation" under Section 110 of the Customs Act, 1962:
The judgment clarifies that the expressions "reason to believe" and "liable to confiscation" are not defined in Section 2 of the Customs Act. The court explains that the belief of the officer seizing the goods must be based on objective material and not on mere suspicion. The officer's belief must be that of an honest and reasonable person based upon reasonable grounds, as established in various precedents like Tata Chemicals Limited v. Commissioner of Customs (Preventive), Jamnagar and Assistant Collector of Customs v. Charan Das Malhotra. The court emphasizes that public orders must be construed objectively with reference to the language used in the order itself.

2. Legality of the seizure of goods and the vehicle by the Customs authorities:
The court found that the goods (betel nuts) were not seized from any notified customs zone or area and that there was no material indicating that the goods had passed through or originated from outside India. The customs authorities' belief that the goods were of foreign origin was based on visual inspection and suspicion, which is insufficient to form a "reason to believe." The court held that the seizure notice was without any basis and quashed it, directing the authorities to release the goods and the vehicle.

3. Applicability of various circulars and memoranda issued by the government in relation to the seizure:
The court analyzed several circulars and memoranda cited by the Revenue, including Circular No.3 of 2011, Circular No.35 of 2017, Circular dated 20th November 2018, Circular No.30 of 2017, and Memorandum dated 4th June 2019. The court found that these circulars were either irrelevant to the issue at hand or did not confer any jurisdiction upon the Customs Officer under the Customs Act. The court emphasized that mere suspicion or general practice in trade cannot be grounds for seizure without concrete evidence.

4. Judicial consistency and the relevance of past judgments in similar cases:
The court criticized the learned Single Judge for distinguishing the judgment in M/s Ayesha Exports v. Union of India, where similar facts led to the release of goods. The court highlighted the importance of maintaining judicial consistency and found that the learned Single Judge had misconstrued the material on record. The court referred to past judgments, including Bawa Gopal Das Bedi & Sons v. Union of India and others, where similar proceedings were quashed in writ jurisdiction.

Conclusion:
The court set aside the judgment of the learned Single Judge and allowed the writ petitioners' prayer to quash the seizure memo and all consequential actions. The court directed the authorities to forthwith release the goods and the vehicle, emphasizing that the seizure was without any legal basis. The appeal was allowed, and no order as to costs was made.

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