Court Orders Return of Seized Items, Emphasizes Compliance with Customs Act

The court allowed the petition, directing the respondents to return the seized cash and mobile phones to the petitioner within eight weeks. The court emphasized the respondents' non-compliance with statutory provisions and highlighted the need for adherence to clear and mandatory procedures under the Customs Act. The possibility for the respondents to initiate a fresh adjudication process in compliance with the law was also left open by the court, without awarding any costs.

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Issues Involved:
1. Legality of the seizure of cash and mobile phones.
2. Compliance with the statutory period for issuing a show cause notice under Section 124 of the Customs Act, 1962.
3. Return of seized goods due to non-compliance with statutory provisions.
4. Validity of the respondents' actions in retaining the seized goods beyond the statutory period.

Detailed Analysis:

1. Legality of the Seizure of Cash and Mobile Phones:
The petitioner, a sole proprietor of JBM Textiles, Surat, had his office searched by the Directorate of Revenue Intelligence (DRI) on 03.04.2019, resulting in the seizure of Rs. 35,99,000/- in cash and two mobile phones. The petitioner claimed that his signature on the panchnama was obtained forcibly. The respondents alleged that the petitioner was involved in illegal export activities and that the seized amount was related to fraudulent IGST refunds and commission from third-party exports under the EPCG Scheme.

2. Compliance with the Statutory Period for Issuing a Show Cause Notice:
The petitioner argued that no show cause notice was issued within the six-month period prescribed under Section 110(2) of the Customs Act, 1962. The respondents issued a show cause notice on 27.11.2020, which was received by the petitioner on 14.12.2020, well beyond the statutory period. The petitioner contended that the seized goods should have been returned as no notice was issued within the mandated timeframe.

3. Return of Seized Goods Due to Non-Compliance with Statutory Provisions:
The court noted that under Section 110(2) of the Customs Act, if no show cause notice is issued within six months, the seized goods must be returned. The statutory period can be extended by another six months by the Principal Commissioner of Customs, but this extension must be recorded in writing and communicated to the concerned person before the expiry of the initial six months. In this case, no such extension was granted, and the respondents failed to return the seized goods despite the lapse of the statutory period.

4. Validity of the Respondents' Actions in Retaining the Seized Goods Beyond the Statutory Period:
The court found that the respondents did not comply with the statutory mandate under Section 110(2) and Section 124 of the Customs Act. The respondents' failure to issue a show cause notice within the prescribed period or to obtain an extension from the Principal Commissioner rendered their actions illegal. The court emphasized that the statutory provisions are clear and mandatory, and the respondents' non-compliance necessitated judicial intervention.

Judgment:
The court allowed the petition, directing the respondents to return the seized cash and mobile phones to the petitioner within eight weeks. The court also left open the possibility for the respondents to initiate a fresh adjudication process in accordance with the law, if permissible. The court did not award any costs.

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