Court quashes seizure memo, orders release of goods post-clearance. Seizure sans notice breaches natural justice. The court allowed the petition, quashing the seizure memo and directing the release of the seized goods. The court emphasized that once goods are cleared ...
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Court quashes seizure memo, orders release of goods post-clearance. Seizure sans notice breaches natural justice.
The court allowed the petition, quashing the seizure memo and directing the release of the seized goods. The court emphasized that once goods are cleared for home consumption, they lose the status of being imported goods and cannot be confiscated. The court found that the seizure without prior notice violated principles of natural justice, emphasizing that in the absence of banned goods or legal violations, a business transaction should not be disrupted arbitrarily. The decision specified that it would not impact the show cause notice issued to the importer separately.
Issues involved: The issues involved in the judgment are the legality of the seizure of goods under the Customs Act, 1962 and the definition of "imported goods" under Section 2(25) of the Act.
Seizure of Goods: The petitioner filed a writ petition seeking to quash the seizure memo dated 14.02.2023 and to release the goods seized from an importer. The petitioner argued that there was no privity of contract between him and the authorities and that the goods did not fall under the category of banned goods as per the Customs Act, 1962.
Legal Interpretation - Imported Goods: The petitioner contended that once goods are cleared for home consumption, they lose the status of being imported goods and cannot be confiscated. The authorities had seized the goods due to alleged under-valuation by the importer, who had already deposited excess tax. The petitioner argued that even if the importer was liable for tax, it had been duly cleared.
Court's Analysis: The court examined the provisions of the Customs Act, particularly Section 110 and Section 111(m), which deal with the seizure and confiscation of goods. The court noted that the term "imported goods" changes once goods are cleared for home consumption, as defined in Section 2(25) of the Act.
Principles of Natural Justice: The court found that no notice was served on the petitioner before the goods were seized, violating principles of natural justice. It was observed that the authorities were aware of the importer and the subsequent sale to the petitioner for home consumption. The court emphasized that in the absence of banned goods or legal violations, a business transaction should not be disrupted arbitrarily.
Decision and Direction: The court allowed the petition, quashing the seizure memo and directing the release of the seized goods. However, it specified that the findings in the order should not impact the decision on the show cause notice issued to the importer by the department.
Separate Judgment: The judgment was delivered by Hon'ble Mr. Justice Alok Jain.
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