Customs seizure lapses when no timely notice is issued and no valid extension is granted under the statutory period

Non-compliance with Section 110(2) of the Customs Act, 1962 invalidated the continued retention of seized goods where no show-cause notice was issued within six months of seizure and no valid extension of time was granted by the Collector. The seizure occurred on 24-12-1993, but notice was issued only on 13-9-1994, beyond the statutory period. In the absence of an extension on sufficient cause, the authorities were bound to return the goods to the person from whom they were seized, or, if the goods had already been sold, to pay their assessed value with interest.

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Issues: Whether, in the absence of a notice under Section 124(a) of the Customs Act, 1962 within six months of seizure and without any valid extension of time by the Collector, the Customs Authorities were bound to return the seized goods or compensate their value.

Analysis: The petitioner challenged the seizure on the ground that no notice was issued within the six-month period prescribed by Section 110(2) of the Customs Act, 1962. The seizure took place on 24-12-1993, while the show-cause notice was issued only on 13-9-1994, beyond the statutory period. The record did not show any order by the Collector extending the period by another six months on sufficient cause. In the absence of such extension, the statutory mandate required the goods to be returned to the person from whose possession they were seized.

Conclusion: The seizure could not be sustained for non-compliance with Section 110(2) of the Customs Act, 1962, and the Customs Authorities were directed to return the goods or, if already sold, pay their assessed value with interest.

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