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1. ISSUES PRESENTED AND CONSIDERED
1.1 Whether, in the absence of a show cause notice under Section 124 of the Customs Act, 1962 within the prescribed period, the seized gold coins are liable to be released under Section 110(2) of the Act.
1.2 Whether an alleged "oral" show cause notice or waiver of notice can satisfy the statutory requirements of Section 124 of the Customs Act, 1962.
2. ISSUE-WISE DETAILED ANALYSIS
Issue 1: Consequence of non-issuance of show cause notice under Section 124 of the Customs Act, 1962
Legal framework (as discussed)
2.1 The Court referred to Section 124(a) of the Customs Act, 1962 requiring a show cause notice before confiscation, and Section 110(2) mandating return of seized goods if such notice is not issued within the prescribed period. The Court also noted the Supreme Court's interpretation in Union of India & Anr. v. Jatin Ahuja that non-issuance of notice under Section 124(a) within the statutory period attracts the mandatory consequence under Section 110(2) that the goods "shall be returned" to the person from whose possession they were seized, absent a valid extension by the competent authority under the first proviso to Section 110(2).
Interpretation and reasoning
2.2 The Court noted that no show cause notice, written or oral, had been issued in respect of the seized gold coins, and that the coins continued to remain with the Customs Authority.
2.3 Relying on an earlier coordinate bench decision in a connected matter and on the Supreme Court's judgment in Union of India & Anr. v. Jatin Ahuja, the Court held that, in the absence of a show cause notice under Section 124(a) within the period contemplated by Section 110(2) and without any recorded extension by the competent authority under the first proviso, the statutory consequence is that the seized goods must be returned.
2.4 The Court accepted the principle, as affirmed by the Supreme Court, that Section 110A (provisional release) is merely an interim mechanism and cannot dilute or negate the mandatory operation of Section 110(2), and that the time limit for issuing notice under Section 124(a) is governed solely by Section 110(2).
Conclusions
2.5 The seized gold coins are liable to be released to the petitioner as no show cause notice under Section 124 has been issued within the statutory framework and no valid extension of time has been shown.
Issue 2: Validity of "oral" show cause notice and waiver of statutory notice under Section 124
Legal framework (as discussed)
2.6 The Court adopted and relied upon the reasoning of the coordinate bench in the connected matter which examined the contention of the Customs Authorities that a show cause notice under Section 124 could be issued orally and/or that the notice requirement could be waived by the passenger.
Interpretation and reasoning
2.7 The Court noted that in the earlier connected matter it had been specifically held that: (a) there was no averment in the counter affidavit that any oral show cause notice had been issued; (b) there is no statutory provision permitting waiver of the notice mandated under Section 124; and (c) in the absence of any such notice, written or oral, the requirements of Section 124(a) are not satisfied.
2.8 Applying the same reasoning, the Court rejected the Department's stand in the present case that an "oral show cause notice" existed, in circumstances where there was neither pleading nor material establishing such oral notice, and where the statute does not contemplate waiver of the prescribed notice.
Conclusions
2.9 Alleged oral show cause notice and any purported waiver of the statutory notice do not satisfy Section 124; in the absence of a valid statutory notice, the seizure cannot be sustained and the goods are to be returned in accordance with Section 110(2).
Issue 3: Conditions and modalities for release of the seized gold coins
Interpretation and reasoning
2.10 Having held that the seized gold coins must be released to the petitioner, the Court directed that the release be subject to payment of applicable customs duty and warehousing charges.
2.11 The Court further directed that warehousing charges be computed on the basis of the charges applicable on the date of detention and facilitated the petitioner's appearance before the Customs Authority (personally, through Power of Attorney Holder, or virtually), designating a nodal officer and fixing a specific date and time for appearance.
Conclusions
2.12 The Department is required to release the seized gold coins to the petitioner upon: (i) payment of applicable customs duty; and (ii) payment of warehousing charges calculated as on the date of detention, with the release process to be coordinated through the designated nodal officer on the specified date and time.
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