2025 (12) TMI 1159 - HC - Customs

Seizure notice over perishable duty-free imported goods challenged as arbitrary; authority ordered hearing and reasoned decision within one week

The dominant issue was whether the impugned seizure notice issued in respect of perishable imported goods (claimed to be freely importable under a ... Goods freely importable under the Duty Free Import Authorization obtained by the petitioner or not - vital wheat gluten imported by the petitioner - HELD THAT:- Since the subject goods are perishable in nature and that too when the petitioner categorically contends that the impugned seizure notice has been issued without any authority under law and their stand is also supported by certain decisions relied upon by the learned counsel for the petitioner, this Court, in the interest of justice had to do a balancing act to protect the interest of the petitioner as well as the respondents, by issuing the certain directions. The first respondent shall give a personal hearing to the petitioner, pursuant to the impugned seizure notice for the hearing on 19.12.2025. On that date, the petitioner shall submit its explanation as to why the impugned seizure notice is arbitrary and illegal and has been issued without any authority under law - The first respondent shall, thereafter, take into consideration the explanation submitted by the petitioner along with the authorities which were placed on record before this Court by the learned counsel for the petitioner and after giving due consideration to the same, shall pass final orders as to whether further action can be taken by the first respondent or not, pursuant to the impugned seizure notice within a period of one week from the date of receipt of the petitioner’s explanation. Petition disposed off. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether the Court should interfere at this stage with the impugned seizure notice on the petitioner's contention that the imported product is covered by the duty free import authorization permitting import of 'wheat flour'. (ii) What interim and procedural directions are necessary to balance (a) the petitioner's claim of duty-free eligibility and perishability of goods, and (b) the customs authority's power to enquire and take action pursuant to the seizure notice. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Interference with the seizure notice at the threshold Interpretation and reasoning: The Court noted the petitioner's categorical case that the product 'vital wheat gluten' should be treated as 'wheat flour' for the purpose of the authorization, and that the seizure notice was asserted to be without authority and with non-application of mind. The Court also recorded that the respondents sought an opportunity to proceed with enquiry and to take a final decision after considering the petitioner's explanation. The Court further considered that no counter had been filed despite multiple listings, and that the goods were stated to be perishable. In these circumstances, instead of giving a final pronouncement on the classification/coverage dispute at this stage, the Court considered it necessary to ensure a prompt and fair determination by the competent authority after hearing the petitioner and considering the materials and authorities relied upon by the petitioner. Conclusion: The Court did not quash the seizure notice on merits at this stage; it directed an expedited adjudicatory process by the competent customs authority with a personal hearing and a time-bound final order. Issue (ii): Appropriate interim protection and time-bound process pending the authority's final decision Interpretation and reasoning: To 'do a balancing act' protecting both sides, the Court fashioned a structured procedure: (a) a fixed date for personal hearing; (b) submission of the petitioner's explanation on the legality/arbitrariness of the seizure notice; (c) a mandate to the authority to consider the explanation along with the authorities placed on record and to decide whether further action can be taken pursuant to the seizure notice; and (d) a short time limit for passing final orders, recognizing the claimed perishability and the need to avoid irreversible prejudice. Pending such final orders, the Court restrained the respondents from seizing the goods, making seizure dependent on the final outcome. Conclusions: (a) The customs authority was directed to give a personal hearing on the specified date and receive the petitioner's explanation; (b) final orders were directed to be passed within one week from receipt of the explanation after considering the materials placed by the petitioner; (c) if the authority accepts the petitioner's contentions in the final order, the goods must be released in accordance with the Customs Act without delay; and (d) until final orders are passed, the respondents were restrained from seizing the goods.