TaxTMI 
TaxTMI 
2011 (5) TMI 375
X X X X Extracts X X X X
X X X X Extracts X X X X
.... were seized under Section 110 of the Act. The goods were physically examined and opinion of Chartered Engineers was taken to the effect that a part of consignment contained moon cut pieces while the remaining was old rusty but not used pipes. The petitioner deposited the amount of duty as per valuation assessed by the said Chartered Engineers and sought provisional release of the goods to avoid demurrage charges. The petitioner also requested for mutilation of the consignment. The goods having not been released, this petition has been filed. 3. Main contention raised in the petition is that when a bill of entry is filed under Section 46 of the Act for clearance of goods, the proper officer is required to make an assessment of the duty under Section 17 and on payment of the said duty, the goods have to be allowed to be cleared. Section 24 provides for mutilation of goods at the request of the importer to render the goods unfit for any other purpose to claim that lesser rate of duty was payable. Section 18 provides for provisional assessment of duty where any further investigation is required to form a final view about the valuation. Section 110 provides for seizure of goods....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enge the value and identity of the seized goods during the course of adjudication or prosecution proceedings, if any. 5. We have heard learned counsel for the parties. 6. Main question for consideration is whether continued detention of goods can be justified. 7. Learned counsel for the petitioner submitted that the officer effecting the seizure was not authorised and simple dispute of classification and valuation did not render the goods liable to confiscation. Alternatively, it was submitted that imposing of condition of furnishing of bank guarantee equal to 25% of the full market value of goods and further condition that the petitioner will not challenge the value of goods during declaration or prosecution were arbitrary conditions. In support of his submissions, reliance has been placed on the following judgments :- (i) Century Metal Recycling Pvt. Limited v. Union of India, 2009 (234) E.L.T. 234 (P & H); (ii) M/s. Bajrangbali Trading Company v. Union of India and Another, CWP No. 3786 of 2011 decided on 17-3-2011 (P & H); (iii) Bhoomi Sudltar Chemical Industries v. Joint Director, DRI,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dan Rice Mills cannot be justification to impose such conditions in each and every case. In those cases, this Court was satisfied that the importers had adopted fraudulent tactics which, prima facie, justified opinion for confiscation of goods. The said judgments cannot apply to every case of detention. Mere allegation of liability to confiscation is not enough. Circumstances and grounds justifying opinion about liability to confiscation is open to judicial scrutiny. 12. Power of detention of goods is a drastic power and exercise of such power has to be hedged by safeguards to check its abuse and limit its exercise only to situation where it is intended by law to be exercised. Existence of power and exercise of power are independent. Mere fact that there is a power to confiscate does not mean that such power could be exercised mechanically or arbitrarily. The authority exercising such power must strictly justify the same. Balance has to be maintained between the need for exercise of such power for the purpose for which the same has been conferred and adverse effects on rights of a citizen. 13. As held in Mapsa Tapes Pvt. Limited, power of search and seizure to check....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rescribe a procedure (ii) the procedure must withstand the test of one or more of the fundamental rights conferred under Article 19 which may be applicable in a given situation; and (iii) it must also be liable to be tested with reference to Article 14. As the test propounded by Article 14 pervades Article 21 as well, the law and procedure authorizing interference with personal liberty and right of privacy must also be right and just and fair and not arbitrary, fanciful or oppressive. If the procedure prescribed does not satisfy the requirement of Article 14 it would be no procedure at all within the meaning of Article 21." 14. Reasonableness being part of fundamental right under Article 14, doctrine of proportionality can be invoked so that unequals are not treated as equals. The exercise of discretion has to be proportionate to the wrong which has led to the action. The doctrine of proportionality has been explained in Om Kumar v. Union of India, AIR 2000 SC 3689, wherein it was observed :- "28. By "proportionality", we mean the question whether, while regulating exercise of fundamental rights, the appropriate or least-restrictive choice of measures has been made ....