TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 40
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....itioners' silk fabrics, woollen and silk carpets etc. covered under various shipping bills as set out in each of these petitions. 2. It is the petitioners' case that they had filed shipping bills, the details of which are set out in each of these petitions, which were duly examined by the Customs authorities as also on their due verification, export orders were issued. The petitioners had accordingly generated invoices, upon receiving such orders, and dispatched the export goods from the petitioners' factory and transported them to the Container Freight Station (for short 'CFS') where the goods were stuffed after due examination by the Customs authorities. The goods in question were already dispatched at the CFS where necessary examination, stuffing and sealing procedures were carried out. 3. The petitioners have contended that at such point of time on December 7, 2020, the officers of respondent no.2 visited the petitioners' factory premises at Bhadohi which is the branch office of the petitioners as well as the residential premises of the directors/proprietors, and carried out an extensive search. A panchanama of the factory premises/ branch office of the petitioners was also d....
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....siness ethics, the group has come to the adverse notice of multiple intelligence/investigation agencies of the Government of India, for fraudulent activities involving, amongst other things, money laundering, fraudulent availment of drawback by overvaluing value of goods being attempted to be exported, etc. Respondents contend that the petitioners were accordingly subjected to search operations conducted by the Directorate of Enforcement, which investigation, revealed that the funds were transferred from the bank accounts of the petitioners' group companies into the bank accounts of many shell companies and subsequently remitted outside India. It is also the respondents' case that intelligence developed by DRI MZU, indicated that the petitioners had been exporting low quality carpets and fabric by highly overvaluing their price with the intention of fraudulently availing high rates of drawback, thereby defrauding the public exchequer. It was also noticed that about 61 shipments of the group companies were filed at the Jawaharlal Nehru Customs House (JNCH) which covered a wide description of goods, namely silk fabric/ clothing apparels and woollen carpets. These consignments which w....
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....ovisions of Section 110(2) of the Customs Act. On the other hand, the respondents case is of detaining these goods for forensic purposes. 9. In so far as the first question is concerned, admittedly the seizure of the goods had taken place on December 7, 2020, as also the goods of the petitioners except the cash and the samples, are provisionally released. Mr. Jetly has submitted that the investigation is also at a final stage and that show cause notices would now be issued before December 6, 2021, the period of six months having been extended. In these circumstances, we are of the opinion that the respondents ought to be permitted to adopt the further course of action of issuance of show cause notices to the petitioners on or before December 6, 2021. Dr. Kantawala would also have no objection for such course of action to be adopted. Of course as to what has happened in the interregnum shall be subject to the outcome of any adjudication of the proceedings on the show cause notice. 10. The second question whether detaining of the 53 carpets as samples for forensic purposes can continue indefinitely, would be required to be answered considering the provisions of Section 105, Section....
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....f time, constraints of storage space for the goods or any other relevant considerations, by notification in the Official Gazette, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (1), be disposed of by the proper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified. (1B) Where any goods, being goods specified under sub-section (1A), have been seized by a proper officer under sub-section (1), he shall prepare an inventory of such goods containing such details relating to their description, quality, quantity, marks, numbers, country of origin and other particulars as the proper officer may consider relevant to the identity of the goods in any proceeding under this Act and shall make an application to a Magistrate for the purpose of- (a) certifying the correctness of the inventory so prepared; or (b) taking, in the presence of the Magistrate, photographs of such goods, and certifying such photographs as true; or (c) allowing to draw representative samples of such goods, in the presence of the Magistrate and certifying the correctness of any l....
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.... Issue of show cause notice before confiscation of goods, etc. No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person- (a) is given a notice in 1[writing with the prior approval of the officer of customs not below the rank of 2[an Assistant Commissioner of Customs], informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter: PROVIDED that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned be oral: [PROVIDED FURTHER that notwithstanding issue of notice under this section, the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed.] Section 2 Definitions (22) "goods" includes- (a) vessels, aircrafts and vehicles; (b) stores....
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....annot be retained by the officer who has seized the goods. 13. Applying such provisions of the Act to the facts of the present case, in our opinion, the proper officer did not have any authority to retain the 53 carpets contrary to what has been provided for in sub-section (2) of Section 110. This more particularly as these carpets are retained for forensic purpose and also that the seized goods are already permitted to be provisionally released as per the provisions of Section 110A of the Act. Hence, there is no warrant to detain these goods further to the extended period which expires on 6 December 2021. Dr.Kantawala has placed reliance on the decision of the learned Single Judge of the Karnataka High Court in "Stovekraft Pvt. Ltd. Vs. Jt. Director, Dir. Of Revenue Intelligence" 2007(214) EL.T. 179 (Kar.), in so far as it interprets the effect of Section 110 read with Section 124 of the Act. Although the issue in the said case was seizure of documents, files and electronic goods like floppies, pen drive, hard-disk etc, the same were held not to be goods within the definition of Section 2(22) of the Act and were treated as things within the meaning of Section 105 read with Sectio....