TaxTMI 
TaxTMI 
2008 (9) TMI 91
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....ustoms Act, 1962. The petitioner also paid about Rs. 1 crore as custom duty. In March/June 2008, the petitioner again imported EVA and DCP and filed Bill of entry. The Assessing Officer permitted clearance of goods after revising the value on the basis of contemporaneous import. 3. On 10-7-2008, representative of Directorate of Revenue Intelligence this conducted search at the business premises of the petitioner. On account of ill-health and fearing arrest, the Managing Director deposited Rs. 2 crores. On 11-7-2008, representative respondent No. 2 seized material lying at the godown of the petitioner, which was 2833 MT. The petitioner requested for release of goods on 15-7-2008 reiterating the value declared. On 15-7-2008, again representative of respondent No.2 seized the material which was received after the first seizure. The Commissioner of Customs, Bombay vide letter dated 16-7-2008 restrained the petitioner from removing the goods covered by bills of entry dated 30-6-2008. Out of the said goods, part of the goods had already reached Delhi and Panipat, while the remaining 192 MT material was still in the process of loading at dry port. The petitioner was asked to submit det....
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.... Supreme Court in Canon Steels P. Limited v. Commissioner of Customs (Export Promotion), 2007 (218) E.L.T. 161 and Kusum Ingots & Alloys Limited v. Union of India, 2004 (168) E.L.T. 3. It has been further stated that the petitioner had alternative remedy in the form of opportunity to reply the show cause notice which will be issued after investigation and thus, writ jurisdiction could not be resorted to during pendency of investigation. Reliance has been placed on judgment of the Hon'ble Supreme Court on Assistant Collector of Central Excise v. Jainson Hosiery Industries, 1979 (4) E.L.T. (J511). 8. As regards deposit of Rs. 2 crores, it is stated the said amount was paid voluntarily towards partial payment of duty evaded. Reasons for seizure are clear from Panchnamas that the goods are liable to confiscation. Reason to believe only required holding of a belief on the basis of material and the same was not subject to judicial review. Clearance of goods under section 47 did not bar action under Section 110. The petition involves disputed question. 9. In the additional affidavit filed by the Deputy Director, it has been further stated that writ petition could not be entertained ....
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....seizure value of goods were harsh conditions. The department was only concerned with the duty and even according to their provisional estimate, the differential duty worked out to Rs. 1,34,99,633/- which was much lesser than the amount already deposited by the petitioner with them. 13. It was submitted that neither any show cause notice had been issued nor any other justification shown for confiscation of goods and duty assessed having been paid and at best, a case for safe securing duty was made out. 14. Learned counsel for the respondents submitted that seizure value of goods was Rs. 40 crores and even on the ground of undervaluation, the goods could be confiscated in which case, the same will vest in the government and, thus, the department was entitled to safeguard itself against the value of goods. If the goods were released without safeguarding the department agamst value of goods, the petitioner would be at liberty to sell the goods and use the proceeds and the department will suffer loss. Conditions were, thus, justified. 15. Question is whether stand of the department in imposing conditions with a view to safeguard itself against the value of goods as against valu....
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....seizure under section 110 of the Customs Act can be exercised only on satisfaction that the goods were liable to confiscation. Under section 111(m) of the Act, goods may be liable to confiscation on the ground of undervaluation also. Mere existence of such an extreme power does not render exercise of such power immune from challenge on the ground that the same was arbitrary. This Court may not at the interim stage interfere with the investigation or with the bona fide belief that it was necessary to effect seizure but again existence of such extreme power could not be a handle in the hands of officers of the Custom department to act arbitrarily without any rational basis. Thus, validity or otherwise of conditions for release will have to be decided on individual fact situation. Claim for securing against value of goods can be justified only if prima facie case for confiscation exists, which has not been shown to exist in the present case. Mere existence of power of confiscation is not enough to justify harsh condition unless case for confiscation is shown. Exercise of power to impose harsh condition without valid justification will be arbitrary exercise of power hit by Articles 14,....
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.... matter nor should take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves on a point of law. Only such a decision will be lawful. The courts have power to see that the Executive acts lawfully. It is no answer to the exercise of that power to say that the Executive acted bone fide nor that they have bestowed painstaking consideration…………" ( Hochtief Gammon v. State of Orissa & Ors. - AIR 1975 SC 2226) "........That Court has power, by the prerogative writ of mandamus, to amend all errors which tend to the oppression of the subject or other misgovernment, and ought to be used when the law has provided no specific remedy, and justice and good government require that there ought to be one for the execution of the common law or the provisions of a statute..." (The Comptroller and Auditor General of India, Gian Prakash, New Delhi & anr. v. K.S. Jagannathan & anr, - AIR 1987 SC 537). "………The Constitution enshrines and guarantees the rule of law and Art. 226 is designed to ensure that each and every authority in the State, including the Government acts bona fide and within the limits of its power and we consider that when a....
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....ikes such an action down. Every action of the executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, it should meet the test of Art. 14....." (Kumari Shrilekha Vidyarthi etc. v. State of U.P. & ors.AIR 1991 SC 537) "........In requiring statutory powers to be exercised reasonably, in good faith, and on correct grounds, the Courts are still working within the bounds of the familiar principle of ultra vires. The Court assumes that Parliament cannot have intended to authorize unreasonable action which is therefore ultra vires and void......" (Express Newspapers Pvt. Ltd. V. UOI, AIR 1986 SC 872). 21. In the present case, we do not consider it necessary to examine the bona fides of the respondents in exercising power of effecting seizure without recording any reasonable belief of liability of goods to confiscation before effecting seizure in view of limited prayer pressed. We do find that harsh conditions sought to be imposed can hardly stand scrutiny on the anvil of concept of reasonable procedure and reasonableness and fairness. It is well settled that even in case of existence of power, exercise ....