TaxTMI 
TaxTMI 
2025 (2) TMI 1123
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....etel Nuts (Areca nuts) as evaluated at Rs. 38,37,600/- and a truck bearing Registration No. UP 65 CT/0573 as evaluated at Rs. 12,00,000/- were seized on 26.11.2019 without having any 'reason to believe" that the impugned goods have been smuggled from Nepal in violation of the provisions of the Customs Act, 1962 and without having any "reason to believe" that the impugned goods and the vehicle are liable for confiscation under the said Act with all consequential proceedings in pursuance of same; And/or (ii) To issue a writ in the nature of certiorari for quashing the show cause notice bearing C. No. VIII (10) 13/Cus/Seiz/Muz/2019-20/961 dated 19.11.2020 issued by the Assistant/Deputy Commissioner of Customs (Prev), Muzaffarpur Division with a pre-conceived notion and subject matter bias, leaving no scope for fair and impartial hearing for the defense of the Petitioner(s); And/or (iii) To issue an Order/Direction/Writ of appropriate nature declaring the provisional release of goods viz. 19,188 kgs of Betel Nuts as evaluated at Rs. 38,37,600/- and the provisional release of vehicle bearing Registration No. UP 65CT/0573 as evaluated at Rs. 12,00,000/- under Section 11....
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....ods from Nepal which is exported into Nepal from any country other than India. 4. Learned counsel submits that the seized goods were accompanied by invoice, E-way bill issued in accordance with the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the 'GST Act, 2017'). In the E-way bill and the invoice, the name of the buyer and the consignee of goods have been duly shown. The invoice mentions the GST Registration of the consignee as well as the consigner. Copy of the invoice and the E-way bill have been brought on record as Annexure P/2 (Series). It is his submission that the petitioner no. 1 had also paid the requisite fee of Alipurduar Regulated Marketing Committee vide Receipt dated 25.11.2019 (Annexure 'P/3' Series) which clearly established that the seized goods were originated in India and there was nothing to believe that the goods were in any way imported from Nepal to India in contravention of the Act of 1962. 5. It is submitted that the seized vehicle was released provisionally by order of the Joint Commissioner of Customs (Prev), Patna vide order dated 20.02.2020 but the seized goods were released vide order dated 16.06.2020 after a period of si....
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....ned counsel has further relied upon the judgment in the case of Assistant Collector of Customs and Superintendent, Preventive Service Customs, Calcutta and Others Vs. Charan Das Malhotra reported in 1971 (1) SCC 697 a copy of which has been enclosed with the writ petition as Annexure '6'. Attention of this Court has been drawn towards paragraph '15' of the said judgment to submit that in the matter of extension of time under sub-section (2) of Section 110 of the Act of 1962, it was obligatory on the part of the competent authority to give an opportunity of hearing to the petitioners. Submission is that the decision towards extension of time would be in the nature of a quasi-judicial decision and it would be imperative upon the authority to follow the principle of fair play in action by giving an appropriate opportunity to the party who is likely to be affected by the order of extension of time. Submissions on behalf of the Respondents 10. On the other hand, Dr. Krishna Singh, learned ASG for the Union of India submits that the word "reasons to believe" as occurring under Section 110 (1) of the Act of 1962 cannot be put in a straight jacket formula. The proper officer has to f....
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.... (supra), it was held that a person carrying large quantity of gold and found travelling without a ticket may well have raised a reasonable belief in the mind of the Officer that the gold was smuggled. Further relying upon the judgment of Bikaner-Assam Road Lines India Limited and Others Vs. The Union of India and Others reported in 2000 (1) PLJR 136 (Paragraphs '10', '12', '15' and '16'), learned senior counsel submits that in the said case, learned Single Judge of this Court has discussed Section 110 of the Act of 1962. In paragraph '12' of the said judgment, reliance has been placed upon the judgment of the Hon'ble Supreme Court in the case of State of Gujarat vs. Mohanlal reported in AIR 1987 SC 1321 wherein the Hon'ble Apex Court held that while considering the question whether the officer concerned has a reasonable belief or not that the goods are smuggled ones, the court cannot sit as an appellate forum. It is for the authority to be satisfied, prima-facie, about the grounds to justify the belief and once there is a prima-facie material to justify the reasonable belief, the court has to accept the said fact. The Division Bench judgment of this Court in the case of Angou Golm....
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....e consequences of non-issuance of notice would be that the seized good shall be returned. The said provision cannot be interpreted in a manner so as to say that after expiry of the period of six months, no show cause notice could be issued to the petitioner. Consideration 18. We have heard learned counsel for the parties. The main question which has fallen for consideration in the present case is as to whether the seizure order/seizure memo dated 26.11.2019 satisfies the condition precedent i.e. "reason to believe" as envisaged under Section 110 (1) of the Act of 1962. 19. Section 110 (1) of the Act of 1962 reads as under:- "110. Seizure of goods, documents and things.-(1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: ^1[Provided that where it is not practicable to remove, transport, store or take physical possession of the seized goods for any reason, the proper officer may give custody of the seized goods to the owner of the goods or the beneficial owner or any person holding himself out to be the importer, or any other person from whose custody such goods have been seized, on ex....
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....lty on any person shall be made under this Chapter unless the owner of the goods or such person - (a) is given a notice in ^4[writing with the prior approval of the officer of Customs not below the rank of ^5[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: ^6[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.]" 21. The cluster of words "reasons to believe" has been considered by the learned co-ordinate Benches of this Court. In case of Assam Supari Traders (Supra), a learned Co-or....
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....Areca nuts is a foreign origin is not reliable and acceptable, in other words with a naked eye one cannot draw inference that whether it is Indian origin or foreign origin. The learned co-ordinate Bench found that in the said case, the goods were seized at Forbishganj and not seized from any port or any customs area to form a belief that the goods were being imported into India. It was further observed that even otherwise, there was nothing on record to form a belief that the goods in question were imported without payment of import duty. 25. In the case of Krishna Kali Traders (supra), the judgment of the Hon'ble Delhi High Court in the case of Worldline Tradex P. Ltd (supra) has been referred to, in which it has been held that panchnama document cannot be read into seizure memo. The Court was informed that pursuant to the judgment of the Hon'ble Delhi High Court in the said case, the Department of Customs had come out with a Circular No. F.No.591/04/2016-Cus(AS) dated 08.02.2017. The said circular is being reproduced hereunder: "Instruction no. 01/2017-Customs F.No. 591/04/2016-Cus (AS) Government of India Ministry of Finance Depart....
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....itiously decide whether to place the goods under seizure or to release the same to their owner. 5. Further, it has been brought to the notice of the Board that in cases where provisional release of seized goods is allowed under Section 110A of the Act ibid, show cause notices are not being issued within the stipulated time period on the ground that the goods have been released to the owner of the goods. The provisions of the Customs Act, 1962 are clear that irrespective of the fact whether goods remain seized or are provisionally released, once goods are seized, the time period (including extended time period) stipulated under Section 110 (2) of the Act shall remain applicable and has to be strictly adhered to. 6. The Chief Commissioners/Director Generals are requested to circulate the present guidelines to all the formations under their charge. Difficulties, if any, in implementation of the aforesaid guidelines may be brought to the notice of the Board. Hindi version follows. (Rohit Anand) Under Secretary to the Government of India" 26. The learned co-ordinate Bench concluded that panchnama cannot be read into seizure memo. In the said case, ....
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....ny & Anr. Versus Union of India & Ors. reported in 2019 SCC Online Pat 2262 and Sheo Nath Singh Versus CIT reported in (1972) 3 SCC 234 were cited. The learned Division Bench distinguished the case of Sh. Rajendra Sethiya (supra) from that of those cases and held that the dictum in Om Sai Trading Company (supra) was on the peculiar facts coming out in that case, (i) of the ownership of the goods being undisputed, (ii) nothing indicating the goods to be sourced from outside from the country and (iii) the laboratory report being extraneous to the Customs Act, which resulted in quashing of the very seizure notice, without even relegating the petitioner to the adjudicatory procedure. In Sh Rajendra Shetiya (supra), however, the learned Division Bench found that there were simple admitted facts and looking at the valuation carried out by the Department on interception and detection of goods, it has been found that the valuation was done by a government registered valuer and it indicates markings on both the gold bars "Valcambi Suisse (995) CHI Essayeur Foundeur". The gold bars with the recital thereon, was admitted to be that entrusted by the respondent to his employee who was the perso....
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....Section 7, 11, 46 & 47 of Customs Act, 1962; Section 3 (2) of Foreign Trade (Development & Regulation) Act, 1992 & Government of India, Ministry of Finance, Notification No. 9/96-CUS (NT) dated 22.01.1996 issued under Section 110 of the Customs Act, 1962. Case No. & Date 1 13/2019-20 Dated 26.11.2019 Sl.No. Description of goods Make/Origin Quantity of goods Value (In Rs.) 1. Total 245 bags of Arecanut (Betel Nut) (Packed in 245 bags each containing 78.0 kgs.) Third Country Origin 19188Kg Rs. 38,37,600/- 3. Truck No. UP65CT-0573 Engine No. B591803221J63288258 Chasis No. MAT466388C3J26447 Tata Truck 1 (One) No. Rs. 12,00,000/- Total Rs. 50,37,600/- (Rupees Fifty Lacs Thirty Seven Thousands & Six Hundred Only) Signature of witnesses Signature/thumb impression of accused Signature of the seizing officer" 32. We have noticed hereinabove that the Central Board of Excise and Customs (Anti-Smuggling Unit) had issued Instruction No. 01/2017-Customs dated 08th February, 2017 in which it has been clearly stated that whenever goods are being seized, in addition to panchnama, the proper officer must also pass an appropr....
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....2 would make it clear that where no notice in respect of the seized goods under sub-section (1) of Section 110, is given under Clause (a) of Section 124 within six months of the seizure of the goods or within the extended period under the first proviso to sub-section (2) of Section 110, the goods shall be returned to the person from whose possession they were seized. The effect of not giving notice under Clause (a) of Section 124 within six months of the seizure of the goods is stipulated under sub-section (2) of Section 110 and according to this, the consequence would be that the goods shall be returned to the person from whose possession they were seized. 36. In this case, admittedly the goods have been provisionally released on 16.06.2020 i.e. after a period of six months, twice this period has been extended by three months each. It is on this point that learned counsel for the petitioner has relied upon the judgment of the Hon'ble Supreme Court in the case of Charan Das Malhotra (supra). This judgment was rendered in the year 1983, therefore, it refers the then existing provision of Section 110. In the said case, it has been held in paragraph '12' as under:- "12. Th....
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....here can be no doubt at the same time that the inquiry is to be held by the Collector as to be on facts that is materials placed before him. In paragraph '15' of the judgment in the case of Charan Das Malhotra (supra), the Hon'ble Supreme Court has observed as under:- "15. But it may be said that in both those cases there was a civil right involved and the power, therefore, had to be held quasi-judicial. But in the present case also, the right to restoration of the seized goods is a civil right which accrues on the expiry of the initial six months and which is defeated on an extension being granted, even though such extension is possible within a year from the date of the seizure. Since the Collector has on facts to decide on the existence of a sufficient cause, although his decision as to sufficiency of materials before him may be within his exclusive jurisdiction, it is nonetheless difficult to comprehend how he can come to his determination unless, as the Division Bench of the High Court has said, he has before him the pros and cons of the question. An ex-parte determination by the Collector would expose his decision to be one sided and perhaps one based on an incorrect....
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....ed) of 2022 (arising out of SLP(s) No. 11124 of 2021) and other analogous matters, that the Union of India had moved before the Hon'ble Supreme Court for setting aside the order(s) of the Hon'ble Division Bench of this Court in Om Sai Trading Company (supra) and other cases of like nature in which this Court had been pleased to quash the seizure memo(s). While disposing of the SLP(s), September 15, 2022 order of the Hon'ble Supreme Court reads as under:- "1. Leave Granted. 2. Having heard learned counsel for the parties, in view of the facts of the present case, and as the goods have already been released, we are not inclined to interfere with the decision of the High Court quashing the seizure memo. However, we clarify that the quashing of the seizure memo does not mean the appellants cannot investigate, and proceed in accordance with law under the provisions of the Customs Act, 1962. .." 41. It is apparent from a bare reading of the order of the Hon'ble Supreme Court that it was passed after granting leave against the Division Bench judgments of this Court and the effect of the order of the Hon'ble Supreme Court may be clearly seen. The principle of 'merger' ....