TaxTMI 
TaxTMI 
2025 (8) TMI 1009
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....ina and filed a self-assessed bill of entry bearing No. 5129994 dated 20.08.2021 declaring the goods as 'polyester knitted fabric 100%'. It was stated by the respondent that they had filed the bill of entry classifying the goods under 60063200 on the basis of its understanding and the invoice and placed indent for 100% polyester knitted fabric. The goods were examined on 3rd September 2021 and sent for test where upon it was found that 56456 Sq. meter was 100% synthetic fabric, but were woven fabric not knitted. This distinction came to light on examination and test of fabric. 2.1. The respondent stated that they had classified the goods in the bill of entry on the basis of document received and its indent of polyester knitted fabric; that transaction value and market value of knitted and or woven fabric is similar and distinction comes through weaving pattern. After examination and test of the goods, the respondent clarified that the bill of entry was filed on the basis of self-assessment and classification of goods was done on the basis of their understanding of goods and invoice received by them; market value of both types of fabrics is same and the goods may be re-assess....
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.... already inherent in the Act. These two things are self-contradictory. (ii) The Learned Appellate Authority appears to have failed to appreciate that the seizure memo dated 08.10.2021 under section 110 of Customs Act was properly construed with 'reasons to believe and liable to confiscation by the proper officer. (iii) The Learned Appellate Authority appears to have failed to appreciate that 100% examination of the goods was done in presence of officer of S.1.B. and prima-facie the goods were found mis-declared. The chronology of the events are that - • The BE was filed on 20/08/2021, • 100% examination of the goods was done on 03/09/2021 in presence of importer's representative/CB, • CRCL report received on 06.10.2021, • Seizure Memo was issued on 08.10.2021, • The appellant applied for provisional release of the goods vide letter dated 05.10.2021 which was received in section on 18.10.2021, • Provisional release order under section 110(1) of Customs Act, 1962 was issued on 09.11.2021. (iv) The Learned Appellate Authority appears have failed to appreciate that as per CR....
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.... i. the entire amount of duty/differential duty leviable on the seized goods being provisionally released ii. amount of fine that may be levied in lieu of confiscation under Section 125 of the Customs Act, 1962 at the time of adjudication of the case. While securing the same, the competent authority shall take into account the nature of the seized goods, the duty and charges payable on the said goods, their market price and the estimated margin of profit. iii. amount of penalties that may be levied under the Customs Act, 1962, as applicable, at the time of adjudication of the case." (viii) From the above, it is clear that the Adjudicating Authority has discretion to decide the quantum of Fine & Penalty to be levied under Customs Act. To secure the Customs duty, Fine and Penalty, Bond and Bank Guarantee have to be submitted by the importer as per the Act. Para 5 of the Board's circular 35/2017-Cus., dated 16-8-2017 also states that- "Where provisional release of seized imported goods is allowed, the bond referred to in Para 2.1 shall contain an undertaking that the importer shall pay the duty, fine and/or penalty as may be adjudged by the Adj....
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....of cases where goods are not seized but detained. For ease of reference, the relevant portion of the said Instructions is reproduced below: - "3. Though Section 110 of the Act ibid does not specify passing an order for seizure of goods, it says that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. 4. In view of the above, in all future cases, the following may be adhered to: Whenever goods are being seized, in addition to panchnama, the proper officer must also pass an appropriate order (seizure memo/order/etc.) clearly mentioning the reasons to believe that the goods are liable for confiscation. Where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. In such cases, investigations should be fast-tracked to expeditiously decide whether to place the goods under seizure or to relea....
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....ner's own request and that was the Petitioner who failed to come forward to produce the documents necessary to satisfy the Customs Department that he was entitled to the release of the seized currency in his favour 7. At the outset, it requires to be observed that the legislative intent has made clear in Section 110(2) of the Act which reads as under: S. 110(2) Where any goods are seized under subsection (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized." 8. Whatever may be the justification that the Customs Department wishes to put forth for seizing the goods, there is a definite time-limit within which the Department has to determine if the seized goods are to be confiscated and if so, for giving a SCN under Section 124(a) of the Act. There appears to be no provision for detention of goods instead of their 'seizure Therefore, where a customs officer is satisfied that the person found with the goods is not able to produce the necessary documents to justify being in possession thereof, the Cust....
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....ouse (where the currency is presently kept by the Respondents) not later than two weeks from today. The writ petition is disposed of with the above terms." (underlying supplied) 13. As held in Mohd. Salman Khan (Supra) there is no provision under the Act which permits detention of goods instead of seizure. The Custom Department cannot take shelter under the device of detention in order to avoid the consequences of seizure. In terms of Section 110 (2) of the Act if the Show Cause Notice under Section 124 of the Act is not issued within the statutory period the goods have to be released. By resorting to detention instead of seizure the custom authorities cannot circumvent the mandate of Section 110 (2) of the Act. 14. In the instant case, the Gold Chains were taken possession by the Custom Authorities by issuing a detention receipt which infact amounted to seizure of the said Gold Chains. There is no dispute that the Gold Chains are lying in the custody of the Customs Authorities since their seizure dated 20.12.2022, i.e., over a period of one year. 15. As per the respondents/Custom Authorities, there is no move to seize the goods as of now and as such admi....
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....heme of Section 110 of the Customs Act, 1962. For the purpose of seizure, the seizing authority recording the reasons for seizure issues proper seizure notice/order after complying due formalities like preparation of panchanama, supurdginama etc. On perusal of case records. I find that impugned goods have been mis-interpreted as 'seized goods' by the appellant as well as by the department whereas the goods in question are merely 'detained goods' ... ... ... 12. Therefore, I find that Section 110 of Customs Act, 1962 stipulates seizure of the goods if the goods are construed liable for confiscation. While effecting seizure of the goods, the reasons to believe' are required to be on record. Unless the reasons to believe are recorded the goods cannot be placed under seizure. I find that no reason to believe' has been recorded in the order dated 08.10.2021 supra and effective seizure of the goods are yet to be done in the present case. T 13. I find that the Board had also brought clarity on the above aspects vide 01/2017-Customs dated 08.02.2017 bearing F.No. no. Instruction 591/04/2016-Cus (AS) and instructed the fie....