TaxTMI 
TaxTMI 
2001 (10) TMI 122
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....d by Mr. D.L.V.R. Murthy. The petitioner is engaged in import and export of the goods and is a merchant exporter. The petitioner's import and export code number is 099803387. The petitioner procures export orders from various countries including Libya. The petitioner negotiated with Aziz and Company, Libya for export of electroplating plant for Cadmium, Zinc, Nickel, Hardchrome and Aluminium anodisation (turn key) and etc. After negotiating with the foreign buyer, the importer had placed order dated 25-2-2001 for purchase of above plant for a CIF value of US $ 50,000. As per the agreement with the foreign buyer, the goods are to be shipped to Libya in the month of June, 2001 and the foreign buyer had agreed to make 100% payment in advance. The petitioner after receiving the purchase order, procured the goods locally and goods were carted to Inland Container Depot (ICD), Sanatnagar, Hyderabad for the purpose of export. The goods are sought to be exported under shipping bill for export of duty-free goods. Therefore, the petitioner filed free shipping bill as required under Section 50 of the Customs Act, 1962 (for short, the Act) in the office of the Deputy Commissioner of Customs, In....
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....wever, no reply was received from the 2nd respondent. This led to the petitioner making one more representation dated 30-6-2001 to the 2nd respondent bringing to his notice the delay in clearing the consignment for export and he sought to know the reasons as to why goods were being held up. The 2nd respondent by his letter C. No. 3500/22-6-2001, dated 30-6-2001 but signed on 2-7-2001 informed the petitioner that the 1st respondent had directed him to detain the consignment of the petitioner, but he refused to disclose the reasons as to why the consignment was detained. There afterwards, the petitioner approached the 1st respondent and gave a representation dated 3-7-2001 seeking reasons for detention of the goods. No response came from the 1st respondent. The petitioner after 3-7-2001 almost everyday went to the offices of the respondents 1 and 2 asking them to give clearance for export of the goods and to give reasons for detaining the consignment and since no reasons were given by respondents 1 and 2, except stating that they are looking into the matter and goods will be cleared shortly. In those circumstances, the petitioner personally met the Commissioner of Customs on 20-7-200....
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.... ICD by the officers of the 1st respondent till 8.30 p.m. in the night and he was forced to sign on some papers. He was not allowed to telephone/contact his office or his superiors. He was also not allowed to read papers and he has no idea as to what do the papers contain. The DRI officers threatened/abused and used unparliamentary/derogatory language against Mr. C.T. Sudhakar and the petitioner's concern. When the matter stood thus, the petitioner received the seizure panchanama dated 20-8-2001 by speed post on 23-8-2001. On receipt of the said panchanama, the petitioner came to know about the seizure of the goods. The petitioner so alleging has filed W.P. No. 18461 of 2001 assailing the validity and legality of the seizure effected vide panchanama, dated 20-8-2001. The prayer in the writ petition reads - "....it is prayed that the Hon'ble Court may be pleased to issue a writ of Mandamus or other appropriate writ or order - (1) declaring the seizure effected vide panchanama, dated 20-8-2001 as illegal, arbitrary, without jurisdiction, void ab initio and violative of petitioner's fundamental rights guaranteed under Arts. 14, 19(1)(g),....
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....itive and Nickel Carbonate are restricted as per entry 3D001 of SCOMET (Nickel or alloys with more than 40% nickel by weight : alloys with more than 25% nickel and 20% chromium by weight) - Appendix 3 of ITC (HS) Classification. (c) Safety Accessories appear to be restricted in terms of entry 3D002 of SCOMET (equipment related to P3, P4 facilities such as protective suits and class III safety cabinets) - Appendix 3 of ITC (HS) Classification. (d) Filtering units with pump and frame also appear to be restricted as per the entry 3D001 of SCOMET (pumps made from nickel or alloy etc) - Appendix 3 of ITC (HS) Classification. (e) Catalysts - export of prepared catalysts to Libya is prohibited under Appendix 37 of the EXIM policy. 5.In the counter affidavit filed in W.P. No. 18461 of 2001, it is stated that the consignment lying at the Inland Container Depot, Hyderabad, belonging to the petitioner was seized under the panchanama, dated 20-8-2001, on a reasonable belief that it contains some items which are prohibited or restricted for export as they are....
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....ndemn the impugned action of the respondents as the one tainted with legal mala fide. Further, the learned Counsel would contend that the officer who has seized the goods should have filed counter affidavit and not others. The learned Counsel would next contend, even assuming that there existed reasonable ground to invoke the power under sub-section (1) of Section 110 of the Act, that satisfaction is confined to only certain items as set out in the counter affidavit filed in W.P. No. 18461 of 2001 and that satisfaction itself would not be a justification to seize and detain the other goods. The learned Counsel would point out that the goods sought to be exported to Libya consist of as many as 114 items and each of those goods is separately packed, valued and shown in the invoice and, therefore, there could not be any justification for the respondents not to clear the consignment for export except certain goods mentioned in the counter affidavit filed in W.P. No. 18461 of 2001. Lastly, the learned counsel would conclude that there is inordinate delay in conducting and concluding the enquiry. 7.On the other hand, Sri C.V. Ramulu, learned Senior Standing Counsel for Central Governm....
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.... goods is effected under sub-section (1) of Section 110 of the Act. It reads - Seizure of"110. goods, documents and things. - (1) If the proper officer has reason to believe that any goods are liable to be confiscation under this Act, he may seize such goods : Provided 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." 9.The condition precedent to invoke the power of seizure under sub-section (1) of Section 110 is that the appropriate officer should have reason to believe that goods sought to be seized are liable to confiscation under the provisions of the Act. The phrase "reason to believe" occurring in sub-section (1) of Section 110 of the Act fell for consideration in large number of cases. In Narayanappa and Others v. Commissioner of Income-tax, Bangalore, AIR 1967 SC 523 the Supreme Court dealing with the power of Income-tax Officer in initiating proceedings under Section 34(1)(a) of the Income-tax, Act, 1922, and interpreting the phrase "reason to believe" occurring in the se....
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....onable evidence to go to a jury, the Judge is concerned with whether he would have come to the same verdict. The onus of establishing unreasonableness, however, rests upon the person challenging the validity of the acts. Administrative decisions in exercise of powers even if conferred in subjective terms are to be made in good faith on relevant consideration. The courts inquire whether a reasonable man could have come to the decision in question without misdirecting himself on the law or the facts in a material respect. The standard of reasonableness to which the administrative body is required to conform may range from the courts' own opinion of what is reasonable to the criterion of what a reasonable body might have decided. The courts will find out whether conditions precedent to the formation of the opinion have a factual basis." 10.In Rohtas Industries v. S.D. Agarwal and Others, AIR 1969 SC 707, an order under Section 237(b)(i) and (ii) of the Companies Act for investigation of the affairs of the company was challenged on the ground that though the opinion of the Government is subjective, the existence of the circumstances is a condition precedent to the formation of th....
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....ting plant for Cadmium, Zinc, Nickel, Hardchrome, and Aluminium anodisation (turn key) containing various equipment and parts including laboratory reagents, salts, catalysts and compositions with a declared FOB value of Rs. 21,90,240/-. It is also stated that some of the items in the consignment are prohibited/restricted in terms of Appendix 3 of ITC (HS) Classification and Appendix 37 of the EXIM policy 1997-2002. Whether all the goods or some of the good sought to be exported are prohibited or restricted for export and whether they are covered under the SCOMET is yet to be finally determined and decided after conclusion of the enquiry and investigation under the Act. At the time of hearing, the learned Senior Standing Counsel for Government of India would tell us that samples from certain seized goods could not be drawn for examination, because they are hazardous and samples could be drawn only by expert technical persons and such experts from Defence Ministry, New Delhi are likely to visit Hyderabad within a week or two to take up that job. According to the DRI, the material, collected by them including the samples would show that some of the goods sought to be exported to Libya....
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.... cannot dissect each and every materials which has gone into the decision making, in the instant case, in forming the belief envisaged under sub-section (1) of Section 110 of the Act, with a surgeon's scissors and with microscopic review of the facts and circumstances in order to placate the apprehended flaw or irregularity in the formation of the belief. That is exactly what the learned Counsel for the petitioner attempted before us. This Court is not the fact finding authority in a matter like this. After hearing the learned Counsel for the parties for a considerable time and perusing the entire records placed before us, we are satisfied that the belief formed by the Deputy Director, DRI in seizing the goods is bona fide and is intended to subserve the statutory objectives for which the power is granted to him under sub-section (1) of Section 110 of the Act. However, the DRI authorities cannot take their own sweet time to conduct and complete the enquiry. It is expected of them to conduct and complete the enquiry with diligence and promptitude. The learned Senior Standing Counsel for Government of India, drawing our attention to sub-section (2) of Section 110 of the Act, would....