2006 (9) TMI 77 - HC - Customs

Seizure of documents Appellant contended that they entitle for return back of seized good under the provision of Section 110 (1) & (2) of the Act Held that the said Act not apply in this and accordingly not entitle for return

Summary

Issues Involved:
1. Return of seized goods and records.
2. Definition and categorization of "goods" under the Customs Act.
3. Applicability of Section 110(1) & (2) vs. Section 110(3) & (4) of the Customs Act.
4. Interpretation of electronic records and their classification under the Customs Act.
5. Time limit for the return of seized documents and things.

Detailed Analysis:

1. Return of Seized Goods and Records:
The petitioner sought a Writ of Mandamus for the return of goods and records seized on 14-7-2005 and 20-1-2006. The petitioner argued that the seized items must be returned after six months if no proceedings under Section 124 of the Customs Act are initiated. The petitioner relied on Section 110(1) & (2) of the Customs Act, which mandates the return of seized goods if no show cause notice is issued within six months.

2. Definition and Categorization of "Goods" under the Customs Act:
The court examined whether the seized items-files, documents, hard discs, pen-drives, and representative samples-fall under the definition of "goods" as per Section 2(22) of the Customs Act. The petitioner contended that these items are movable property and thus should be considered "goods."

3. Applicability of Section 110(1) & (2) vs. Section 110(3) & (4) of the Customs Act:
The court differentiated between the seizure of goods and the seizure of documents or things. Section 110(1) & (2) pertains to the seizure of goods, which must be returned within six months unless an extension is granted. Section 110(3) & (4), however, deals with the seizure of documents or things, which do not have a stipulated return period. The court concluded that the items seized fall under Section 110(3) & (4) as they are documents and electronic records, not goods.

4. Interpretation of Electronic Records and Their Classification under the Customs Act:
The court referred to the Information Technology Act, 2000, defining "electronic record" and "data." It determined that hard discs, pen-drives, and floppies containing data are electronic records/documents. Therefore, they should be treated as documents under Section 110(3) & (4) rather than goods under Section 110(1) & (2).

5. Time Limit for the Return of Seized Documents and Things:
The court noted that while the Customs Act does not specify a time limit for the return of seized documents or things, they should not be retained for an inordinate length of time. The retention should only be for the purpose of investigation or other purposes under the Act.

Conclusion:
The court dismissed the writ petition, concluding that the seized items are documents and things under Section 110(3) & (4) of the Customs Act. Consequently, the six-month return period stipulated under Section 110(2) does not apply. The court emphasized that the authorities cannot retain the seized items for an unreasonable period and must use them solely for investigation purposes.