2004 (9) TMI 669 - HC - Customs

Summary

Issues Involved:
1. Legality and jurisdiction of the seizure of polythene carry-bags.
2. Validity of the resultant confiscation proceedings.
3. Reasonableness of the belief formed by the customs officials for the seizure.
4. Justiciability of the reasonable belief.
5. Compliance with the Re-cycled Plastic Manufacture & Usage Rules, 1999.

Detailed Analysis:

Issue 1: Legality and Jurisdiction of the Seizure of Polythene Carry-Bags
The petitioner challenged the seizure of polythene carry-bags by customs officials on 11.9.2003, arguing that the seizure was illegal and without jurisdiction. The petitioner, operating a small-scale industrial unit, imported polythene carry-bags from Nepal through proper channels, paying customs duties and following all legal formalities. Despite this, customs officials seized 14 bags weighing 290 kgs during a routine bus check, claiming a violation of GIMF Notification No. 9.Cus/96 under Section 11 of the Customs Act, 1962, read with Section 3 of the FT (D&R) Act, 1992. The petitioner contended that the seizure was arbitrary and that similar previous seizures had been deemed illegal by the court.

Issue 2: Validity of the Resultant Confiscation Proceedings
The court noted that for a confiscation proceeding to be valid, the initial seizure must be legal. The petitioner argued that the seizure was without jurisdiction, and thus, any resultant confiscation proceedings would also be void. The court referenced a previous judgment (M/s. Rara Brothers & Ors. vs. M.L. Dey & Ors.) which held that if jurisdiction is challenged, alternative remedies provided under the Act are not applicable. Consequently, the court deemed the confiscation proceedings arising from the illegal seizure as void and directed the return of the seized goods to the petitioner.

Issue 3: Reasonableness of the Belief Formed by the Customs Officials for the Seizure
The customs officials claimed that the seized goods lacked identification marks and names of importers, leading to a reasonable belief that the goods were illegally imported. The petitioner countered that non-production of the bill of entry might raise suspicion but could not form a reasonable belief that the goods were of third-country origin. The court agreed with the petitioner, stating that there was no material at the time of seizure to reasonably believe that the goods violated the notification, thus making the seizure illegal.

Issue 4: Justiciability of the Reasonable Belief
The customs officials argued that the court could not question the reasonable belief of the officer effecting the seizure. However, the court distinguished between sufficiency of reasons and existence of reasons. It held that the belief must be based on reasonable grounds and not merely on suspicion. The court found that there was no material to justify the belief that the goods were liable to confiscation, thus deeming the seizure unjustifiable.

Issue 5: Compliance with the Re-cycled Plastic Manufacture & Usage Rules, 1999
The customs officials later argued that the seized polythene bags were liable for confiscation under the Environment (Protection) Act, 1986, as their thickness was below the required 20 microns. The court dismissed this argument, noting that the issue of thickness was not considered at the time of seizure. It emphasized that a seizure cannot be justified based on facts discovered post-seizure.

Conclusion:
The court concluded that the seizure of the polythene carry-bags was illegal and without jurisdiction. Consequently, the resultant confiscation proceedings were also void. The court directed the respondent authorities to return the seized consignment to the petitioner without delay. The writ petition was allowed with no order as to costs.