2011 (11) TMI 765 - HC - Customs

Summary

Issues Involved:
1. Legality of the seizure of betel nuts by Customs Department.
2. Compliance with procedural requirements during the seizure.
3. Validity of the grounds for seizure under the Customs Act.

Summary:

1. Legality of the Seizure of Betel Nuts by Customs Department:
The petitioners, a transporter and a trader, filed a writ petition to quash the seizure of 15,375 Kgs. of betel nuts by the Customs Department. The seizure was based on the presumption that the consignment was stolen and of third country origin. The petitioners argued that the betel nuts were purchased through proper trade invoices and booked for delivery to New Delhi, complying with all formalities and requisite fees.

2. Compliance with Procedural Requirements During the Seizure:
The petitioners contended that the truck was initially detained by local police without any detention memo or seizure list. After verification, the police contacted Customs officials, who directed the truck to be taken to Muzaffarpur Customs Office. The Customs Department seized the consignment on 29.06.2011, but the petitioners received the seizure memo only on 06.07.2011, making it impossible for them to appear before the authorities on the same day.

3. Validity of the Grounds for Seizure Under the Customs Act:
The petitioners argued that the seizure was baseless as there was no material to suggest that the betel nuts were of foreign origin. They cited the Foreign Trade Policy and relevant case laws, asserting that the goods were not liable to be confiscated u/s 111 of the Customs Act. The respondents countered that the driver's statement provided "reasons to believe" for the seizure, but the court found this to be mere suspicion, not a reasonable belief. The court emphasized that the burden of proof lay on the Customs authority to show that the betel nuts were of foreign origin, which they failed to do.

Conclusion:
The court held that the seizure was not in accordance with law, as the Customs authorities did not have a reasonable belief at the time of seizure that the goods were smuggled. The court quashed the order of detention and seizure, directing the immediate release of the truck and betel nuts.