2011 (7) TMI 929 - HC - Customs

Confiscation - It is stated that department has obtained evidence to the effect that the Import Export Code holders in whose name the imports are effected have lent their names and Import Export Code numbers for monetary consideration and every time a consignment is imported, documents are signed by the Import Export Code holders and handed over to the racketeers and their agents - Held that Court will not be justified in interfering with the matter exercising its extra ordinary power under Article 226 of the Constitution of India. On the other hand, what is required is that the adjudication under the Customs Act should be completed on an expeditious basis - In so far as Section 110A relied on by the learned counsel for the petitioner is concerned, a reading of the said section gives me the impression that the Section does not create any vested right on an importer like the petitioner and that too in a case of this nature, to claim release of the goods - the writ petition is disposed of

Summary

Issues:
1. Detention of imported goods by respondents.
2. Interpretation of Section 110A of the Customs Act, 1962.
3. Allegations of misdeclaration and lending of Import Export Code number.
4. Justification for interference under Article 226 of the Constitution of India.
5. Authority to release goods under Section 110A.
6. Disposal of the writ petition and direction for investigation and adjudication.

Detention of Imported Goods:
The petitioner, an importer of consumer items, had a consignment of goods detained by the respondents. The petitioner argued that since allegations in Ext.P2 only concerned two items, the rest of the goods should be released. The writ petition sought a direction for the release of goods covered by Bill of Entry No.3302152 dated 25.04.2011.

Interpretation of Section 110A:
The petitioner's counsel relied on Section 110A of the Customs Act, 1962, stating that goods should be released to the owner even during pending proceedings, subject to certain conditions. However, the respondents contended that an investigation revealed misuse of Import Export Code numbers and misdeclaration of goods, opposing the release of goods.

Allegations of Misdeclaration and Lending of IEC Number:
The respondents presented evidence suggesting that the petitioner had lent their Import Export Code number for financial gain, leading to misdeclaration of goods' value. The petitioner's statement indicated lending the IEC to parties for imports, including specific instances of imports made on behalf of others.

Justification for Non-Interference:
The Court declined to interfere under Article 226 of the Constitution, emphasizing the need for expeditious adjudication under the Customs Act. The Department's case against the petitioner for misuse of IEC and misdeclaration of goods warranted completion of adjudication rather than immediate release of goods.

Authority under Section 110A:
The Court analyzed Section 110A and concluded that it does not grant importers an absolute right to claim goods' release. Instead, it empowers authorities to release goods in appropriate cases. Given the circumstances, the Court found no grounds to direct the release of goods based solely on Section 110A.

Disposal of Writ Petition and Investigation Direction:
The writ petition was dismissed, rejecting the petitioner's request for immediate release of goods. However, the Court directed the respondents to conclude their investigation and adjudication promptly, ensuring completion within six weeks of the judgment's copy production and with notice to the petitioner.

This detailed judgment from the Kerala High Court addressed the detention of imported goods, the application of Section 110A of the Customs Act, allegations of misdeclaration and misuse of Import Export Code numbers, the Court's stance on interference under Article 226, the interpretation of Section 110A regarding goods' release, and the final disposal of the writ petition with a directive for expeditious investigation and adjudication.