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2012 (12) TMI 675 - HC - CustomsRe-seizure orders - whether after expiry of the period of one year the seizure of the goods or articles would be deemed to lapse under Section 110? - Held that - As decided in JAYANT HANSRAJ SHAH Versus UOI 2008 (2) TMI 293 - HIGH COURT BOMBAY effect of expiry of one year period (six months if no extension is granted) after the seizure of goods etc under Section 110 when there has been no show cause notice under sub-clause (2) is amply clear. Upon expiry of the one year period (or six months as the case may be) the goods are returnable to the person from whose possession they were seized. There is nothing in Section 110-A to detract from this consequence. The public interest in injecting a sense of efficiency by mandating an outer limit to seizure orders whenever the customs authorities contemplate an adjudication proceeding is self-evident. In the case of goods with limited shelf life or fast moving electronic articles or even garments which reflect the latest trends even such limited seizure may result virtually in a confiscation because they may be rendered worthless upon release. In the light of the above discussion the Petition has to succeed. It is declared that the effect of non-issuance of show cause notice under Section 124 in this case has resulted in the operation of Section 110(2) and the statutory dissolution of the seizure order made in the case of the Petitioner s car. The said vehicle released provisionally and subject to conditions under Section 110-A shall be deemed to have been unconditionally released. If the Maserati car has not been released the same shall be released within two weeks and the superdarinama is hereby quashed. The writ petition is allowed in the above terms.
Issues Involved:
1. Legality of the re-seizure of the Maserati car by the Directorate of Revenue Intelligence (DRI). 2. Impact of the non-issuance of a show cause notice within the statutory period under Section 110(2) of the Customs Act, 1962. 3. Effect of provisional release under Section 110-A on the mandatory time limit for issuing a show cause notice. Detailed Analysis: 1. Legality of the Re-seizure of the Maserati Car by the Directorate of Revenue Intelligence (DRI): The petitioner challenged the Panchanama dated 09.05.2012, through which the DRI re-seized the Maserati car and revoked the supurdarinama dated 26.04.2011. The petitioner argued that the re-seizure was unlawful as it was conducted after the expiry of the one-year period from the initial seizure, which entitled the petitioner to an unconditional release of the car. 2. Impact of the Non-issuance of a Show Cause Notice within the Statutory Period under Section 110(2) of the Customs Act, 1962: The petitioner contended that the one-year period for issuing a show cause notice expired on 25.04.2012, and since no notice was issued within this period, the car should be released unconditionally. The petitioner relied on the Supreme Court judgments in J.K. Bardolia Mills v Dy. Collector and Ors and Harbans Lal v. Collector of Central Excise & Customs, which held that the effect of non-compliance with Section 110(2) is that the seized goods must be returned to the person from whose possession they were seized. The court noted that Section 110(2) mandates the return of seized goods if no show cause notice is issued within six months (or an extended period) from the date of seizure. The Supreme Court in Asstt. Collector of Customs and Ors. vs. Charan Das Malhotra clarified that the period laid down in Section 110(2) affects only the seizure of the goods and not the validity of the notice. 3. Effect of Provisional Release under Section 110-A on the Mandatory Time Limit for Issuing a Show Cause Notice: The respondent argued that the car was released provisionally under Section 110-A of the Act before the expiry of the one-year period, and thus, the seizure did not lapse. The court examined the judgment of the Bombay High Court in Jayant Hansraj Shah v Union of India, which stated that if goods are provisionally released under Section 110-A, Section 110(2) would not be operative. However, the court distinguished the present case from the Bombay High Court judgment, emphasizing that Section 110-A is an interim provision and does not override the mandatory time limit prescribed in Section 110(2). The court held that the statutory consequence of not issuing a show cause notice within the prescribed period is the unconditional release of the seized goods. Conclusion: The court concluded that the effect of non-issuance of a show cause notice under Section 124 within the statutory period resulted in the statutory dissolution of the seizure order. Consequently, the Maserati car, which was provisionally released under Section 110-A, was deemed to have been unconditionally released. The court quashed the supurdarinama and directed the release of the car within two weeks. The writ petition was allowed, and no costs were awarded.
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