2013 (2) TMI 200 - HC - Customs

Return of goods seized - no show cause notice issued to the petitioners within one year of the date of seizures - department relied on circular No. 27/2011 issued by the CBEC dated 04.07.2011 which clarifies that a permission from the Ministry of Environment and Forest would be required - Held that - Section 110(2) specifically mandates that when any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months or within the further extended period of six months (totaling one year) of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. See Jatin Ahuja v Union of India and Ors 2012 (12) TMI 675 - DELHI HIGH COURT The goods in question had been seized in September/October 2010, whereas the circular was issued much later on 04.07.2012. Therefore, the said circular would not apply to the facts of the present case - in favour of assessee.

Summary

Issues:
1. Whether the goods seized under the Customs Act should be returned to the petitioners due to the absence of a show cause notice within one year of seizure.
2. Whether the requirements specified in the Hazardous Waste Rules and a circular issued by the Central Board of Excise and Customs are applicable to the release of the seized goods.

Analysis:
1. The petitioners imported photocopier machines that were seized after clearance and stored in their godowns. The main contention was the absence of a show cause notice within one year of seizure, as per section 110(2) of the Customs Act, 1962. The court observed that no show cause notice had been issued within the stipulated time frame, leading to the mandatory return of goods to the petitioners as per the Act. Reference was made to a previous case, Jatin Ahuja v Union of India, where the court emphasized the mandatory nature of the time limit for holding seized goods under section 110(2).

2. The respondent argued that the release of goods was subject to fulfilling requirements under the Hazardous Waste Rules and a circular issued by the Central Board of Excise and Customs. However, the court noted that the circular in question, dated 04.07.2011, pertained to clearance of goods, whereas the seized goods had been cleared much earlier in September/October 2010. Therefore, the circular was deemed inapplicable to the present case. The court directed the unconditional return of the goods to the petitioners, while allowing the respondent to issue show cause notices and proceed lawfully.

In conclusion, the High Court of Delhi ruled in favor of the petitioners, ordering the unconditional return of the seized goods due to the failure to issue a show cause notice within the prescribed time frame under the Customs Act. The court clarified that the additional requirements specified in the Hazardous Waste Rules and the circular from the Central Board of Excise and Customs did not apply retroactively to goods already cleared before the issuance of the circular. The judgment highlighted the mandatory nature of the time limit for holding seized goods and emphasized adherence to legal procedures in customs matters.