2013 (6) TMI 123 - HC - Customs

Private bonded warehouse - discrepancy in stock register - customs authorities and the Police Department of the State opposing each other in a petition instituted by the customs authorities. - held that - the enquiry by the customs authorities on the premise of alleged breach of the Customs Act, the Rules made thereunder and the terms of the licence of the bonded warehouse is still incomplete and in the meantime the police authorities have put their own seals on the warehouse. Without expressing any opinion on the both FIRs we are of the opinion that the customs authorities should be allowed to complete the enquiry for which we have already granted six weeks time in a connected petition. Once such enquiry is over, it would be open for the police authorities, of course, subject to all the rights and contentions of respondent No. 5 as also the customs authorities, to proceed further in accordance with law in connection with such FIRs. Police authorities shall remove their seals on the bonded warehouse to enable customs authorities to complete their enquiry. It would, however, be the duty of the customs authorities to ensure that the goods lying in the warehouse are not permitted to be taken out. They shall also ensure that the necessary records are taken in their custody and are made available for future reference. Once the enquiry is over, the result thereof may also be communicated to the police authorities by the customs authorities.

Summary

Issues:
1. Conflict between customs authorities and police department regarding jurisdiction over a private bonded warehouse.
2. Allegations of irregularities in the warehouse stock and hindrance in police investigation.
3. Jurisdictional dispute between customs authorities and police authorities.

Analysis:
The judgment addresses a peculiar situation where the customs authorities and the police department are in conflict over the jurisdiction and investigation of a private bonded warehouse. The customs authorities conducted a surprise check on the warehouse and found discrepancies in the registered and physical stock, primarily bottles of liquor. Consequently, they sealed the warehouse and suspended its license. Simultaneously, the police department initiated its investigation suspecting the excess stock was intended for breaching the prohibition law. Two FIRs were filed, one against the warehouse proprietor and the other against customs officers for allegedly obstructing police duties.

The court refrained from delving into the FIR allegations but focused on the conflicting stances of the customs and police authorities. The customs authorities argued that any irregularities in the warehouse fall under the Customs Act's purview, while the police department viewed it as a breach of prohibition laws within the state. Acknowledging the incomplete customs inquiry and the police seals on the warehouse, the court granted the customs authorities six weeks to conclude their investigation. It directed the police to remove their seals, ensuring goods remain untouched, records are secured, and investigation results are shared with the police afterward.

Upon completion of the customs inquiry, the police were permitted to proceed with their investigation, subject to the rights of all involved parties. The judgment clarified that it did not opine on the FIR allegations or police jurisdiction, leaving room for aggrieved parties to challenge them through appropriate legal channels. The court disposed of the petition with these directives, aiming to resolve the jurisdictional dispute and facilitate a lawful investigation process.