2015 (6) TMI 111 - HC - Customs

Seizure of goods - Held that - Once it is established that cheques in issue were not seized. Furthermore, return of cheques cannot, to my mind, stifle or impede investigation as is sought to be portrayed by Mr. Nijhawan. In the absence of power the respondent cannot withhold the cheques. - even if, one were to equate resumption with seizure (in so far as documents or things are concerned) the said power has to be exercised, with reasonable despatch. This is so as Section 110(3) of the Customs Act does not lay down any specific time frame, for which, seizure, can continue via-a-vis document or things. - respondent is directed to hand over the 14 cheques to the petitioner. The respondent will, however, before doing so obtain self attested photocopies of the cheques from the petitioner. The statement of the learned counsel for petitioner made before me that the petitioner will not dispute the veracity of the said cheques if they are used as relied upon documents, at any stage of proceedings by the respondent, is also taken note of. The petitioner will be bound by the statement. - Decided in favour of Appellant.

Summary

Issues:
1. Whether the documents and cheques "resumed" by the respondents can be returned to the petitioner?
2. Does the power of seizure under the Customs Act apply to the situation at hand?
3. Can the respondent withhold the cheques if they were not seized?
4. Is there a specific time frame for the continuation of seizure of documents or things under the Customs Act?

Analysis:

Issue 1: The respondent argued that the documents and 14 cheques cannot be returned to the petitioner as they have been "seized" based on Rule 24 of the Central Excise Rules, 2002, and Section 110 of the Customs Act. The petitioner requested the return of the cheques for necessary actions. The court found that there was no seizure in this case, and directed the respondent to hand over the 14 cheques to the petitioner within two weeks.

Issue 2: The court analyzed the difference between the power of seizure under the Customs Act and the undefined power of resumption exercised by the respondents. It was clarified that the power of seizure can only be exercised if the proper officer believes the goods are liable to be confiscated under the Customs Act. Since there was no seizure in this case, the respondent cannot withhold the cheques.

Issue 3: The respondent argued that the return of cheques might impede the investigation, but the court disagreed, stating that the absence of power means the respondent cannot withhold the cheques. The court emphasized that even if resumption is equated with seizure, it must be done with reasonable despatch, and since the cheques were not seized, they should be returned to the petitioner.

Issue 4: The court noted that there is no specific time frame mentioned in Section 110(3) of the Customs Act for the continuation of seizure of documents or things. However, since the petitioner did not press for the release of other documents mentioned in the panchnama, the court did not delve further into this aspect.

In conclusion, the court directed the respondent to return the 14 cheques to the petitioner within two weeks and instructed the petitioner to provide self-attested photocopies of the cheques. The court also noted the petitioner's statement that they would not dispute the cheques if used as relied upon documents in future proceedings. A rejoinder, if any, was to be filed within four weeks, and the case was listed for further proceedings on a specified date.