2015 (8) TMI 1223 - HC - Customs

Illegal Seizure of Goods Clearance of goods upon payment of duty Petitioner seeking appropriate direction, commanding respondent to complete final assessment of Customs duty and to grant provisional release of imported goods on basis of bills of entry Petitioner contended that there is no reason for non-clearance of imported goods and action of authorities in not permitting petitioner to have imported goods cleared upon payment of duty is illegal, improper and abuse of power Held that - It is not a case made out in the opposition that the goods imported were exempted from duty provided the conditions attached thereto are fully observed not it is a case that the goods imported is prohibited under the Act or any other law for the time being inforce or a case of removal or attempt to remove from a customs area or a warehouse without the permission of the appropriate authority. Authorities contended that on basis of letter, officer has reason to believe that petitioner is evading duty and because of provisions contained in Section 111(j)(o), proper officer formed opinion that imported goods are liable to confiscation and invoked provisions of Section 110 It is apparent that authorities have wrongly invoked provisions, Court cannot be mute spectator and still relegate parties to authorities to take decision and determine dispute Therefore, court feels that action of authorities in seizing goods under Section 110 is illegal, improper and invalid and cannot be sustained in law Accordingly order of seizure set aside Since authorities have categorically stated that assessment has already been done, said authority shall allow clearance of goods if duty so assessed is paid by petitioner Petition disposed of.

Summary

Issues Involved:
1. Discrepancy in the number of bills of entry.
2. Seizure and confiscation of goods.
3. Legality of the seizure under Section 110 of the Customs Act.
4. Provisional release under Section 110A of the Customs Act.
5. Non-clearance of goods despite assessment.

Detailed Analysis:

Discrepancy in the Number of Bills of Entry:
The petitioner claimed 28 bills of entry, while the Port Authority contended there were only 26, citing duplication as impermissible under the law. The Port Authority's affidavit revealed that 12 out of 26 bills were cleared, 8 were assessed but not cleared due to non-payment or pending queries, and 4 were under departmental queries.

Seizure and Confiscation of Goods:
The goods were seized on May 13, 2014, based on a letter from the petitioner dated April 21, 2014, indicating financial inability to pay assessed duty. The Customs authority inferred evasion of duty from this letter, leading to the seizure under Section 110 of the Customs Act.

Legality of the Seizure under Section 110 of the Customs Act:
The court scrutinized the grounds for seizure under Section 110, which requires a belief that goods are liable for confiscation as per Section 111. The Port Authority cited clauses (j) and (o) of Section 111, which relate to unauthorized removal from customs areas and non-observance of conditions for duty exemption. The court found no evidence in the pleadings to support these grounds, concluding that the seizure was based solely on an alleged attempt to evade duty, which does not meet the criteria under Section 111.

Provisional Release under Section 110A of the Customs Act:
The authorities informed the petitioner about the possibility of provisional release under Section 110A. The court noted that the petitioner should approach the appropriate authority for this relief.

Non-clearance of Goods Despite Assessment:
The petitioner argued that the goods should be cleared upon payment of assessed duty, as no valid reason for non-clearance was provided after queries were answered. The court agreed, noting that the original relief sought had become inappropriate due to subsequent events.

Conclusion:
The court determined that the seizure of goods under Section 110 was illegal and invalid, as the grounds cited did not meet the requirements of Section 111. The court quashed the seizure order and directed the authorities to clear the goods upon payment of assessed duty. For bills of entry with pending queries, the petitioner was given two weeks to respond, after which the authorities would make a final decision. The writ petition was disposed of with no costs.