2018 (9) TMI 1912 - HC - Customs

Release of seized goods - seized gold ornaments and two I phones - one of main contentions of Learned Advocate for the petitioners is about failure on the part of the respondent-customs authority in not following mandatory provisions of sub-section (2) of Section 110 of the Act, 1962 - release of goods denied on the ground of failure on the part of the Customs authority to issue notice as envisaged under Section 110(2) read with Section 124 and mode of service so provided under Section 153 of the Act. HELD THAT - It is not in dispute that seizure of goods in question was effected on 11-2-2017 in the arrival hall of terminal No. 2 of SVPI Airport, Ahmedabad, in presence of panchas and seizure memo was issued accordingly on the same day. Further, request was made by the petitioners for returning seized ornaments and I-phones on 19-8-2017, reminder dated 1-9-2017 wherein reference was made to seizure memo dated 11-2-2017 and various decision of Delhi High Court and also that of Supreme Court which mandated return of seizure goods in case of failure of giving notice within six months from the date of seizure which was over in the facts of the case on 11-8-2017. It is categorically stated by the petitioners that they had not received any such notice given by the authority and claim about service of notice by fixation by inserting the same in the residential premises in presence of panchas or fixation of such notice on the notice board of the Customs House etc. were denied and, for which, the petitioners had no knowledge. It was further stated that Mr. Deepak Soni, petitioner No. 1 was admitted to the hospital for heart ailment. They had not attended even their business, however, son of petitioner No. 1 was throughout available at the shop as he was looking after the business when the petitioner no. 1 was unwell. It is further borne out from the record, various summons were issued by Customs authorities to appear and cooperate but had no occasion the petitioners remained present before the authority. That apart, no record is available or produced before this Court that show cause notice was given in terms of Section 110(2) read with Section 124 and service thereof as envisaged under Section 153 of the Act, 1962. The action of respondent authorities in not returning the goods seized upon failure to comply with Sections 110(2), 124 and 153 of Customs Act, is illegal - the respondent Nos. 2 and 3 herein are directed to return to the petitioners within 8 weeks from today all gold ornaments/gold items and two apple I-phones seized under panchnama dated 11-2-2017 unconditionally subject to adjudication process to be carried out afresh in accordance with law - petition allowed.

Issues Involved:
1. Legality of the seizure of goods under the Customs Act, 1962.
2. Compliance with the mandatory provisions of Section 110(2), Section 124, and Section 153 of the Customs Act, 1962.
3. Validity of the show cause notice issued by the Customs authorities.
4. Right to return of seized goods due to non-compliance with statutory provisions.

Detailed Analysis:

1. Legality of the Seizure of Goods:
The petitioners challenged the seizure of gold ornaments and two iPhones by the Customs authorities on 11-2-2017 at Ahmedabad International Airport, claiming the action was unjust, unreasonable, and arbitrary. The seizure was conducted under the Customs Act, 1962, specifically invoking Section 110.

2. Compliance with Mandatory Provisions:
The petitioners argued that the Customs authorities failed to comply with the mandatory provisions of Section 110(2) of the Customs Act, which states that if no notice is given under Section 124(a) within six months of the seizure, the goods must be returned to the person from whom they were seized. The petitioners contended that no such notice was served within the stipulated period, thus violating their statutory rights.

3. Validity of the Show Cause Notice:
The Customs authorities claimed that a show cause notice dated 9-8-2017 was issued and dispatched on 10-8-2017, within the six-month period. The notice was allegedly delivered to the petitioners' residence and also affixed on the notice board of the Customs House. However, the petitioners denied receiving any such notice and argued that merely dispatching the notice does not fulfill the requirement of "giving" notice as interpreted by various court decisions.

4. Right to Return of Seized Goods:
The petitioners cited several judicial precedents, including Ambalal Moraraji Soni v. Union of India and Purshottam Jajodia v. DIR. of Revenue Intelligence, to support their claim that the right to return of seized goods is a civil right that accrues if the notice is not received within six months. The court noted that the Customs authorities did not provide sufficient proof of proper service of the notice as required under Section 153 of the Customs Act.

Judgment:
The court concluded that the Customs authorities failed to comply with the mandatory provisions of Sections 110(2), 124, and 153 of the Customs Act, 1962. The court held that the action of the respondent authorities in not returning the seized goods was illegal. Consequently, the court allowed the writ petition and directed the Customs authorities to return all the seized gold ornaments and two iPhones to the petitioners within eight weeks, subject to adjudication proceedings to be carried out afresh in accordance with the law.

Conclusion:
The petition was allowed, and the court ordered the return of the seized goods to the petitioners due to non-compliance with the statutory provisions by the Customs authorities. The request for a stay of the order was rejected.

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