2014 (12) TMI 1393 - HC - Customs

Smuggling - Gold - petitioners case is that they are only a bailee under the bailment for doing the work - customs authorities can withhold the gold or not - HELD THAT - The primary authority is to decide whether this gold articles are liable to be released to the petitioners is the authority under the Customs Act. If the gold articles brought by the petitioners are clearly identifiable and it is only for the purpose of job work, authority will not have any difficulty in releasing it. However, that has to be satisfied by the officer attached to the 4th respondent. Petitioners therefore shall make an application to release the good with documents and other relevant materials in terms of Section 110A of the Customs Act, 1962. If petitioners make an application, that application shall be considered within a period of ten days from the receipt of such application. Petition disposed off.

Summary

Issues:
1. Detention of consignment by customs authority in a Special Economic Zone.
2. Allegations of smuggling and lack of cooperation by the petitioners.
3. Decision on the release of detained gold articles for job work.

Analysis:
1. The petitioners, licensees in a Special Economic Zone, had a consignment detained by customs due to a case against the second petitioner. The consignment, sent by a company for job work, was to be returned after completion. The Development Commissioner had approved the entry, indicating it was for job work. The petitioners claimed to be bailees and argued against the withholding of the gold.

2. The customs authority conducted an inspection suspecting the goods were smuggled. An enquiry was initiated, alleging non-cooperation from the petitioners. The authority doubted the functioning of the petitioners' unit, contributing to the suspicion of smuggling activities.

3. The court held that the primary authority to decide the release of the gold articles was under the Customs Act. If the goods were clearly for job work, they should be released. The petitioners were instructed to apply for release under Sec.110A of the Customs Act with relevant documents. The authority was directed to consider the application within ten days of receipt.

In conclusion, the Writ Petition was disposed of with instructions for the petitioners to follow the prescribed procedure for the potential release of the detained gold articles meant for job work.