2007 (12) TMI 173 - HC - Customs

Import and trading of Digital Audio & music equipments limitation detention of goods goods were seized for not producing proof of ownership & hence SCN was issued petitioner plea is that SCN is time barred held that seizure & detention are not same thing limitation starts from date of seizure, not from date of detention so SCN is not time barred - not a fit case where the goods should be ordered to be returned since the adjudication proceedings are pending before the department

Summary

Issues:
Challenge to show cause notice and direction to release detained goods under Section 110(2) of the Customs Act 1962.

Analysis:
The petitioner, engaged in import and trading of musical equipment, challenged a show cause notice issued by the first respondent and sought the release of detained goods unconditionally. The petitioner claimed that the notice was issued beyond the prescribed period under Section 110(2) of the Customs Act 1962 and should be quashed. The petitioner argued that the goods were meant for exhibition and were wrongly detained by the respondents. The respondents contended that the show cause notice was issued within the permissible time frame and that the seizure of goods was justified due to incomplete documentation provided by the petitioner. The court examined whether the show cause notice was issued within the statutory time limit and whether the detention of goods constituted a seizure as per the Customs Act.

The petitioner relied on a decision from the Calcutta High Court, arguing that once the department took custody of the goods, it should be considered a seizure under the Act, and the show cause notice was issued beyond the stipulated time limit. The respondents maintained that the detention of goods did not amount to a seizure as defined under the Act and that the notice was issued within the statutory period. The court analyzed the provisions of Section 110(2) of the Customs Act and the circumstances of the case to determine the validity of the show cause notice and the detention of goods.

The court found that the show cause notice was issued within the statutory time frame and that the detention of goods did not constitute a seizure as per the Customs Act. It was established that the detention of goods was for the purpose of inquiry, and the department had the right to retain the goods pending adjudication proceedings. The court referred to a Supreme Court decision to distinguish between detention and seizure, emphasizing that seizure involves deprivation of possession, not just custody. Therefore, the show cause notice was deemed valid, and the petitioner's request for the return of goods was denied. The court dismissed the writ petition, stating that it was not appropriate to order the return of goods while adjudication proceedings were ongoing.