2016 (4) TMI 97 - HC - Customs

Seeking release of Nepalese currency - Nepalese currency of the value of ₹ 5 lakhs equal to Indian ₹ 3.1 lakhs were seized and detention receipt given on 17th June, 2014 - Application for release filed on 07.07.2014 but till date not received any reply - Respondent contended that appellant not present himself for examination or has not submitted any document to prove the legitimate possession of the currency and department did not convert the detention into seizure as there is a difference in detention and seizure - Held that - there appears to be no legal justification for the Customs Department not seizing the Nepalese currency recovered from the Petitioner in the first place and secondly, in not giving a SCN within six months of such seizure. In the absence of any provision in the Act that permits detention of such goods, the Court has to proceed on the basis that what was effected on 17th June 2014 was a seizure of Nepalese currency from the Petitioner. That the seized currency was in the possession of the Petitioner and seized from him is also not in dispute. If that is the position, then under Section 110(2) of the Act a SCN had to be given under Section 124(a) of the Act within six months of 17th June 2014. With no such SCN having been given, the inevitable consequence, therefore, is that as mandated by Section 110(2) of the Act, the seized goods shall be returned to the person from whose possession it was seized . Consequently, the Respondents are directed to release the Nepalese currency for which a detention receipt was issued on 17th June 2014, to the Petitioner upon him presenting himself. - Petition disposed of

Issues:
Release of seized Nepalese currency, application for release, distinction between detention and seizure, failure to issue Show Cause Notice (SCN), legality of detention, time limit for determining confiscation, Customs Act provisions, necessity of SCN within six months, legal justification for detention, release of seized goods.

Detailed Analysis:

1. Release of Seized Nepalese Currency:
The petitioner sought the release of Nepalese currency seized from him while traveling to Dubai. The currency, valued at Indian ?3.1 lakhs, was seized by the Air Custom Officer at the airport. The petitioner, a non-resident Indian working in Dubai, applied for release through his advocate but received no response from the authorities.

2. Application for Release and Lack of Response:
The petitioner, through his advocate, applied for the release of the currency but did not receive any reply from the authorities. The respondent claimed that the petitioner did not cooperate or provide necessary documents to prove legitimate possession of the currency, leading to a distinction between detention and seizure of the currency.

3. Failure to Issue Show Cause Notice (SCN):
The petitioner highlighted Section 110(2) of the Customs Act, which mandates the issuance of a written Show Cause Notice (SCN) under Section 124(a) within a specified time frame. Despite more than eighteen months passing since the seizure, no SCN was issued to the petitioner, and his application for release remained pending.

4. Legality of Detention and Seizure:
The court emphasized the distinction between detention and seizure of goods under the Act. It noted that the Customs Department cannot detain goods indefinitely instead of seizing them, and failure to issue a SCN within the prescribed time frame necessitates the release of seized goods to the rightful owner.

5. Time Limit for Determining Confiscation:
Section 110(2) of the Act sets a maximum time limit for issuing a SCN, extendable under certain conditions. The court clarified that the Customs Department must follow the prescribed procedures for confiscation and release of seized goods, including provisional release as outlined in Section 110A.

6. Legal Justification for Detention and Release of Seized Goods:
The judgment concluded that there was no legal basis for the Customs Department's actions in detaining the Nepalese currency without issuing a SCN within the stipulated time frame. As per Section 110(2) of the Act, the seized goods must be returned to the person from whom they were seized if a SCN is not issued within the specified period.

7. Resolution and Directive for Release:
In the final directive, the court ordered the release of the Nepalese currency to the petitioner upon presenting a certified copy of the order to the warehouse superintendent within two weeks. The writ petition was disposed of with this resolution, emphasizing the legal obligations under the Customs Act regarding the release of seized goods.

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