2016 (8) TMI 638 - HC - Customs

Movement of betel nuts - the goods were seized by the Customs authorities on the suspicion that they were liable to be confiscated - Held that - Nothing is brought to show that the Customs authorities could not have seized the goods from wherever they were seized in Kolkata or that the institute whereat the goods were tested could not have been approached for such purpose. No law or any official document has been produced either in support of the petitioner s contention that the seizure was illegal or in support of the petitioner s assertion that the test-house cannot be approached by the Customs authorities for any purpose whatsoever. The additional ground, equally laughable and fallacious, urged on behalf of the petitioner is that there is a rivalry between South Indian betel nut growers and the betel nut growers in the North-East such that any report of North-East betel nut sought from a test-house run by the cooperative of South- Indian betel nut growers would only be to the chagrin of the North-East betel nut growers. For the petitioner s exercise of this present frivolity, the petitioner will immediately pay costs assessed at ₹ 50,000/- to the Customs authorities, which will abide by the final outcome of the proceedings that may be instituted against the petitioner upon the matters covered by the show-cause notice being decided by the Department as expeditiously as possible. - Decided against the petitioners.

Summary

Issues:
1. Recall of order dated January 28, 2016 and restoration of WP No. 674 of 2015.
2. Challenge to the show-cause notice issued under Section 124 of the Customs Act, 1962.
3. Validity of the testing of seized goods by a private testing house.
4. Interpretation of the judgment of the Patna High Court in a similar case.
5. Justifiability of the petitioner's challenge to the show-cause notice.
6. Imposition of costs on the petitioner for challenging the show-cause notice.

Recall and Restoration of WP No. 674 of 2015:
The Court allowed the restoration application, recalling the order dated January 28, 2016, and restoring WP No. 674 of 2015 without any costs. The Customs authorities were represented, and the case was taken up for immediate consideration.

Challenge to Show-Cause Notice:
The petitioner contested the show-cause notice issued by Customs authorities regarding the seized goods, betel nuts. The petitioner argued that the goods were wrongly seized without proper grounds and that the show-cause notice did not establish any impermissible act under Section 111 of the Customs Act, 1962.

Validity of Testing by Private Testing House:
The petitioner questioned the validity of the testing conducted by a private testing house, citing a judgment from the Patna High Court. The petitioner claimed that the testing house's report, stating the goods were of foreign origin, was unreliable as the testing house was not accredited under the relevant statute.

Interpretation of Patna High Court Judgment:
The Court distinguished the Patna High Court judgment cited by the petitioner, emphasizing the differences in the legal context and the nature of testing involved. The Court highlighted that the petitioner's reliance on the Patna judgment was misplaced as the circumstances of the present case were distinct.

Justifiability of Petitioner's Challenge:
The Court found the petitioner's challenge to the show-cause notice to be unsubstantiated and based on flimsy grounds. It emphasized that show-cause notices should not be lightly interfered with unless they are without jurisdiction or clearly erroneous. The Court criticized the petitioner's arguments as lacking legal support and imposed costs on the petitioner for frivolous litigation.

Imposition of Costs on Petitioner:
Due to the petitioner's weak challenge to the show-cause notice, the Court ordered the petitioner to pay costs of ?50,000 to the Customs authorities. The costs were to be paid immediately and would abide by the final outcome of any proceedings resulting from the show-cause notice.

In conclusion, the Court disposed of WP No. 674 of 2015, highlighting the importance of responding adequately to show-cause notices and refraining from challenging them on weak grounds. The judgment underscored the need for legal substantiation in challenging official actions and the consequences of frivolous litigation.