2019 (12) TMI 398 - HC - Customs

Seizure of goods - Smuggling - Confiscation of Zink Ingot alongwith vehicle - Contraband item or not - truck along with the goods were seized in exercise of power under Section 110 of the Customs Act, 1962 on reasonable belief that the goods brought into India from Nepal without any documents is liable to confiscation - point has been raised by the petitioner that before seizure, the authority was to form an opinion that he has a reasonable belief that the goods are liable for confiscation under the Act. HELD THAT - Section 123 of the Customs Act does not apply to the matter as the material seized is not any of the item mentioned under Section 123 of the Customs Act but, it is the common law that if the goods has been seized on reasonable belief that it is a smuggled goods from third country then, in that circumstances, the person from whose possession the seizure has been made, he has to show that the goods, which has been seized, does not fall in the mischief of the Customs Act or is not of a third country material. In the present case, the driver in a specific term has stated that the goods were loaded by Manoj Sah and he has stated that it is likely the goods has come from Nepal. In such circumstances, the submission of the petitioner that it is not from Nepal territory, unless it is shown by valid document or material from the person they have purchased, in such circumstances, in view of the statement of the driver, rightly the confiscation has been made and the order has been passed holding that the material is from Nepal origin and, in the present case, the driver has stated that the materials are of Manoj Sah, the petitioner no.3 whereas the petitioner no.1 Shiv Shankar Prasad (Noticee No.2) is claiming to be the owner of the goods. So, it is an unverified material as to who is the owner of the property. The vehicle has already been released and ₹ 50,000/- has been forfeited, treated to be the value of the vehicle. When the ownership of the property is in dispute, the proper course for the petitioner no.1, who is claiming to be the owner of the property, is to file proper application under Section 125 of the Customs Act before the authority of proper jurisdiction who will take a decision in accordance with law - this Court does not find that the petitioners have made out a case for interference with the impugned order passed by the Assistant Commissioner, Customs Division, Muzaffarpur Camp at Bodh Gaya. Thus, this Court is of the view that if any of the petitioners file an application under Section 125 of the Customs Act, 1962, the Authority concerned will consider the case on merit - application dismissed.

Issues Involved:
1. Validity of the seizure of goods and vehicle.
2. Confiscation of the seized goods and vehicle.
3. Imposition of penalties on the petitioners.
4. Application of Section 123 of the Customs Act, 1962.
5. Right to appeal and provisional release under Section 125 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Validity of the Seizure of Goods and Vehicle:
The petitioners challenged the order dated 14.5.2018 by the Assistant Commissioner of Customs, which ordered the confiscation of zinc ingots and the vehicle used for their transportation. The seizure was based on the interception of a truck carrying zinc ingots without proper documentation. The driver admitted to transporting the goods from a kabar shop owned by Manoj Sah. The petitioners argued that the seizure was invalid as the authorities did not form a reasonable belief that the goods were liable for confiscation. However, the court noted that the driver’s statements and the circumstances provided sufficient grounds for the authorities to believe that the goods were smuggled from Nepal.

2. Confiscation of the Seized Goods and Vehicle:
The Assistant Commissioner ordered the absolute confiscation of the seized zinc ingots under Section 111(b) of the Customs Act, 1962, and the confiscation of the vehicle under Section 115(2) of the Customs Act, 1962. The vehicle was allowed to be redeemed on payment of a fine, which had already been deposited by the driver. The court upheld the confiscation, noting that the driver’s statements and the lack of documentation supported the conclusion that the goods were smuggled.

3. Imposition of Penalties on the Petitioners:
Penalties were imposed on the noticees under Section 112 of the Customs Act, 1962. Noticee No.1 (the driver) was fined ?10,000, Noticee No.2 (the owner of the kabar shop) was fined ?10,000, and Noticee No.3 (Manoj Sah) was fined ?5,000. The court found that the penalties were justified based on the involvement of the noticees in the transportation and possession of the smuggled goods.

4. Application of Section 123 of the Customs Act, 1962:
The petitioners argued that the burden of proof under Section 123 of the Customs Act, 1962, was wrongly placed on them. However, the court clarified that Section 123 did not apply to zinc ingots, as they were not specified under the section. Nonetheless, the court held that the petitioners were required to prove that the goods were not smuggled, given the reasonable belief formed by the authorities based on the driver’s statements and the circumstances of the seizure.

5. Right to Appeal and Provisional Release under Section 125 of the Customs Act, 1962:
The court noted that the petitioners had the option to appeal and seek provisional release under Section 125 of the Customs Act, 1962. The petitioners were advised to file a proper application under Section 125 before the appropriate authority to seek the release of the confiscated goods. The court dismissed the writ application, stating that the petitioners had not made a case for interference with the impugned order.

Conclusion:
The court upheld the seizure and confiscation of the zinc ingots and the vehicle, as well as the imposition of penalties on the petitioners. The petitioners were advised to seek relief under Section 125 of the Customs Act, 1962, by filing an appropriate application before the concerned authority. The writ application was dismissed with the observation that the petitioners had not established grounds for interference with the Assistant Commissioner’s order.

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