2020 (10) TMI 73 - HC - Customs

Release of detained and seized goods - kerosene / diesel - prohibited goods or not - large scale mis-declaration of goods as mineral hydrocarbon oil with a view to smuggle in kerosene / diesel by some importers - waiver of demurrage charges incurred till release of the goods - HELD THAT - The goods in question have been seized under section 110 of the Customs Act. From a reading of sub-section (1) of section 110, it is evident that seizure of a good is not an end in itself. It is a means to an end. The end is confiscation, if justified and warranted. From the pleadings it is seen that the goods were put on hold and thereafter seized in the first week of January, 2020. Considering that the goods in question, be it mineral hydrocarbon oil as claimed by the petitioner or kerosene / high speed diesel as claimed by the respondents, are highly inflammable and hazardous, a proceeding related thereto is required to be decided expeditiously. The adjudicating authority is required to decide whether goods are liable for confiscation or not; adjudication cannot be kept pending. He may also have to decide whether the goods should be sold or not having regard to the hazardous and inflammable nature of the goods. Petitioner is granted liberty to file appeal before the CESTAT under section 129-A(1)(a) of the Customs Act against the order dated 31.08.2020 - If such appeal is filed within a period of four weeks from today and an application is made for early hearing, CESTAT shall decide the appeal within a period of four weeks thereafter considering the limited nature of the grievance of the petitioner. Petition disposed off.

Issues Involved:
1. Legality of seizure memos and test reports.
2. Request for re-testing of goods.
3. Release of seized goods.
4. Presence of a lawyer during interrogation.
5. Issuance of a detention certificate for waiver of demurrage charges.
6. Conditions imposed for provisional release of goods.
7. Allegations of coercion and duress during interrogation.
8. Hazardous nature of seized goods and their storage.

Detailed Analysis:

1. Legality of Seizure Memos and Test Reports:
The petitioners challenged various seizure memos and test reports, arguing that the goods declared as mineral hydrocarbon oil were wrongly identified as kerosene, leading to their seizure under section 111(m) of the Customs Act, 1962. The respondents justified the seizure based on intelligence regarding mis-declaration and subsequent test reports confirming the goods as kerosene, a restricted item for import.

2. Request for Re-Testing of Goods:
The petitioners requested re-testing of the seized goods by another government-recognized laboratory. This request was denied by the respondents, citing the evidence recovered during the investigation and the non-bonafide conduct of the importer.

3. Release of Seized Goods:
The petitioners sought the release of the seized goods. The respondents initially denied provisional release, citing the goods as prohibited under section 2(33) of the Customs Act. However, the Commissioner later granted provisional release under section 110-A of the Customs Act, subject to stringent conditions.

4. Presence of a Lawyer During Interrogation:
The petitioners requested the presence of a lawyer during interrogation, which was not addressed directly in the judgment.

5. Issuance of a Detention Certificate for Waiver of Demurrage Charges:
The petitioners sought a detention certificate for waiver of demurrage charges incurred due to the seizure. This was not directly addressed in the judgment.

6. Conditions Imposed for Provisional Release of Goods:
The Commissioner imposed conditions for provisional release, including execution of a bond and security deposit covering differential duty, redemption fine, and penalty. The petitioners argued these conditions were unreasonable and contrary to the circular dated 16.08.2017 of the Central Board of Excise and Customs. The court granted the petitioners liberty to appeal to CESTAT against these conditions.

7. Allegations of Coercion and Duress During Interrogation:
The petitioners alleged that the confessional statement was obtained under coercion and duress, which was retracted later. The respondents denied these allegations, stating the statement was made voluntarily.

8. Hazardous Nature of Seized Goods and Their Storage:
The court addressed the hazardous nature of the seized goods and the risk they posed. The court allowed the petitioners to approach the Commissioner for transferring the goods to a safer place under customs supervision.

Final Directions:
1. Liberty to file an appeal before CESTAT against the order dated 31.08.2020.
2. CESTAT to decide the appeal within four weeks if filed within four weeks from the judgment date.
3. Adjudicating authority to initiate and conclude the adjudication process within four weeks.
4. Liberty to file an application for the sale of seized goods, with a decision to be made within two weeks.
5. All contentions kept open without expressing any opinion on merits.

Application to Other Writ Petitions:
The directions were made applicable to Writ Petition Nos. 2499 of 2020 and 2501 of 2020. All writ petitions were disposed of without any order as to costs.

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