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2020 (10) TMI 500 - HC - CustomsExtended period of Limitation for issuing SCN - Release of seized goods - situation during COVID-19 lockdown - Smuggling - Gold - Section 110(2) of the Customs Act, 1962 - case of petitioner is that the seized gold bars were not smuggled gold, those were purchased by the father of the Petitioner for the marriage of his sister long back from the local market in Kerala. Petitioner had carried six gold bars to Mumbai for making ornaments for the marriage. HELD THAT - A conjoint reading of Sections 110(2) and 124 of the Customs Act would make it clear that a show-cause notice has to be issued to the person from whom the goods were seized within six months of seizure, failing which the goods shall be returned to the person from whose possession the goods were seized. However, it is provided under the first proviso that the said period of six months can be extended for a further period not exceeding six months by the higher authority for reasons to be recorded in writing with intimation to the person concerned within the extended period. Coming to the facts of the present case, it is seen that the goods were seized from the Petitioner on the intervening night of 4th and 5th October 2019. The period of six months would have expired on 5th April 2020. It was during this period that the show-cause notice under Section 124(a) was required to be issued as per the requirement of Sub Section (2) of Section 110. However, as per the proviso this period could be extended for a further period not exceeding six months after complying with the conditions mentioned in the first proviso. Within the initial period of six months Petitioner was informed by the office of Commissioner of Customs, Pune that Commissioner of Customs, Pune being the competent authority had accorded sanction under the proviso to Section 110(2) and had granted further time to issue show-cause notice. The extended period of limitation upto six months as per the first proviso to Sub Section (2) of Section 110 of the Customs Act stood extended by Section 6 of the above Ordinance till 29.09.2020. This is fortified by the order of the Supreme Court dated 23.03.2020 passed in exercise of powers under Article 142 of the Constitution of India read with Article 141 thereof - It is during such extended limitation period that Joint Commissioner of Customs, Pune has issued show-cause notice to the Petitioner under Section 124(a) of the Customs Act dated 21.09.2020 calling upon the Petitioner to show-cause in writing before the adjudicating authority as to why the seized gold should not be confiscated besides imposition of penalty. Thus, it is evident that show-cause notice under Section 124(a) has been issued to the Petitioner within the extended limitation period. Therefore, the rigour of Sub Section (2) of Section 110 would not be applicable in the case of the Petitioner. Consequently, question of returning the seized goods to the Petitioner under Section 110(2) would not arise. It is true that Delhi High Court in KRAMPE HYDRAULIK (INDIA) AND ORS. VERSUS UNION OF INDIA (UOI) AND ORS 2003 (7) TMI 694 - DELHI HIGH COURT had held that the total effect of the provisions of Section 110(2) read with Section 124(a) would be that not giving notice within six months of seizure or within the further extended period of six months would entitle the person concerned to return of the seized goods without any condition. Had the pandemic not intervened, had the Supreme Court not passed the order on 23.03.2020 and had the Ordinance not extended the limitation period across board till 30.06.2020 and thereafter till 29.09.2020, certainly Petitioner would have had a valid claim to return of the seized goods under Section 110(2). But because of the aforesaid developments, the limitation period stood further extended and within such extended limitation period the show-cause notice under Section 124(a) of the Customs Act was issued. Petition dismissed.
Issues Involved:
1. Legality of the non-release of seized gold under Section 110(2) of the Customs Act, 1962. 2. Validity of notices dated 26.03.2020 and 27.05.2020 issued by the customs authorities. 3. Request for the release of seized gold weighing 699.88 grams valued at ?27,08,136.00. 4. Request to drop proceedings initiated under the Customs Act, 1962. Detailed Analysis: 1. Legality of the Non-Release of Seized Gold under Section 110(2) of the Customs Act, 1962: The Petitioner argued that the seizure of gold bars on 04.10.2019 was illegal since no notice under Section 124(a) of the Customs Act was issued within six months, as required by Section 110(2). The Respondents countered that the competent authority had extended the period for issuing the notice, and the extension was communicated to the Petitioner. The Court noted that the proviso to Section 110(2) allows for an extension of up to six months by the Principal Commissioner or Commissioner of Customs, provided reasons are recorded in writing and communicated before the expiry of the initial six months. The Court found that the Respondents complied with this requirement, and the extension was valid. 2. Validity of Notices Dated 26.03.2020 and 27.05.2020: The Petitioner sought to quash the notices dated 26.03.2020 and 27.05.2020, arguing they were issued beyond the permissible period. The Respondents justified the notices by citing the Supreme Court's order dated 23.03.2020 in Writ Petition (Suo Motu) No. 3 of 2020, which extended the period of limitation due to the Covid-19 pandemic. The Court acknowledged the Supreme Court's order and the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, which extended the limitation period to 29.09.2020. Therefore, the Court held that the notices were validly issued within the extended period. 3. Request for the Release of Seized Gold: The Petitioner requested the release of the seized gold, claiming it was not smuggled but purchased by his father for his sister's marriage. The Respondents argued that the gold bars were of foreign origin and suspected to be smuggled. The Court observed that the show-cause notice dated 21.09.2020 was issued within the extended limitation period, thus fulfilling the requirements under Section 124(a) of the Customs Act. Consequently, the Court held that the seized gold could not be returned to the Petitioner under Section 110(2) as the show-cause notice was issued within the permissible period. 4. Request to Drop Proceedings Initiated Under the Customs Act, 1962: The Petitioner sought to drop the proceedings initiated under the Customs Act, 1962. The Court noted that the issuance of the show-cause notice within the extended period meant that the proceedings were legally valid. The Court emphasized that the Petitioner should respond to the show-cause notice so that the adjudicating authority could pass an appropriate order in accordance with the law. Therefore, the Court held that dropping the proceedings at this stage was not warranted. Conclusion: The Court dismissed the Writ Petition, holding that the non-release of the seized gold was legal, the notices dated 26.03.2020 and 27.05.2020 were validly issued within the extended limitation period, and the request to drop the proceedings was not justified. The Petitioner was advised to respond to the show-cause notice for the adjudicating authority to pass an appropriate order. No order as to costs was made.
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