1985 (12) TMI 56 - HC - Central Excise

Issues Involved:
1. Legality of the seizure of goods and records.
2. Applicability of Section 110 and Section 118(a) of the Customs Act.
3. Definition and role of the "proper officer" in the context of the seizure.
4. Relevance of various rules and provisions cited by the respondents to justify the seizure.

Detailed Analysis:

1. Legality of the Seizure of Goods and Records:
The petitioner, a registered partnership firm engaged in manufacturing synthetic organic dyestuff, challenged the seizure of 30 drums of semi-finished dyestuff and several records by Central Excise officials. The petitioner argued that the seizure was illegal as the proper officer did not have a "reason to believe" that the goods were liable to confiscation, a prerequisite under Section 110 of the Customs Act, which is applicable to the Central Excises and Salt Act, 1944.

2. Applicability of Section 110 and Section 118(a) of the Customs Act:
The respondents contended that the seizure was justified under Section 118(a) of the Customs Act. However, the court found that Section 118(a) only allows for the confiscation of packages containing excisable goods and any other goods in the package if the provisions of the Act have been contravened. This section does not authorize the seizure of the excisable goods themselves. The court emphasized that the seizure must be justified under Section 110(1) of the Customs Act, which requires the proper officer to have a "reason to believe" that the goods are liable to confiscation.

3. Definition and Role of the "Proper Officer":
The court scrutinized whether the officials who conducted the seizure were "proper officers" as defined under Rule 2(xi) of the Central Excise Rules, 1944. The definition specifies that the proper officer is the one in whose jurisdiction the premises of the producer of excisable goods are located. The court found that the seizure was conducted by subordinates and not by the proper officer, who in this case would be the Collector of Central Excise and Customs at Madurai. Since the proper officer did not entertain a reasonable belief regarding the liability of the goods to confiscation, the seizure was deemed invalid.

4. Relevance of Various Rules and Provisions Cited by the Respondents:
The respondents cited multiple rules and provisions, including Rules 173(g), 226, 202, 118(a), 197, 173(a), 37(4), 49, 52, and 53, to justify the seizure. The court systematically dismissed these arguments, stating that none of these provisions directly authorize seizure. For instance, Rule 173G pertains to the procedure for maintaining accounts, and Rule 173Q deals with confiscation and penalties but not seizure. Similarly, Rule 202 relates to the inspection and examination of premises, and Rule 49 concerns the duty chargeable on the removal of goods. The court concluded that these rules do not provide a legal basis for the seizure in question.

Conclusion:
The court held that the seizure was illegal due to the absence of a reasonable belief by the proper officer and the misapplication of the cited provisions. The petition was allowed with costs, and the seizure was quashed. The court also referenced Section 22 of the Central Excises and Salt Act, which penalizes officers for conducting searches or seizures without reasonable grounds, underscoring the importance of adherence to legal procedures in such matters.

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