1985 (2) TMI 48 - HC - Customs

Summary

Issues Involved:
1. Legitimacy of the seizure of the consignment.
2. Validity of the show cause notice and adjudication proceedings.
3. Determination of whether the consignment contained banned items.
4. Jurisdiction and justification of the respondents' actions.

Detailed Analysis:

1. Legitimacy of the Seizure of the Consignment:
The petitioner, a registered partnership firm dealing in Indian medicinal plants, dispatched 52 bales of Vinca Rosea for export. The consignment was initially cleared by Customs authorities, but later seized on the grounds that it contained Rauwolfia serpentina, a banned item. The petitioner argued that the seizure was without basis as the consignment did not contain any banned items. The court found that the initial seizure was based on a preliminary report from the Professor of Pharmacognosy, Ayurveda Research Center, Trivandrum, which later contradicted itself. The Central Research Institute for Siddha's report, which was more scientifically detailed, concluded that the consignment did not contain Rauwolfia serpentina roots but stems of Rauwolfia canescens, which are not banned. Thus, the seizure of the consignment was deemed unjustified.

2. Validity of the Show Cause Notice and Adjudication Proceedings:
The second respondent issued a show cause notice under Section 124 of the Customs Act, 1962, alleging that the consignment contained banned items, thereby violating Section 3 of the Import and Export Control Act, 1947. The petitioner contested this, arguing that the respondents did not have a reasonable belief that the goods were prohibited at the time of seizure or during the issuance of the show cause notice. The court agreed, noting that the conflicting reports from the Ayurveda Research Center and the Central Research Institute for Siddha indicated that the respondents could not have had a reasonable belief that the consignment contained banned items. Therefore, the show cause notice and subsequent adjudication proceedings were invalid.

3. Determination of Whether the Consignment Contained Banned Items:
The primary question was whether the consignment contained Rauwolfia serpentina, a banned item. The initial report from the Professor of Pharmacognosy suggested the presence of Rauwolfia serpentina, but a subsequent report contradicted this, stating that the consignment contained Rauwolfia canescens stems. The Central Research Institute for Siddha's report, which included macroscopic, microscopic, and chromatographic analyses, confirmed that the consignment contained Vinca Rosea roots and stems and Rauwolfia canescens stems, but no Rauwolfia serpentina roots. The court accepted this report as it provided a detailed scientific basis for its conclusions, unlike the reports from the Ayurveda Research Center.

4. Jurisdiction and Justification of the Respondents' Actions:
The court examined whether the respondents had the jurisdiction and justification to initiate proceedings against the petitioner. It found that the respondents could not have reasonably believed that the consignment contained banned items based on the conflicting expert opinions. Additionally, the court noted that the documents seized from the petitioner, which indicated the purchase of Rauwolfia serpentina, were insufficient to justify the seizure and proceedings since the actual consignment did not contain this banned item. Consequently, the court held that the actions taken by the respondents were without jurisdiction and justification.

Conclusion:
The court issued a writ of certiorified mandamus quashing the show cause notice dated 12th July 1984, as amended by the notice dated 27th July 1984, and the adjudication proceedings pursuant thereto. It directed the respondents to release the goods seized under the order dated 10th August 1984. The writ petition was allowed, and the rule nisi was made absolute, with no order as to costs.