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2022 (2) TMI 1133 - HC - CustomsTime Limitation - validity of SCN - whether the SCN given under Section 124 of the Act after six months of seizure can be sustained under the law? - HELD THAT - Section 124 of the Act provides that no order of confiscation of any goods or imposing of penalty on any person is to be made under Chapter XIV, unless the notice has been served upon the person who is the owner of the goods, in writing with prior approval of the officer of customs not below the rank of an Assistant Commissioner of Customs informing the grounds on which it is to be confiscated or for imposition of penalty. The mode of service of notice prior to the amendment by Finance Act, 2018 included the summons or notice issued under Section 153 of the Act. This Court in DEEPAK NATVARLAL SONI VERSUS UNION OF INDIA 2018 (9) TMI 1912 - GUJARAT HIGH COURT was considering the similar issue and addressed this question of issuance of the notice as envisaged under Section 110(2) vis-a-vis Section 124 and Section 153 which is no longer res integra. After a detailed discussion, it had been held that the action of respondents-authority in not returning the goods seized upon failure to comply with Sections 110(2), 124 and 153 of the Act, is illegal and the writ petition was allowed by directing the respondents to return all gold ornaments/gold items and two apple I-phones seized under panchnama to the petitioner within a specified period unconditionally subject to adjudication process to be carried out afresh in accordance with law. Mandate of Sub-section (2) of Section 110 of the Act is crystal clear that if no notice is given under clause (a) of section 124 of the Act for confiscation within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized provided that the Principal Commissioner of Customs for reasons to be recorded in writing can extend this period, not exceeding the period of six months and inform the concerned person from whom such goods were seized before expiry of the period so specified. It is further needed to be specified that where an order for provisional release of the seized goods has been passed under Section 110 A of the Act, the specified period of six months shall not apply - In the instant case, admittedly there has been no provisional release of the seized goods. Further extension of six months with the reasoned order by the Principal Commissioner of Customs or Commissioner of Customs also is completely missing. The period of six months from the date of signature expired on 03.10.2019. Even further period of six months as provided in the first proviso to Section 110(2) also got over on 03.04.2020. Of course, in absence of any order, much less reasoned order by prescribed authority, extension would need to be disregarded yet, the respondents chose not to return the seized currency or mobile phones and the request of the petitioner has not been addressed nor replied to. The Court notices that nothing has been explained in the entire reply of 27 paragraphs with regard to the non compliance of the statutory mandate under Section 110(1)(2) read with Section 124 of the Act. It is quite unfathomable as to why the time limit is not adhered to and issuance of the show cause notice has been delayed beyond the statutory time period and hence, intervention will be necessary at the end of this Court by keeping open the rights of the respondents to initiate adjudication process afresh in accordance with law. Petition allowed.
Issues Involved:
1. Legality of the seizure and retention of cash and other items by the Directorate of Revenue Intelligence (DRI). 2. Compliance with the statutory period for issuing a show cause notice under Section 110(2) of the Customs Act, 1962. 3. Entitlement of the petitioner to the return of seized goods and cash due to the lapse of the statutory period. Issue-wise Detailed Analysis: 1. Legality of the Seizure and Retention of Cash and Other Items by the DRI: The petitioner, a sole proprietor of JBM Textiles, Surat, engaged in textile trading and export, faced a search operation by the DRI on 03.04.2019. During this operation, cash amounting to ?64,86,100/-, two mobile phones, and business documents were seized. The petitioner claimed that his signature on the panchnama was obtained forcibly. Despite the seizure, there was no proposal for confiscation of the seized items. The respondents issued a show cause notice on 27.11.2020 concerning alleged illegal export activities by M/s. Amira Impex, involving the petitioner. The petitioner argued that the statutory period for issuing such a notice had lapsed, and thus, the seized items should be returned. 2. Compliance with the Statutory Period for Issuing a Show Cause Notice under Section 110(2) of the Customs Act, 1962: Section 110(2) mandates that if no show cause notice is issued within six months of the seizure, the seized goods must be returned. This period can be extended by the Principal Commissioner of Customs or Commissioner of Goods for a further six months. In this case, the search was conducted on 03.04.2019, and the show cause notice was issued on 27.11.2020, well beyond the statutory period. The respondents failed to provide any reasoned order for extending the period, thus violating the statutory provisions. 3. Entitlement of the Petitioner to the Return of Seized Goods and Cash Due to the Lapse of the Statutory Period: The court emphasized that the respondents did not comply with the statutory mandate under Section 110(2) and Section 124 of the Customs Act. The respondents' failure to issue a show cause notice within the prescribed period or to provide a reasoned order for extension led to the conclusion that the seizure and continued retention of the items were illegal. The court referred to previous judgments, such as Deepak Natvarlal Soni vs. Union of India, which established that non-compliance with these provisions necessitates the return of seized goods. Conclusion: The court ruled in favor of the petitioner, stating that the respondents must return the seized cash and other items within eight weeks. The respondents retain the right to initiate adjudication proceedings afresh, in accordance with the law, if permissible. The judgment underscores the importance of adhering to statutory timelines and procedures in seizure and confiscation cases under the Customs Act.
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