2023 (5) TMI 942 - HC - Customs

Validity of order of lower court for release of goods / return of goods to the accused - Smuggling - yellow coloured metallic bars believed to be gold of Foreign origin - failure to produce any document whatsoever in support of legal importation, possession, acquisition or transportation of the said goods - HELD THAT - Section 110(2) provides that where any goods are seized under sub Section 1 and no notice is given under clause (a) of Section 124 within six months of the seizure the goods, the goods shall be returned to the person from whose possession the goods have been seized. But in the present case the notice has been issued for extension of time to issue the show cause in terms of section 124 of the Customs Act and ultimately, the show cause notice under section 124 of the Customs Act, 1962 was issued to the opposite party on 01.09.2017 and the opposite party has filed his reply to the said show cause notice on 10.10.2017. Section 122A of the said Act provides for adjudication proceedings. The opposite party being aware of the same has not participated in the adjudication proceedings and has wrongly made an application before the Learned Court. The Learned Court also without appreciating the provision of Customs Act has wrongly passed the order on 05.04.2018, though, the show cause notice had been issued prior to that of the order passed by the Learned Court proposing confiscation of the goods as well as imposition of penalty, therefore, the Learned Court on 05.04.2018 ought not to have passed such order for return of the seized goods when the same has been taken care of by the adjudicating authority in terms of the Customs Act. The Supreme Court in Sunderbhai Ambalal Desai vs State of Gujarat, Special Leave Petition 2002 (10) TMI 773 - SUPREME COURT laid down the guidelines for return of seized article/vehicles etc. as per section 451 of the Cr.P.C. But the Customs Act has its own provisions for search, seizure, confiscation etc. laying down the detailed procedure in respect of cases under the Act. The Magistrate did not act in the interest of justice and the said order dated 05.04.2018 read with order dated 05.12.2018 passed in Complaint Case No. 1108 of 2016 arising out of Seizure Case No. 1/Seizure/CL/IMP/CUS/GD/2016 dated 22.09.2016 under Section 110 of Customs Act, 1962 for the offence punishable under Section 135 1(b)(ii) of the Customs Act, 1962 pending before the learned Chief Judicial Magistrate, Krishnanagar, Nadia, being not in accordance with law is clearly an abuse of the process of law and if not set aside shall lead to miscarriage of justice - Application allowed.

Summary

Issues Involved:
1. Quashing of the order directing the return of seized goods.
2. Compliance with the provisions of the Customs Act, 1962.
3. Jurisdiction and authority of the Magistrate in adjudicating customs matters.

Summary:

Issue 1: Quashing of the order directing the return of seized goods
The petitioner sought quashing of the orders dated 05.04.2018 and 05.12.2018 passed by the Chief Judicial Magistrate, Krishnanagar, Nadia, which directed the return of seized articles to the accused upon furnishing a bond of Rs. 1 crore. The petitioner contended that the Magistrate's order was contrary to the provisions of the Customs Act, 1962, and was passed without proper consideration of legal provisions.

Issue 2: Compliance with the provisions of the Customs Act, 1962
The petitioner argued that the seized goods were confiscated under Section 110 of the Customs Act, 1962, and the process of confiscation was already initiated via a show cause notice issued on 01.09.2017. The opposite party had filed a reply to the show cause notice but avoided personal hearings. The department had followed due process, including obtaining voluntary statements and conducting chemical tests to confirm the gold's purity.

Issue 3: Jurisdiction and authority of the Magistrate in adjudicating customs matters
The petitioner asserted that the Magistrate exceeded jurisdiction by ordering the return of the seized goods, as the Customs Act has specific provisions for adjudication, confiscation, and penalties. The Magistrate's order was passed without notifying the customs authorities, and it interfered with the ongoing confiscation proceedings. The court emphasized that the Customs Act has its own detailed procedures for handling such cases, which the Magistrate failed to appreciate.

Conclusion:
The High Court found that the Magistrate did not act in the interest of justice and that the orders dated 05.04.2018 and 05.12.2018 were an abuse of the process of law. Consequently, the orders were quashed and set aside. The High Court allowed the revision petition, emphasizing the necessity to follow the Customs Act's provisions and procedures. No costs were ordered, and all connected applications were disposed of, with interim orders vacated. The judgment was directed to be sent to the Trial Court for compliance, and an urgent certified website copy was to be supplied if applied for.