1994 (4) TMI 85 - HC - Customs

Summary

Issues Involved:
1. Validity of seizure of goods (cloves and javitri).
2. Restriction on the import of cloves post-repeal of the Import and Export (Control) Act, 1947.
3. Reasonable belief for seizure under Section 110 of the Customs Act, 1962.
4. Date of seizure and its implications.
5. Existence of spices in North-Eastern States and their identification as indigenous or foreign origin.

Summary:

1. Validity of Seizure of Goods:
The petitioners challenged the validity of the seizure of cloves and javitri and sought permission to carry on trade in these items. The goods were detained and later seized by Customs authorities at Barauni Railway Station. The court noted that the seizure is a sine qua non for confiscation proceedings and directed that the final order in the confiscation proceedings should not be passed until the validity of the seizure is determined.

2. Restriction on Import of Cloves Post-Repeal of the Import and Export (Control) Act, 1947:
The court examined whether any restriction on the import of cloves existed after the repeal of the Import and Export (Control) Act, 1947, by the Foreign Trade (Development and Regulations) Act, 1992. It was concluded that cloves would be deemed a prohibited item within the meaning of Section 11 of the Customs Act and liable to confiscation under Section 111 unless found to be indigenous.

3. Reasonable Belief for Seizure under Section 110 of the Customs Act, 1962:
The principal point for consideration was whether there was reasonable belief on the part of the seizing officer that the goods were liable to confiscation. The court emphasized that the belief must be held in good faith and not merely a pretence. The seizure was based on information from the Assistant Security Commissioner, R.P.F. Barauni, and visual inspection and smelling by the seizing officer, supported by trade opinions which were later given up. The court found that the belief leading to the seizure was based on a general assumption that spices are not grown in North-Eastern States, which was not sufficient to constitute reasonable belief.

4. Date of Seizure and Its Implications:
There was a dispute regarding the date of seizure. The petitioners claimed the seizure was effected on 30th March 1993, while the department claimed it was on 3rd and 16th April 1993. The court noted that for the purpose of these cases, which relate to the validity of the seizure alone, it is not necessary to decide the exact date of seizure. The court proceeded on the assumption that the seizure was effected on 3rd and 16th April 1993.

5. Existence of Spices in North-Eastern States and Their Identification as Indigenous or Foreign Origin:
The court examined documents and affidavits from the States of Manipur and Nagaland, which supported the claim that spices are grown in these regions. The Customs Department's belief that spices are not grown in North-Eastern States was based on documents subsequent to the seizure and was more of a suspicion than a reasonable belief. The court concluded that the belief of the officials was mere suspicion and not reasonable belief, thus invalidating the seizure.

Conclusion:
The court allowed the applications, quashing the seizure of the goods (cloves and javitri) and held that the condition precedent for the exercise of power under Section 110 of the Customs Act was absent, making the seizure unlawful. The parties were directed to bear their own costs.