2023 (11) TMI 1088 - HC - Customs

Validity of a Seizure Memo and SCN - respondents have called upon the petitioner to show cause why the gold jewellery and ornaments weighing approximately 20,756 grams should not be confiscated - HELD THAT - On a holistic consideration of the SCN, the contention cannot be accepted that the same is a manifestation of a predisposed state of mind of the respondents - also it is a well settled principle that courts should desist from entertaining challenges to SCNs and interference being warranted only in exceptional circumstances and where it be found that the same is questioned on jurisdictional grounds. The challenge as mounted in terms of the instant writ petition clearly fails to meet the aforesaid tests as formulated. The challenge laid to the impugned SCN is negativated - the writ petition is disposed off by observing that the competent authority shall endeavour to dispose of and conclude the SCN proceedings within a period of two months from today.

Issues Involved:
1. Validity of the Seizure Memo dated 19 January 2023.
2. Validity of the Show Cause Notice (SCN) dated 17 July 2023.
3. Allegation of predisposition by respondents in the SCN.
4. Respondents' intent to dispose of gold before the completion of confiscation proceedings.
5. Jurisdictional challenge to the SCN.

Summary:

1. Validity of the Seizure Memo dated 19 January 2023:
The petitioner challenged the Seizure Memo dated 19 January 2023, which led to the seizure of gold jewellery and ornaments weighing approximately 20,756 grams. The seizure was effected following a detailed investigation.

2. Validity of the Show Cause Notice (SCN) dated 17 July 2023:
The petitioner also contested the SCN dated 17 July 2023, arguing that it indicated a predetermined opinion of the respondents regarding the petitioner's guilt. The SCN outlined the modus operandi and tentative conclusions based on the investigation, suggesting a conspiracy to deal in smuggled gold of foreign origin.

3. Allegation of predisposition by respondents in the SCN:
The petitioner argued that the SCN's detailed nature and the use of expressions like "it appears" indicated a predisposed state of mind by the respondents. The court, however, found that the SCN was based on tentative conclusions and did not reflect a predetermined decision.

4. Respondents' intent to dispose of gold before the completion of confiscation proceedings:
The petitioner questioned the respondents' intent to dispose of the seized gold before completing the confiscation proceedings, claiming it violated the Customs Act, 1962. The respondents countered that Section 110(1D) of the Act permits the disposal of seized goods independent of a confiscation order. However, they agreed to defer any action under this section pending the SCN proceedings.

5. Jurisdictional challenge to the SCN:
The court noted that challenges to SCNs should only be entertained in exceptional circumstances, particularly on jurisdictional grounds. The petitioner's challenge did not meet these criteria.

Conclusion:
The court dismissed the challenge to the SCN, directing the competent authority to conclude the SCN proceedings within two months, provided the petitioner cooperates. The respondents agreed to defer any action under Section 110(1D) of the Act until the SCN proceedings are concluded. The writ petition and pending applications were disposed of, with all rights and contentions of the parties remaining open for consideration by the competent authority.

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