2000 (9) TMI 78 - HC - Customs

Summary

Issues Involved:

1. Seizure and confiscation of goods.
2. Compliance with procedural requirements under the Customs Act.
3. Principles of natural justice.
4. Right of the exporter to reship goods.
5. Legality of the import and ownership of goods.

Issue-wise Detailed Analysis:

1. Seizure and Confiscation of Goods:

The petitioner, a Hong Kong-based exporter, sought to quash the seizure and confiscation of its Mulberry Raw Silk goods under orders dated 16-2-1999, 17-2-1999, 1-3-1999, and 8-3-1999. The Customs Authorities seized the goods under Sections 110 and 124 of the Customs Act, 1962, without notifying the petitioner. The petitioner argued that the seizure was arbitrary and against the Act's provisions.

2. Compliance with Procedural Requirements under the Customs Act:

The Customs Authorities failed to provide notice or an opportunity for a hearing to the petitioner, the owner of the goods, before confiscation, violating Sections 110(2) and 124 of the Customs Act. Section 110(2) mandates that if no notice is given within six months of seizure, the goods must be returned. Section 124 requires a written notice and an opportunity for the owner to be heard before confiscation. The Court found a fatal procedural infirmity in the Customs Authorities' actions due to non-compliance with these sections.

3. Principles of Natural Justice:

The Court emphasized that the principles of natural justice were violated as the petitioner was not given notice or an opportunity to be heard. The petitioner had repeatedly approached the Customs Authorities and the Court for reshipment permission, but the authorities only issued notices to fictitious Indian buyers. The Court held that non-service of notice to the petitioner was a fatal infirmity, making the confiscation order illegal.

4. Right of the Exporter to Reship Goods:

The petitioner sought permission to reship the goods or sell them to new buyers. The Customs Commissioner rejected this request, stating that there was no provision in the Customs Act to allow reshipment of illegally imported goods. However, the Court directed the Customs Authorities to consider the petitioner's request for reshipment or disposal to licensed importers, as permissible by law.

5. Legality of the Import and Ownership of Goods:

The Customs Authorities argued that the goods were illegally imported as the Indian buyers were fictitious. However, the Court noted that the petitioner remained the owner of the goods as the Bills of Lading were not retired by the Indian buyers. The Court cited the Supreme Court's observation that the exporter retains ownership if the importer abandons the goods. The Court held that the petitioner's ownership was not affected by the fictitious nature of the Indian buyers.

Conclusion:

The Court quashed the confiscation orders and directed the Customs Authorities to restore the goods to the petitioner. The authorities were given the liberty to further investigate the alleged illegal import and take permissible actions. The Court also directed the authorities to consider the petitioner's request for reshipment or disposal of the goods within two months. The petition was allowed with no order as to costs.