2024 (6) TMI 787 - HC - Customs

Smuggling - Challenge to action of seizure of areca nuts by the officials of the respondent customs department while exercising power under section 110 of the Customs Act, 1962 - invocation of extra-ordinary powers under Article 226 of the Constitution of India - HELD THAT - The Hon ble Supreme Court in Indru Ramchand Bharvani 1988 (7) TMI 78 - SUPREME COURT has observed that reasonable belief as to smuggled goods had been explained by the Hon ble Supreme Court in State of Gujarat vs. Mohanlal Jitamalji Porwal Anr. 1987 (3) TMI 111 - SUPREME COURT , wherein the Hon ble Supreme Court observed whether or not the official concerned has seized the article under reasonable belief that the goods are smuggled goods is not a question on which the Court can sit on appeal. The circumstance under which the officer entertains reasonable belief have to be judged from his experienced eye who is well equipped to interpret the suspicious circumstances to form a reasonable belief. In the present case, the officer concerned acted on the basis of information that huge quantity of areca nuts, smuggled from Myanmar, were lying at Bairabi Railway Station, Mizoram and to be loaded in Railway Parcel Wagons for transporting to Uttar Pradesh. On receiving the said information, he activated the machinery and carried out a raid at the concerned railway station where huge quantity of areca nuts, possibly smuggled from Myanmar, were found. Taking into consideration the above facts, it can be presumed that the officer concerned had the reason to believe that the goods seized were liable for confiscation. The view expressed by the learned Single Judge in the impugned judgement is one of the possible views, therefore, no interference required - this intra-court appeal is dismissed.

Summary

Issues:
1. Challenge to the seizure of areca nuts under the Customs Act.
2. Validity of the Show Cause Notice issued by the customs department.
3. Maintainability of the writ petition under Article 226 of the Constitution.

Detailed Analysis:
Issue 1: The appellants challenged the seizure of areca nuts by the customs department under section 110 of the Customs Act. The appellants argued that the seizure was without jurisdiction as the officer did not have a reason to believe that the goods were liable for confiscation. They contended that the officer failed to follow the mandatory instructions issued by the Central Board of Excise and Customs, which required clear reasons for believing that the goods were liable for confiscation. The appellants claimed that the seizure proceedings were unsustainable under the Customs Act due to the lack of specific details in the seizure memo.

Issue 2: The appellants also challenged the validity of the Show Cause Notice issued under section 124 of the Customs Act, alleging that it contained incorrect and baseless facts. They argued that the notice was illegal and not sustainable. The appellants maintained that the writ petition under Article 226 was maintainable against the Show Cause Notice if it was illegal and without jurisdiction. They cited various Supreme Court pronouncements to support their contention that challenging a Show Cause Notice under Article 226 was permissible in such circumstances.

Issue 3: The appellants contended that the learned Single Judge had dismissed the writ petition incorrectly by not appreciating their contentions. They argued that the seizure proceedings and the Show Cause Notice were without jurisdiction and in violation of the law. The appellants claimed that the impugned judgment should be set aside, and the relief sought in the writ appeal should be granted. On the other hand, the respondents argued that the Single Judge rightly refused to interfere under Article 226, as the actions of the customs authorities were lawful and based on a reasonable belief of confiscation.

The Judgment: The learned Single Judge concluded that challenging a Show Cause Notice was limited to specific conditions such as lack of jurisdiction, competence, bona fide exercise of power, mala fide exercise of power, and violation of natural justice. The Single Judge observed that the actions of the customs authorities were based on a subjective satisfaction of the competent authority, supported by information regarding the commission of an offense. The Single Judge relied on Supreme Court judgments to assert that interference at the stage of a Show Cause Notice issuance was not favored. The High Court, after considering the arguments and precedents, upheld the Single Judge's decision, stating that it was one of the possible views and declined to interfere. The High Court directed the authorities to expedite the pending proceedings related to the Show Cause Notice within three months from the judgment date.