2024 (8) TMI 1161 - HC - Customs

Seeking release of seized goods - reasons to believe - Section 110 of the Customs Act, 1962 - HELD THAT - Reasons to believe words incorporated under section 110 of the Customs Act, 1962 has been interpreted by this Court in the case of M/S OM SAI TRADING COMPANY AND M/S MAA KAMAKHYA TRADERS, VERSUS THE UNION OF INDIA, THE COMMISSIONER OF CUSTOMS AND ORS. 2019 (9) TMI 1283 - PATNA HIGH COURT and it was subject matter of litigation before the Hon ble Supreme Court, however, having regard to the facts of the case interpretation of reasons to believe has not been examined and it was left over to be examined in some other cases. Para-4 of the circular dated 08.02.2017 stipulated that at the time of seizure Panchnama was required to be drawn clearly mentioning the reasons to believe that goods are liable for confiscation. There is disputed issue as to whether driver of the vehicle had produced relevant documents at 21.00 hrs. on 19.06.2021 or not. In fact, at para 13 of the writ petition, petitioner has admitted that documents have been produced in the office of customs department, therefore, one has to draw inference that driver of the vehicle was not carrying the documents in respect of transportation of seized goods and other ancillary papers. Further, RUD-05 E-way Bill generated on 19.06.2021 9.26 pm and seizure is at 9.30 pm on 19.06.2021, some alleged discrepancies are reflected. Be that as it may, under Article 226 Court cannot examine disputed issues among the parties. The petitioner has not made out a case. Accordingly, the present writ petition stands dismissed.

Summary

Issues:
Petition for quashing of Seizure Memo dated 19.06.2021 and release of seized goods, alleged violation of Customs Act and related laws, compensation for illegal seizure, compliance with Section 110 of the Customs Act, validity of seizure based on "reasons to believe," production of relevant transportation documents, disputed issue of document production by driver, dismissal of writ petition.

Analysis:
1. The petitioner sought relief for quashing the Seizure Memo dated 19.06.2021 and the release of seized goods, which included edible oils and a vehicle, alleging violations of various provisions of the Customs Act, 1962, Foreign Trade Act, and CGST Act, 2017.

2. The petitioner claimed ownership of the seized goods, stating they were in transit from Sitamarhi to Dubhi when customs authorities seized them and released them provisionally under a bank guarantee pending adjudication.

3. The petitioner challenged the seizure memo, arguing that the seizing officer failed to include the crucial "reasons to believe" element as required by Section 110 of the Customs Act, citing a circular and a previous court decision to support the contention.

4. The respondent's counsel defended the seizure, asserting that the Panchnama and relevant provisions allegedly violated by the petitioner were adequately addressed in the seizure memo, referencing a specific case in support of their argument.

5. It was highlighted that during the seizure, the petitioner could not produce sufficient transportation documents, only providing a single chit, leading to the necessity of adjudication by customs authorities to determine the legitimacy of the goods' transit.

6. The court examined Section 110 of the Customs Act and a related circular, emphasizing the importance of "reasons to believe" in seizure actions, and referenced a previous case to clarify the interpretation and application of this requirement.

7. The court noted the necessity for cited legal provisions in seizure actions and emphasized that the provision of the violated law is sufficient to fulfill the "reasons to believe" requirement.

8. A co-ordinate Bench decision was cited to illustrate the clarity required in specifying reasons for seizure, emphasizing the importance of compliance with legal provisions in such actions.

9. The petitioner contended that they had submitted valid transportation documents to the customs department, while the respondent disputed this claim, citing the lack of relevant documents at the time of seizure.

10. Discrepancies arose regarding the production of documents by the driver at the time of seizure, leading to conflicting assertions between the parties, with the court unable to resolve disputed factual issues in a writ petition.

11. The court highlighted the importance of factual clarity and the inability to resolve disputed issues in a writ petition, particularly concerning the production of relevant documents during the seizure.

12. Considering the facts and circumstances, the court concluded that the petitioner failed to establish a case, resulting in the dismissal of the writ petition.

13. Despite the dismissal, the petitioner was directed to cooperate with customs authorities in the pending adjudication process, while authorities were instructed to expedite the matter within a reasonable timeframe of six months.