2016 (6) TMI 350 - HC - Customs

Seeking direction for unconditional release of goods imported - seized under panchnama - Non-issuance of SCN to the petitioner till date rather it should have been issued within six months from the date of seizure of goods - Section 110 (2) of the Customs Act, 1962 - Held that - in view of the various decisions various Courts, the action of the Department in continuing to retain the seized goods of the Petitioner, in respect of which the Petitioner has paid customs duty as assessed, without issuing a SCN within the mandatory time limit in terms of Section 110 (2) of the CA, is unlawful. The Court accordingly directs that the goods seized shall be released unconditionally to the Petitioner immediately and in any event not later than two weeks from today. However, this will not preclude the Department from proceeding to take any further action as permissible to it in law including proceeding against the Petitioner under Section 124 of the CA. - Petition disposed of

Summary

Issues:
1. Non-issuance of show cause notice (SCN) within the prescribed time limit under Section 110(2) of the Customs Act, 1962.
2. Seizure and non-release of imported goods against the Bill of Entry.

Analysis:
1. The petition sought a direction to release goods imported against a Bill of Entry seized under a panchnama. The petitioner argued that no SCN had been issued within the required six months of seizure, and no extension order for the SCN period had been passed by the authorities. Despite more than a year passing since the seizure, no SCN was issued. The Court declined further time for the Respondents to obtain instructions due to the extended delay. The Respondents' failure to issue the SCN within the stipulated time was a crucial point of contention.

2. The imported goods, New Radial Car tyres, were seized on 2nd March 2015, following a discrepancy in the declaration of the goods. The Petitioner had filed a Bill of Entry for home consumption, paying the assessed customs duty. However, the goods were not cleared, and a panchnama indicated mis-declaration of some tyres. The Respondents did not grant provisional release despite requests, leading to the issuance of a show cause notice in August 2015. The Petitioner contended that the SCN issued was not the mandatory one under Section 110(2) but a request to extend the time for issuing the SCN. The Court found the delay in issuing the SCN to be unlawful, ordering the unconditional release of the seized goods within two weeks, while allowing further legal actions under Section 124 of the Customs Act.

3. The Court referenced previous decisions to support its ruling, emphasizing the unlawfulness of the Customs Department's action in withholding goods beyond the statutory time limit for issuing the SCN. Despite pending appeals, the Court's decision was based on the lack of a stay by the Supreme Court on previous judgments. The judgment highlighted the importance of adherence to legal time limits and directed the immediate release of the goods to the Petitioner, allowing for future legal actions within the bounds of the law.