2018 (1) TMI 925 - HC - Customs

Power of seizure of goods - provisional release of seized goods - Held that - when the investigations are underway, we should not interfere. Secondly, these investigations are in relation to certain consignments and which have been dubbed to be not of Sri Lankan origin. The power of investigation and the power to seize the goods upon such investigation and further power to issue a seizure memo is not at all questioned. The goods obviously are lying in the port and incurring and inviting several charges, including detention charges as complained. The investigations are going to take some more time as is revealed in the affidavit because the investigating machinery under the Customs Act would have to route its request to conduct and complete proper investigation through several Ministries of Government of India and which would then authorise the officials either to visit Sri Lanka or to summon more material or documents from Sri Lanka and Indonesia. For that, procedural formalities have to be completed. No useful purpose will be served by allowing the goods to be detained and when samples have already been drawn. Goods to be released on petitioner executing the Bond and Bank Guarantee - petition disposed off.

Summary

Issues:
Challenge to Seizure Memorandum and Provisional Release Order under Article 226 of the Constitution of India.

Detailed Analysis:
1. The petitioner challenged a Seizure Memorandum and Provisional Release Order. The petitioner argued that the power of seizure was unjust as the goods were of Sri Lankan origin, benefiting from a Free Trade Agreement. The petitioner contended that the authorities acted unfairly, violating Article 14 of the Constitution.

2. The petitioner emphasized the certificates from Sri Lankan authorities confirming the goods' origin and the terms of the Free Trade Agreement. The petitioner relied on past judgments and annexures to support their claim of unfair seizure and imposition of unreasonable conditions for release.

3. On the contrary, the respondents argued that there was material suggesting the goods were not of Sri Lankan origin but were from Indonesia. They claimed the goods were falsely labeled to evade duty, justifying the seizure and conditions for release.

4. The Court noted ongoing investigations and the need to balance rights and equities. The Court proposed a resolution where the petitioner would execute a bond and provide a bank guarantee to secure the duty demand partially. This resolution aimed to address concerns of both parties while ensuring justice.

5. The Court's decision allowed for the release of goods upon the petitioner meeting specified conditions, without expressing an opinion on the legality of the seizure. The Court clarified that the resolution did not impact the parties' rights and contentions, leaving those issues open for future consideration.

6. The judgment concluded by disposing of the petition with the provided directions, maintaining neutrality on the disputed issues and emphasizing the importance of securing duty payments while ensuring fairness in the resolution.