2020 (10) TMI 973 - HC - Customs

Smuggling - Betel Nuts - reasons to believe - contention of the learned counsel for the petitioner is that the petitioner received an order from one M/s Saurabh Traders for purchase of ''betel nuts' and the petitioner purchased the ''betel nuts' from the local market and send the goods to the said M/s Saurabh Traders through the transporter Nahata Transport - HELD THAT - This Court held that the reasons to believe which are a sine-qua-non for exercising the powers under Section 110 of the Customs Act should be based upon acceptable materials and should be more than a moon shine. The reasons to believe based upon prima facie examination of goods by naked eye, opinion of the local traders as well as the inscriptions on some of the bags were not held to be a valid reasons to believe for exercising the powers under Section 110 of the Customs Act. The Court also considered the instructions in Instruction No. 1/2017 and after considering the facts has quashed the seizure order. In the present case also the Panchnama, which is stated to be the seizure order, is based upon only three factors namely, prima facie examination of goods, opinion of the local traders as well as inscriptions on some of the bags. Once this Court has held the said reasons to be not adequate for exercising of power under Section 110 of the Customs Act, the seizure order in the present case is also liable to be quashed Petition allowed.

Summary

Issues:
Challenge to Panchnama dated 21.7.2020 and order dated 31.7.2020 for provisional release of seized goods.

Analysis:
The writ petition challenged the Panchnama dated 21.7.2020 seizing goods and a vehicle, along with the order dated 31.7.2020 for provisional release of goods with specific conditions. The petitioner's counsel clarified the petition pertained to only one petitioner. The petitioner claimed to have purchased betel nuts locally for a buyer and transported them with proper documentation. However, upon entering Uttar Pradesh, authorities seized the goods and the vehicle, alleging the betel nuts were of foreign origin based on inscriptions and local dealers' opinions. The petitioner contended the seizure was arbitrary and lacked legal basis.

The counsel argued that the "reasons to believe" for seizure were unfounded, echoing arguments from a previous case. The respondents contended the petition should be dismissed due to the availability of an appeal for the provisional release order. Referring to a prior judgment, the Court emphasized that reasons to believe under Section 110 of the Customs Act must be substantiated and not merely speculative. Relying on visual inspection and local traders' opinions was deemed insufficient. Citing Instruction No. 1/2017, the Court quashed the seizure order in the previous case.

Similarly, in the present case, the Court found the Panchnama's basis for seizure inadequate, mirroring the reasoning in the previous judgment. Consequently, the Court allowed the writ petition, setting aside the Panchnama dated 21.7.2020 and directing the immediate return of the seized goods to the petitioner. As the seizure order was quashed, no specific orders were issued regarding the provisional release order. The Court instructed the official website's order copy to be considered a certified copy for all purposes.