1986 (2) TMI 68 - HC - Customs

Summary

Issues Involved:
1. Seizure and confiscation of goods under the Customs Act, 1962.
2. Compliance with Section 110(2) of the Customs Act regarding the issuance of show cause notice within six months.
3. The applicability of Section 119 of the Customs Act.
4. The petitioner's entitlement to the return of seized goods.

Issue-wise Detailed Analysis:

1. Seizure and Confiscation of Goods under the Customs Act, 1962:
The petitioner was involved in two separate incidents where goods were seized by the Customs Department. In the first case, the Customs Department received information on 11th May 1983 that 79 packages, declared as handloom cotton coloured towels, contained snake skins. Upon inspection, 38 cases were found to contain 84,000 pieces of snake skins, a banned item for export under the Exports (Control) Order, 1977. Consequently, the goods were liable to confiscation under Section 113(d) of the Customs Act, 1962, and attracted penalties under Section 114. In the second case, on 27th April 1984, 27 cases declared as paper elephants were found to contain 30,925 pieces of snake skins. The petitioner was linked to these goods through various pieces of evidence, including statements from individuals and the petitioner's involvement in the packing and transportation of the goods.

2. Compliance with Section 110(2) of the Customs Act:
The petitioner argued that under Section 110(2) of the Customs Act, if a show cause notice is not issued within six months of the seizure of goods, the goods must be returned to the person from whose possession they were seized. The Customs Department contended that the goods were merely detained for examination and not seized, thus Section 110 did not apply. However, the court held that the goods were indeed seized, not merely detained, and the procedure under Section 110(2) should have been followed. The failure to issue a show cause notice within the stipulated time entailed the return of the goods to the petitioner.

3. Applicability of Section 119 of the Customs Act:
The Customs Department argued that Section 119, which deals with the confiscation of goods used for concealing smuggled items, applied to this case. However, the court noted that no notice had been issued under Section 119, and thus it could not be used to justify the confiscation. The court emphasized that the proper procedure, including issuing a show cause notice, must be followed for any confiscation to be valid.

4. Petitioner's Entitlement to the Return of Seized Goods:
In the first case, the petitioner had written a letter on 14th May 1983 disclaiming ownership of the snake skins and alleging that the goods had been tampered with after being handed over to the clearing agents. The court found this disclaimer significant and ruled that the petitioner was not entitled to the return of the snake skins. However, the petitioner was entitled to the return of the handloom cotton coloured towels that were still in the possession of the Customs Department. In the second case, there was no disclaimer, and the petitioner was entitled to the return of the 30,925 pieces of snake skins and the three cases of paper elephants.

Conclusion:
The court directed the Customs Department to return the six packages of handloom cotton coloured towels and the three cases of paper elephants to the petitioner. However, the petitioner was not entitled to the return of the snake skins due to the disclaimer of ownership. The writ petitions were allowed to the extent indicated, with no costs awarded.