2023 (5) TMI 619 - HC - Customs

Disposal of the seized goods - Non-issuance of SCN - Conclusion of proceedings under Section 110(1D) of the Customs Act, without issuance of SCN - violation of principles of natural justice or not - HELD THAT - With the introduction of Sub-section (1D) in Section 110 of the Customs Act, Commissioner (Appeals) was specified as the concerned authority in respect of seized gold in any form. The proper officer is now required to make an application to the Commissioner (Appeals) having jurisdiction instead of the Magistrate under Sub-section (1B) in respect of gold in any form, which is seized under Section 110(1) of the Customs Act. In ISHWAR PARASRAM PUNJABI VERSUS UNION OF INDIA 1989 (10) TMI 62 - HIGH COURT OF DELHI , this Court had, inter alia, considered the question whether notice of proceeding under Section 110(1B) of the Customs Act was required to be issued to the owner or the persons from whom the goods were seized. In that case, the Court had rejected the Revenue s contention that no notice of proceedings under sub-section (1B) was required to be issued as neither Sub-section (1B) nor Sub-section (1C) of Section 110 of the Customs Act mandated issuance of any such notice to be served to the owner or the person from whom the goods are seized. In PRADEEP KHANDELWAL VERSUS COMMISSIONER OF CUSTOMS (APPEALS) ANR. 2022 (4) TMI 1529 - DELHI HIGH COURT , this Court held that In an exercise of this nature, the law would oblige adherence to principals of natural justice i.e. notice and participation in the exercise especially given the fact that there is no express exclusion in the Act. There are no merit in the contention that no notice is required to be served of the proceedings under Section 110(1D) of the Customs Act. As noted above, Sub-section (1D) of Section 110 of the Customs Act was introduced to substitute the authority before whom an application for certifying the correctness of the inventory; taking photographs of the seized goods; and drawing representative samples is required to be made. In respect of seized gold, the proper officer is required to make an application before the Commissioner (Appeals) having jurisdiction instead of the Magistrate as required under Sub-section (1B) to Section 110 of the Customs Act. Although the authority before whom an application is to be made was substituted, there was no amendment in the procedure to be followed. Thus, the decision in the case of Ishwar Parasram Punjabi v. Union of India applies equally to proceedings under Section 110(1D) of the Customs Act. Although the petitioner is entitled to insist that the proceedings under Section 110(1D) of the Customs Act be conducted de novo as directed by the Court in the case of Pradeep Khandelwal v. Commissioner of Customs (Appeals) Anr. no such orders are warranted in this case as the goods in question have already been sold. Petition disposed off.

Summary

Issues Involved:
1. Issuance of notice under Section 110(1D) of the Customs Act.
2. Validity of the proceedings conducted under Section 110(1D) without notice.
3. Interpretation of Section 110(1D) in light of principles of natural justice.

Summary:

1. Issuance of notice under Section 110(1D) of the Customs Act:
The petitioner challenged the proceedings under Section 110(1D) of the Customs Act, 1962, conducted by the Commissioner of Customs (Appeals) without issuing any notice to the petitioner. The petitioner argued that, as per the decision in *Pradeep Khandelwal v. Commissioner of Customs (Appeals) & Anr.*, notice was required to be issued to the person from whom the goods were seized.

2. Validity of the proceedings conducted under Section 110(1D) without notice:
The Court noted that the respondents returned four gold bars seized on 20.02.2021, but retained one gold bar weighing 1000 grams. The proceedings under Section 110(1D) were conducted on 21.11.2022, and the inventory was certified without notice to the petitioner. The respondents argued that Section 110(1D) does not mandate issuing notice to the person from whom goods are seized. The Court found no infirmity in the notice dated 25.11.2022 issued under Section 150 of the Customs Act and concluded that the relief sought by the petitioner could not be granted as the gold bar in question had already been disposed of.

3. Interpretation of Section 110(1D) in light of principles of natural justice:
The Court examined the requirement of notice under Section 110(1D) of the Customs Act in light of principles of natural justice. It referred to the decision in *Ishwar Parasram Punjabi v. Union of India*, where it was held that the preparation of inventory or other steps under Section 110(1B) required notice to the person from whom goods were seized. The Court reiterated that the principles of natural justice necessitate notice and participation in such proceedings, even if not expressly mentioned in the statute. The decision in *Pradeep Khandelwal* was upheld as a binding precedent, emphasizing that the substitution of the authority (from Magistrate to Commissioner (Appeals)) did not alter the procedural requirement of issuing notice.

Conclusion:
The Court concluded that although the petitioner was entitled to insist on de novo proceedings under Section 110(1D) as per the *Pradeep Khandelwal* decision, no such orders were warranted since the goods had already been sold. The petition was disposed of with these observations, and the pending application was also disposed of.