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2024 (1) TMI 538 - HC - CustomsValidity of show cause notice - Jurisdiction - power of DRI to issue SCN - Attachment of Bank Accounts of petitioner - Diversion of duty-free imported gold under the Advance Authorization Scheme - HELD THAT - In terms of Section 110(5) of the Customs Act, the attachment of the bank account cannot continue beyond the period of six months, the same can be extended by another period of six months in terms of proviso to Section 110(5). The petitioner s bank accounts were initially attached from 20.08.2020 till 20.02.2021. The attachment was extended in relation to one bank account in Yes Bank till 20.08.2021. The order of attachment of bank accounts, thus, has ceased to be operative with efflux of time, and therefore, no order is required to be passed in regard to the prayer seeking defreezing of the bank accounts of the petitioner. There is prima facie some merit in the arguments advanced by the learned counsel for the petitioner that 53 kg gold bars, at the time of detention, were found in the declared premises and, thus, could not have been seized. The said gold was cleared from customs in late hours of 13.08.2020. The said gold was safely kept by the principal officers of the petitioner company. The gold could not be brought inside the declared premises because a search was being conducted during the relevant time on 13.08.2020 / 14.08.2020. However, it was brought inside immediately thereafter. At this stage, it is not relevant to consider whether the petitioner would ultimately succeed. The arguments raised require adjudication of facts - Whether the allegations would conclusively prove case against the assessee is not material. The same is in the realm of subjective satisfaction, which at this stage, cannot be said to be unfounded. Any such adjudication by this Court would amount to adjudicating the Show Cause Notice dated 11.08.2021. The adjudication of some of the issues raised would necessarily involve addressing disputed questions of fact and it would not be apposite to do so in these proceedings. Unless the High Court is fully satisfied that the show cause notice is ex facie without jurisdiction, a writ petition should not be entertained - In the present case, admittedly the contentions advanced can be urged before the Adjudicating Authority. It is a settled law that the statutory fora are empowered to adjudicate not only the factual aspects, but also the issues in relation to their jurisdiction and other legal aspects. The Gold, in relation to which the petitioner is seeking revalidation / extension of the period of export is lying seized with the respondents pending adjudication of the Show Cause Notice dated 11.08.2021. The petitioner would be at liberty to apply for any such extension/ revalidation of the Advance Authorisation licence after the adjudication of the Show Cause Notice dated 11.08.2021. As and when any such application is filed, the DGFT shall consider the same in accordance with law, keeping in mind the peculiar facts of the case, as the petitioner is contesting Respondent no. 2 s power to seize the gold and has been effectively prevented from exporting the same. The DGFT shall also consider the petitioner s request for waiver or relaxation of the composition fee. This Court does not consider it apposite to pass any direction for quashing of the Seizure Order dated 28.12.2020, whereby the gold was seized - Petition disposed off.
Issues Involved:
1. Legality of the detention and seizure of 53 kg gold. 2. Freezing of the petitioner's bank accounts. 3. Extension of the period for issuance of Show Cause Notice. 4. Jurisdiction of DRI, Noida. 5. Revalidation/extension of the petitioner's license by DGFT. Summary: 1. Legality of the Detention and Seizure of 53 kg Gold: The petitioner argued that the detention and subsequent seizure of 53 kg of legally imported gold by the Directorate of Revenue Intelligence (DRI) was without jurisdiction and contrary to the Customs Act. The petitioner contended that once goods are cleared by customs, they cease to be "imported goods" and cannot be seized. The Court agreed that Section 110 of the Customs Act does not empower the detention of goods without an order of seizure. However, the Court noted that the Seizure Order dated 22.12.2020 recorded categorical reasons for the seizure, indicating that the gold was kept outside the declared premises with the intention of diversion. The Court concluded that the issue should be adjudicated by the appropriate authority. 2. Freezing of the Petitioner's Bank Accounts: The Court observed that the attachment of the petitioner's bank accounts had ceased to be operative due to the efflux of time. Therefore, no order was required to be passed regarding the defreezing of the bank accounts. 3. Extension of the Period for Issuance of Show Cause Notice: The petitioner argued that the extension of time for issuing the Show Cause Notice was not permissible without a prior hearing. The Court noted that the proviso to Section 110(2) of the Customs Act, as amended, requires the authorities to inform the person from whom the goods were seized before the expiry of the period if any order for extension is passed. The Court found that the appropriate authority had recorded reasons for the extension and communicated the same to the petitioner. Therefore, the extension was held valid. 4. Jurisdiction of DRI, Noida: The petitioner contended that DRI, Noida, lacked the territorial jurisdiction to pass the Seizure Order. The Court noted that the DRI officers have all-India jurisdiction as per the relevant notifications. The issue of whether DRI officers are "Proper Officers" under Section 110 of the Customs Act is pending before the Supreme Court. The Court refrained from deciding this issue in the present petition. 5. Revalidation/Extension of the Petitioner's License by DGFT: The Court noted that the DGFT had affirmed that no application for revalidation of the petitioner's license was pending and that any such application would be decided as per policies and procedures uninfluenced by the DRI's recommendations. The petitioner was granted liberty to apply for revalidation/extension of the license after the adjudication of the Show Cause Notice. The DGFT was directed to consider any such application in accordance with the law, considering the peculiar facts of the case. Conclusion: The Court disposed of the writ petition, directing that the issues related to the seizure of gold and the jurisdiction of DRI should be adjudicated by the appropriate authority. The petitioner was allowed to apply for provisional release of the gold and revalidation/extension of the license post-adjudication.
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