2024 (8) TMI 1066 - HC - Customs

Time limitation for issuance of SCN - whether the Show Cause Notice was issued within the period of time prescribed under section 110 (2) of the Customs Act, 1962 and what will be the consequence if the SCN was not issued within the limited period prescribed under the aforesaid Act? HELD THAT - Section 110 (1) of the Customs Act, 1962 empowers a proper officer of the Customs to seize any goods if he has reason to believe that any such goods are liable to confiscation under the Act. Under section 110 (2) of the said Act, it is, inter alia, provided that where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. In the present case, it is an admitted fact that gold jewelleries were seized from the petitioners on 23-02-2024 and the Show Cause Notice under section 124 of the Customs Act was dispatched only on 25-08-2023 through speed post for delivery to the petitioners. If the period of six months as provided under section 110 (2) of the Act is to be reckoned from 23-02-2023, the period of six months will lapsed on 22/23-08-2023 - this court has no hesitation to hold that the Show Cause Notice dated 17-08-2023 was not given within the period of six months prescribed under section 110 (2) of the Customs Act, 1962 and consequently, this court is of the considered view that the retention of the seized gold jewelleries by the Customs officials is illegal as being violative of the provisions of section 110 (2) of the Customs Act. This court held that the objection raised by the learned counsel appearing for the respondents is misconceived and not tenable - the present writ petition is allowed by directing the respondents to release forthwith the seized gold jewelleries to the concerned petitioners.

Summary

Issues:
1. Seizure of gold jewelleries under Customs Act, 1962.
2. Delay in issuing Show Cause Notice (SCN) within the prescribed period.
3. Legal rights of petitioners under section 110 (2) of the Customs Act.
4. Jurisdiction of the court in ordering the release of seized goods.
5. Maintainability of the writ petition without resorting to statutory appeal provisions.

Analysis:

The petitioners filed a writ petition seeking a writ of Mandamus to direct the return of gold jewelleries seized by Customs officials under section 110 of the Customs Act, 1962. The jewelleries were seized during a security check at Imphal International Airport. A Show Cause Notice (SCN) was issued after six months, leading to the petitioners' request for release, which was denied. The petitioners argued that the failure to return the jewelleries violated their rights under section 110 (2) of the Act and their Fundamental Right to Equality under Article 14 of the Constitution of India.

The respondents contended that the delay in issuing the SCN was due to procedural issues and external factors like technical glitches and curfew. They also raised objections to the writ petition's maintainability, citing the availability of statutory appeal options under the Customs Act.

The court considered the provisions of sections 110, 124, and 153 of the Customs Act. It noted that the SCN should have been issued within six months of the seizure under section 110 (2) and that failure to do so would require the return of the seized goods to the owner. As the SCN was dispatched after the prescribed period, the court held the retention of jewelleries by Customs officials illegal.

Regarding the maintainability of the writ petition, the court ruled that since no confiscation order or penalty had been imposed, there was no need for a statutory appeal. Thus, the objection raised by the respondents was dismissed, and the court directed the immediate release of the seized gold jewelleries to the petitioners. The writ petition was allowed, and no costs were imposed on either party.