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TMI Blog2016 (7) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner, it is not possible to accept the plea of Mr. Agarwala, learned counsel for the DRI, that the 'detention' of the goods by the DRI was with the authority of law and in any event should be treated as a seizure in terms of Section 110(1) of the Act. The net result is that the detention by the DRI of the goods imported by the Petitioner under the aforementioned B/E from 13th May, 2016 onwards is entirely without the authority of law. . The Customs will proceed to inspect the goods and assess the B/E. In other words, the grant of NOC by the DRI to the further course of action to be taken by the Customs has to be presumed. At the time of assessing the B/E, however, the concerns expressed by the DRI, as set out in para 13, 14 and 15 of the affidavit of Mr.. S.K. Mishra, will be kept in view by the Customs. Once the B/E is assessed and the duty, as assessed is paid by the Petitioner, the goods will be released to it subject to whatever conditions the Customs might want to impose for such release. - Decided in favor of petitioner. - W.P.(C) 5939/2016 - - - Dated:- 25-7-2016 - S. MURALIDHAR NAJMI WAZIRI JJ. Petitioner Through: Mr.s. Anjali J. Manish and Mr.. Priya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire panchnama as well as for the release of the goods, but did not receive any response. A letter dated 28th June, 2016 was addressed by the counsel for the Petitioner to the DRI and as well as the Customs making the same request. The Petitioner also requested to the DRI that its letter dated 28th June, 2016 be treated as an application under Section 110A of the Customs Act, 1962 ( Act ), for provisional release of the goods in case the goods had been seized. Aggrieved by the continued inaction of the Respondents, the present petition is filed. 5. Notice was issued in the petition to the Respondents on 13th July, 2016. On behalf of Mr.. Satish Aggarwala, notice was accepted for the DRI. He was asked to obtain instructions on the next date of hearing. 6. An affidavit in response to the notice was filed by Mr.. S.K. Mishra, Sr. Intelligence Officer, DRI where, inter alia, he stated that a specific information was received that some Delhi based importing firms were indulging in import of high value electronics items, branded mobile phones and mobile accessories by misdeclaring the value and quantity, thus resorting to evasion of customs duties. It was stated that the DRI off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D WIFI cameras and 1 piece 4 Chanel WIFI NVR were recovered. Although, it was stated that on the completion of the panchnama, the DRI handed over a copy thereof to a representative of the CHA company, this has been denied by the Petitioner, who maintained that only Annexure C was handed over. 10. It appears that thereafter on 14th June 2016, that is more than a month after the detention of the goods, summons were issued to the importer to appear before the DRI on 21st June 2016 and to produce the relevant documents and bank statements. It is acknowledged that on 28th June 2016 the importer made a representation for provisional release of the goods. A statement appears to have been recorded of one Mr.. Siddharth Sharma on behalf of the importer under Section 108 of the Act on 5th July, 2016. He appears to have submitted a bank account statement, copies of the sales invoice running to 91 pages and import documents running to 266 pages. 11. Pursuant to the order passed by the Court, the original file was produced by Mr. Satish Agarwala, learned Counsel appearing for the DRI before the Court on 21st July, 2016. The order passed by the Court on that date noted what was found in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods under Section 110(1) of the Act, there is no question of the Petitioner seeking provisional release of such goods under Section 110-A of the Act. 5. The affidavit of Mr. S.K. Mishra also reveals that the goods stand warehoused under Section 49 of the Act since 8th July, 2016. The question arises as to who is responsible for paying the warehousing charges since clearly the Petitioner cannot be faulted for the unauthorised detention of the goods. 6. A further question that arises is regarding the nature of the goods in question. These are stated to be wrist watches of various makes and in terms of notification number 31/86-Customs dated 05th February, 1986 such goods have been notified to be of a perishable nature. They have to be dealt with in the manner indicated in Section 110(1A) and (1B) of the Act. The very objective of these provisions is to ensure that such perishable goods do not remain seized for a long period. The language used in Section 110(1A) is that the goods should be disposed of as soon as may be after its seizure . 7. Ms. Anjali Manish, learned counsel for the Petitioner submits that what has been filed is a Bill of Entry (B/E) at the first c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Petitioner, that there was no concept of detention of goods under Section 110 of the Act. Referring to the decisions in Mapsa Tapes Pvt. Ltd. v. Union of India 2006 (201) E.L.T. 7 (P H), Om Udyog v. Union of India 2010 (254) E.L.T. 547 (P H) and Baboo Ram Hari Chand v. Union of India 2014 (304) E.L.T. 371 (Guj.) she submitted that the recording of reasons prior to the making a seizure under Section 110(1) of the Act was a sine qua non to justify a valid seizure of imported goods. 15. Mr. Rai, appearing for the Customs, submitted that there could be certain instances where examination of goods cannot take place immediately upon their arrival and this might require the goods to be detained for a short or a temporary period, though he was unable to specify what constituted either a short or a temporary period. According to him, there may be instances where the DRI, acting on intelligence, proceeds to intercept the goods with prior intimation to the Customs. In response to a specific query as to who would bear the demurrage or the warehouse charges in the event of such detention , Mr. Rai said that where the detention was only for a short period and ultimately the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n taken under Section 105 of the Act. 20. Even the decision in S.J. Fabrics Pvt. Ltd. v. Union of India (supra) does not suggest that the proceedings under Section 110(1) of the Act is not to be followed. The above observations in para 6 of the decision are relevant in the context of the computation of the period of limitation for the purposes of issuance of the show cause notice under Section 124(a) of the Act. The said decision does not suggest that for effecting a seizure under Section 110(1) of the Act, no order is required to be passed by the proper officer. 21. None of the above decisions is an authority for the proposition sought to be advanced by Mr.. Agarwala that detention and seizure is one and the same thing. On the contrary, the decisions of the Punjab Haryana High Court referred to by learned counsel for the Petitioner hold to the contrary. Both in Mapsa Tapes Pvt. Ltd. v. Union of India (supra) and Om Udyog v. Union of India (supra) the High Court was concerned with the similar situation of detention of the goods without recording reasons to believe that seizure of the goods was warranted under Section 110(1) of the Act. The following discussion in Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion of India (supra), in similar circumstances, the Court directed immediate release of the goods since the Department had not shown prima facie case for exercise of powers of confiscation and has only relied upon existence of power . The Gujarat High Court in Baboo Ram Hari Chand v. Union of India (supra) negatived the plea of the Department that seizure and confiscation were one and same thing. In that case the panchnama was projected as the seizure order. The Court observed that such composite order is unheard of . It further observed: 27. Technically, asking the party to submit fresh PD Bonds for a period of six months on one hand and proceeding to seize the goods on the other hand may not perhaps be faulted with, however, burden lies on the authority to explain rationale to rush into seizure/ confiscation of the goods in such circumstances, the reason is the proper officer cannot proceed to seize the goods under Section 110 of the Act unless he has reason to believe. The authority would exercise drastic powers to seize the goods only in case wherein it has reason to believe that the goods is liable to be confiscated. The powers to seize and the power to confisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of assessing the B/E, however, the concerns expressed by the DRI, as set out in para 13, 14 and 15 of the affidavit of Mr.. S.K. Mishra, will be kept in view by the Customs. Once the B/E is assessed and the duty, as assessed is paid by the Petitioner, the goods will be released to it subject to whatever conditions the Customs might want to impose for such release. 28. The entire exercise of inspecting the goods and the consequential assessment of the B/E be completed by the Customs within a period of two weeks from today. It is made clear that the Petitioner cannot be saddled with the warehouse charges as it has happened entirely due to the illegal action of the DRI. In other words, the Petitioner cannot be asked to bear the warehousing expenses. It will be for the DRI to bear the responsibility in this regard. 29. For appropriate coordination in such circumstances in future between the DRI and the Customs Department, and to ensure that there is no such indefinite detention of the goods without the authority of law, a detailed set of instructions needs to be issued by the Customs in consultation with the CBEC. 30. With the aforesaid observations, the writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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