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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 ..... 16. A further prayer is for the direction to the Respondents to provide to the Petitioner a copy of the panchnama dated 12/13th May, 2016 which makes reference to the above B/E. 2. The brief facts are that, the Petitioner is engaged in the business of import of mobile accessories. It is stated that, in the normal course of its business, the Petitioner placed an order for importing unbranded mobile accessories, parts, memory card adaptor, plastic watches, tempered glass and mobile phone LCD on its foreign supplier M/s Micsun Import and Export Private Limited for USD 15,649.19 by way of invoice dated 11th April, 2016. According to the Petitioner, the goods were dispatched through air by Airway bill (AWB) dated 25th April, 2016. On arrival of the goods, the Petitioner filed the aforementioned B/E for home consumption. The assessable value was declared as Rs. 10,61,351.54/- and the duty payable as Rs. 2,63,494/-. 3. It is stated that the Petitioner filed the B/E under first check so that the Customs could itself verify the contents and indicate the duty to be paid. The Petitioner states that the goods were examined on 12th May, 2016 by the DRI in the presence of two panch witnesses w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a panchnama drawn on 12/13th May, 2016 in the presence of the two independent witnesses, a representative of CELEBI (the custodian of goods), a representative of the CHA firm M/s Dex Logistics Pvt. Ltd. (DLPL) and the Customs officials. It was stated that on examination of the documents submitted by the CHA, it was noted that the IGM No. 936163 had mentioned the AWB date as 28th April 2016, whereas in the B/E the date of the AWB was 25th April, 2016. The suspicion was that the CHA was trying to mislead the DRI officials that the goods had arrived after the alert dated 26th Aril, 2016. It was stated that the detailed inventory was prepared and it was noticed that the consignment included high value goods such as branded wrist watches covered under Section 123 of the Act, branded Bluetooth stereo headsets, HD WIFI camera etc., and that these had not been mentioned in the invoice presented by the importer. 9. It was further stated by the DRI that the importer had declared 4040 pieces of plastic watches (unbranded), whereas 5400 pieces of Chinese as well as branded watches were recovered. It was stated that there were discrepancies in the description as well as quantities in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the panchnama is that it states that "the above said goods were detained by the DRI Officers under Section 110 of the Customs Act, 1962 being relevant to the investigation being conducted by them". The above statement by the two panch witnesses cannot be, as is sought to be contended by Mr. Agarwala, taken to be an order passed by the proper officer under Section 110(1) of the Customs Act, 1962 ("Act") seizing the goods in question. In the first place, there is no such order signed by the proper officer in terms of Section 110(1) of the Act in the file. Secondly, the word used in the panchnama is "detained" and not "seized". It is, therefore, not possible to accept a statement made at the Bar by Mr. Agarwala that the Court should proceed on the basis that the goods in question have been seized by the DRI under Section 110 of the Act. 4. Significantly, in the counter affidavit filed by Mr.. S.K. Mishra, on behalf of the DRI, there is no statement to the effect that the goods have been seized under Section 110 of the Act. What is stated in para 6 therein is that the goods "were detained under proper Panchnamas drawn on the spot". It is not possible for the Court to accept the pan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l practical purposes the detention of the goods should be treated as 'seizure' under Section 110 of the Act. In particular, he drew attention to the following observations in para 6 of the above decision: "6. From the aforesaid averment, it is clear that although no specific order of seizure has been issued to the writpetitioner, it is apparent that there has been actual detention of the goods under Section 110 of the Act and time will run for giving show-cause notice under Section 124(a) from at least 4th August, 2010. It further appears that already summons in terms of Section 108 of the Act has been issued to the writ-petitioner and he is being examined and thus, it necessarily follows that there has been seizure of the goods in terms of Section 110 of the Act and the writ-petitioner has been summoned in connection with the investigation" 13. Further, on the strength of the decision in R.S. Seth Gopikisan Agarwal v. R.N. Sen, Asstt. Collector of Customs and Central Excise, Raipur 1983 (13) E.L.T. 1434 (S.C.) Mr.. Agarwala sought to contend that there was no requirement for recording of reasons before making a seizure. Although, the said decision was in the context of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcept with the previous permission of such officer". 18. In the present case, as already noted, no order was served on the owner of the goods in terms of proviso to Section 110(1) of the Act. What the panchnama talks of is the custodian being told by the DRI not to remove, part with or otherwise deal with the goods. Clearly, therefore, no action was proposed and, in fact, taken in terms of the proviso to Section 110(1) of the Act, which is the only exception to not immediately seizing the goods. It appears to be imperative that if the proper officer decides to seize the goods, then he must record first reasons to believe that such goods are liable to be confiscation under the Act. 19. In R.S. Seth Gopikisan Agarwal (supra) the Supreme Court discussed Section 105 of the Act dealing with search and not Section 110 of the Act which deals with seizure. In any event, even the Supreme Court did not suggest that no reasons at all are required to be given for a search undertaken under Section 105 of the Act. In para 7 the Supreme Court observed that the Customs Officer "doubtless" has to indicate "broadly the nature of the documents and the goods in regard to which the officer authorized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the date of seizure and important aspect of the matter is that the goods were cleared under Section 47 of the Act after the above report was available with DRI. Further, undisputed allegations of the petitioners are that even after the clearance of the consignment, seizure of which is in question, in the present petition a number of consignments were cleared by the respondents under Section 47 of the Act under similar circumstances. 25. We are of the view that while existence power of seizure may be justified but its exercise will be liable to be struck down unless 'reasons to believe' were duly recorded before action of search and seizure is taken, which has not been done in the present case because the respondents have not been able to satisfy the court that due process of law was followed while taking drastic step of search and seizure in the case of the petitioner. On this ground alone, we are of the view that action of search and seizure is liable to be quashed and accordingly we answer the second issue in favour of the petitioner and against the revenue. 26. Before parting with the judgment, we make it clear that we are not going into question of alleged liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of law and in any event should be treated as a seizure in terms of Section 110(1) of the Act. 24. 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. 25. The question that next arises is, what should be the consequential direction that has to be issued in the matter? As already pointed out by the learned counsel for the Petitioner, the B/E has been presented as a first check B/E. The Customs has not even examined the goods and assessed the B/E. Therefore, it is imperative that the Customs should now proceed with further steps in the matter. 26. At this stage, it is pointed out by Mr. Rai, learned Counsel for the Customs, that unless the DRI issues a No-Objection Certificate (NOC) for the release of the goods, they cannot take further steps in the matter. 27. Since the Court has already held that the detention of the goods by the DRI in the customs warehouse is entirely without the authority of law, the Customs will now proceed with the further steps in the matter on the basis that there is a No-Objection granted by the DRI. The Customs will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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