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TMI Blog2020 (1) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of Bihar. On 6th of February, 2019, Inspector/S.O., Customs (P), Forbesganj seized the said goods and the vehicle by assigning the reasons reproduced supra. After drawing samples, vide punchnama dated 6th of February, 2019, Annexure-A to the counter affidavit, they were sent to the laboratory for analysis - The customs authorities sent the samples for analysis to two laboratories. The Expert as per the report used the word suspect . Based thereupon, petitioners request for release of the seized goods was rejected. The Single Judge have heavily relied upon the contents of the affidavit filed by the Revenue, wherein it stood averred that the Areca Nuts of Indian origin are normally oval in shape and it is this which made the Customs Officer forms a reasonable belief that cut dried Areca were illegally smuggled into India. As we have already observed that supplementation of reasons is impermissible in law, more so in the attending facts - the learned Singe Judge to have been swayed with five notifications/circulars/memorandum placed on record by the Revenue. And not having gone into the relevancy of each one of them, without assigning any reason with regard thereto, ger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorities and smuggling in relating to any goods as per subsection (39) of Section 2 means an act or omission which will render such goods liable to confiscation under section 111 or section 113. 5. Chapter IV of the Act empowers the Central Government to prohibit importation and exportation of any goods and Chapter IV-A and IV-B deal with the detection of illegally imported goods and prevention of the disposal thereof. 6. Section 111 defines the category of goods brought from a place outside India liable to be confiscated. 7. We are dealing with a case where betel nuts having its origin from a country other than India, are prohibited to be imported in India, and as such by virtue of Section 111, liable to be confiscated, i.e. the meaning of the expression liable to confiscation . But what is important and a condition precedent, sine qua non, is the belief of the officer seizing the goods of forming an opinion in terms of the statutory expression reason to believe of such goods being liable to confiscation. 8. In the instant case, goods having description Full dried Areca Nuts (round in shape and dark brown in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. It is seen that the learned Single Judge by distinguishing its earlier decision rendered in M/s Ayesha Exports Vs. The Union of India (CWJC No.7589 of 2018) dealing with the very same issue directing release of the goods on the very same set of facts, dismissed the writ petition holding that there was a report of the laboratory indicating the goods to be not fit for human consumption; that investigation would reveal as to whether the goods were liable for confiscation or not and that there are Circulars and Memorandum issued by the Government. 17. At this stage, we may point out that the endeavour of the learned Single Judge in distinguishing the judgement in M/s Ayesha Exports (supra), in relation to which SLP also stood dismissed, was adventurous, not maintaining comity of judicial consistency. (See: Sundarjas Kanyalal Bhathija and others v. The Collector, Thane, Maharashtra and others AIR 1990 SC 261). We find the learned Single Judge to have misconstrued and not fully appreciated the material on record. In fact, one of the Experts opined the product to be unfit on the basis of suspicion. We may notice that the goods were seized in Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry power and has to be exercised in accordance with the restraints imposed by law and that such belief must be that of an honest and reasonable person based upon reasonable grounds. Further, if the authority would be acting without jurisdiction or there is no existence of any material or conditions leading to the belief, it would be open for the Court to examine the same, though sufficiency of the reasons for the belief cannot be investigated. 21. In Assistant Collector of Customs Verus Charan Das Malhotra, 1971 (1) SCC 697, Shelat J., has held reasonable believe to be relevant and not extraneous. 22. In Kewal Krishan Vs. State of Punjab, AIR 1967 SC 737, Kapur J., while dealing with identical provisions has clarified that confiscatory power based on reason to believe has to be exercised only on the satisfaction based on certain objective material. 23. Earlier in Hukma v. The State of Rajasthan, AIR 1965 SC 476, Das Gupta J., clearly opined that burden of proof postulated upon the private party is based on the existence of the satisfaction of reason to believe . 24. While dealing with the expression reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failure to disclose fully and truly the facts material for assessment, the existence of the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justiciable. The expression therefore predicates that the Income Tax Officer holds the belief induced by the existence of reasons for holding such belief. It contemplates existence of reasons on which the belief is founded, and not merely a belief in the existence of reasons inducing the belief; in other words, the Income Tax Officer must on information at his disposal believe that income has been under-assessed by reason of failure fully and truly to disclose all material facts necessary for assessment. Such a belief, be it said, may not be based on mere suspicion: it must be founded upon information. (Emphasis supplied) 28. The view stands reiterated in Income-Tax Officer I Ward, District VI, Calcutta and others Versus Lakhmani Mewal Das, (1976) 3 SCC 757. 29. In Bhikhubhai Vithlabhai Patel and others versus State of Gujarat and another, (2008) 4 SCC 144, while dealing with yet another legislation, i.e. Gujarat Town Planning and Urban Development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar provision, N.P. Singh J. has opined as under:- 10. It is well-settled that if a statute requires an authority to exercise power, when such authority is satisfied that conditions exist for exercise of that power, the satisfaction has to be based on the existence of grounds mentioned in the statute. The grounds must be made out on the basis of the relevant material. If the existence of the conditions required for the exercise of the power is challenged, the courts are entitled to examine whether those conditions existed when the order was made. A person aggrieved by such action can question the satisfaction by showing that it was wholly based on irrelevant grounds and hence amounted to no satisfaction at all. In other words, the existence of the circumstances in question is open to judicial review. 31. The reason to believe as held in Sheo Nath Singh v. CIT, (1972) 3 SCC 234, cannot be basis on mere suspicion, gossip or rumour though belief on an honest basis and on reasonable grounds and the officer may act on direct or circumstantial evidence. However, if the officer were to act without any material or irrelevant, extraneous material, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Also the Customs Officer had specific information about illegal importation of foreign origin Dried Areca Nuts/ Betal Nuts , thus these kinds of shape, size and colour of Areca Nuts strengthen their belief that those Dried Areca Nuts were actually of foreign origin and were illegally imported into India. The driver could not produce any documents regarding importation of said Dried Areca Nuts. The truck along with the loaded goods (Dried Areca Nuts) were detained by the Customs Officer. (Emphasis supplied) 36. The customs authorities sent the samples for analysis to two laboratories. The Expert as per the report used the word suspect . Based thereupon, petitioners request for release of the seized goods was rejected vide communication dated 29th of March, 2019. 37. Perusing the impugned judgement, we find the Single Judge to have heavily relied upon the contents of the affidavit filed by the Revenue, wherein it stood averred that the Areca Nuts of Indian origin are normally oval in shape and it is this which made the Customs Officer forms a reasonable belief that cut dried Areca were illegally smuggled into India. As we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason with regard thereto, germane to the issue, by presuming the same to be ipso facto applicable, the learned Judge concluded the Department to have lawfully seized the goods and the vehicle. 42. Circular No.3 of 2011 purportedly issued under the provisions of the Prevention of Food Adulteration Act, 1954, does not even deal with the issue in question. Firstly, the Prevention of Food Adulteration Act or its guidelines/Rules does not authorise the Customs Officer to issue any circular or take appropriate action under the provisions of the said Act. The Customs Officers are also not empowered or authorized under the said Act or the Rules framed thereunder. Even the Food Safety and Standards Act, 2006 does not empower the officers to take any appropriate action under the said provisions. Secondly, the said Circular does not deal with the product in question. It be only observed that there is no live link or tell a tale sign of the product being of a foreign origin or having passed through a territory other than India, much less Nepal. 43. Who were those customs officers who informed the seized nuts not to be of Indian origin, as recorded in the Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Food Safety and Standards (Packaging and Labelling) Regulations, 2011 would be applicable only where the product is sold in a package with inscription of the statutory warning that chewing of Supari is injurious to health and such product complying with the Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011 which view stands affirmed by co-ordinate bench of this Court in LPA No.1186 of 2018, titled as The Union of India Ors. Vs. Salsar Transport Company Anr. decided on 25.11.2013. 49. We find no reason to take a contrary view, more so, when the goods in question are yet raw, as an unfinished product, meant to be transported to another State for it to be processed and packaged, whereafter, only, eventually sold in an open market and if the goods are actually unsafe food then it is not the provision of the Customs Act which can be invoked, for not falling within its purview. 50. Thus, in view of our aforesaid discussions, we set aside the judgement dated 05.09.2019 passed in CWJC No.6563 of 2019 titled as M/s. Ramesh Kumar Baid and Sons (HUF) anr. Versus the Union of India Ors. by a learned Single Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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