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TMI Blog2025 (2) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of conveyance, confiscation of goods used for concealing smuggled goods, adjudication of confiscations and penalties and adjudication procedure. The learned co-ordinate Bench In case of Assam Supari Traders [2024 (9) TMI 1617 - PATNA HIGH COURT] held that what has been assigned as reason for seizure is that there are violation of the aforementioned statutory provisions. In what manner is not forthcoming in the seizure memo. The Court observed "Prima-facie, none of the cited provisions are attracted in the present case, having regard to the factual aspect of the matter read with documents relating to purchase of goods and its transportation and traders are registered and they are fulfilling all the criteria for purchase of dried Areca nuts transportation and sale etc." It has been held that what would constitute the reason to believe are to be recorded and for invoking the powers under Section 110 of the Act of 1962, the Seizing Officer has to record his reason to believe in writing. In Santosh Kumar Murarka [2024 (8) TMI 1161 - PATNA HIGH COURT], the learned co-ordinate Bench held that there was disputed issue as to whether driver of the vehicle had produced relevant docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OURABLE MR. JUSTICE RAJEEV RANJAN PRASAD) This writ application has been preferred seeking the following reliefs:- "(i) To issue a writ in the nature of Certiorari for quashing the Seizure Order/Seizure Memo dated 26.11.2019 whereby and where under 19,188 kgs of Betel Nuts (Areca nuts) as evaluated at Rs. 38,37,600/- and a truck bearing Registration No. UP 65 CT/0573 as evaluated at Rs. 12,00,000/- were seized on 26.11.2019 without having any 'reason to believe" that the impugned goods have been smuggled from Nepal in violation of the provisions of the Customs Act, 1962 and without having any "reason to believe" that the impugned goods and the vehicle are liable for confiscation under the said Act with all consequential proceedings in pursuance of same; And/or (ii) To issue a writ in the nature of certiorari for quashing the show cause notice bearing C. No. VIII (10) 13/Cus/Seiz/Muz/2019-20/961 dated 19.11.2020 issued by the Assistant/Deputy Commissioner of Customs (Prev), Muzaffarpur Division with a pre-conceived notion and subject matter bias, leaving no scope for fair and impartial hearing for the defense of the Petitioner(s); And/or (iii) To issue an Order/Direction/Writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Foreign Trade (Development and Regulation Act, 1992) and Government of India, Ministry of Finance, Notification No. 9/96-CUS (NT) dated 22.01.1996 issued under Section 110 of the Act of 1962." The said notification prohibits import of goods from Nepal which is exported into Nepal from any country other than India. 4. Learned counsel submits that the seized goods were accompanied by invoice, E-way bill issued in accordance with the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the 'GST Act, 2017'). In the E-way bill and the invoice, the name of the buyer and the consignee of goods have been duly shown. The invoice mentions the GST Registration of the consignee as well as the consigner. Copy of the invoice and the E-way bill have been brought on record as Annexure P/2 (Series). It is his submission that the petitioner no. 1 had also paid the requisite fee of Alipurduar Regulated Marketing Committee vide Receipt dated 25.11.2019 (Annexure 'P/3' Series) which clearly established that the seized goods were originated in India and there was nothing to believe that the goods were in any way imported from Nepal to India in contravention of the Act of 1962. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment of Revenue and Otheres reported in 2024 SCC OnLine Pat 6401 would be binding in the light of the Hon'ble Supreme Court decision in the case of Mary Pushpam Vs. Telvi Curusumary and Others reported in (2024) 3 SCC 224. 9. Learned counsel has further relied upon the judgment in the case of Assistant Collector of Customs and Superintendent, Preventive Service Customs, Calcutta and Others Vs. Charan Das Malhotra reported in 1971 (1) SCC 697 a copy of which has been enclosed with the writ petition as Annexure '6'. Attention of this Court has been drawn towards paragraph '15' of the said judgment to submit that in the matter of extension of time under sub-section (2) of Section 110 of the Act of 1962, it was obligatory on the part of the competent authority to give an opportunity of hearing to the petitioners. Submission is that the decision towards extension of time would be in the nature of a quasi-judicial decision and it would be imperative upon the authority to follow the principle of fair play in action by giving an appropriate opportunity to the party who is likely to be affected by the order of extension of time. Submissions on behalf of the Respondents 10. On the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the belief in the mind of the Officer who effected the seizure was reasonable or not. All that it can be considered whether there is ground which prima-facie satisfies the said reasonable belief. In the case of Pukhraj (supra), it was held that a person carrying large quantity of gold and found travelling without a ticket may well have raised a reasonable belief in the mind of the Officer that the gold was smuggled. Further relying upon the judgment of Bikaner-Assam Road Lines India Limited and Others Vs. The Union of India and Others reported in 2000 (1) PLJR 136 (Paragraphs '10', '12', '15' and '16'), learned senior counsel submits that in the said case, learned Single Judge of this Court has discussed Section 110 of the Act of 1962. In paragraph '12' of the said judgment, reliance has been placed upon the judgment of the Hon'ble Supreme Court in the case of State of Gujarat vs. Mohanlal reported in AIR 1987 SC 1321 wherein the Hon'ble Apex Court held that while considering the question whether the officer concerned has a reasonable belief or not that the goods are smuggled ones, the court cannot sit as an appellate forum. It is for the authority to be satisfied, prima-facie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 110, the submission of learned counsel for the petitioner seems to be based on misconception of law. The said provision only provides a period of limitation of six months for purpose of issuance of notice and the consequences of non-issuance of notice would be that the seized good shall be returned. The said provision cannot be interpreted in a manner so as to say that after expiry of the period of six months, no show cause notice could be issued to the petitioner. Consideration 18. We have heard learned counsel for the parties. The main question which has fallen for consideration in the present case is as to whether the seizure order/seizure memo dated 26.11.2019 satisfies the condition precedent i.e. "reason to believe" as envisaged under Section 110 (1) of the Act of 1962. 19. Section 110 (1) of the Act of 1962 reads as under:- "110. Seizure of goods, documents and things.-(1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: 1[Provided that where it is not practicable to remove, transport, store or take physical possession of the seized goods for any reason, the proper officer may give custod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecify. Section 124. Issue of show cause notice before confiscation of goods, etc. - No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person - (a) is given a notice in 4[writing with the prior approval of the officer of Customs not below the rank of 5[an Assistant Commissioner of Customs], informing] him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter: Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned be oral: 6[Provided further that notwithstanding issue of notice under this section, the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed.]" 21. The cluster of words "reasons to believe" has been considered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. It has been held that suspected opinion of the local traders that seized dried Areca nuts is a foreign origin is not reliable and acceptable, in other words with a naked eye one cannot draw inference that whether it is Indian origin or foreign origin. The learned co-ordinate Bench found that in the said case, the goods were seized at Forbishganj and not seized from any port or any customs area to form a belief that the goods were being imported into India. It was further observed that even otherwise, there was nothing on record to form a belief that the goods in question were imported without payment of import duty. 25. In the case of Krishna Kali Traders (supra), the judgment of the Hon'ble Delhi High Court in the case of Worldline Tradex P. Ltd (supra) has been referred to, in which it has been held that panchnama document cannot be read into seizure memo. The Court was informed that pursuant to the judgment of the Hon'ble Delhi High Court in the said case, the Department of Customs had come out with a Circular No. F.No.591/04/2016-Cus(AS) dated 08.02.2017. The said circular is being reproduced hereunder: "Instruction no. 01/2017-Customs F.No. 591/04/2016-Cus (AS) G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their owner. 5. Further, it has been brought to the notice of the Board that in cases where provisional release of seized goods is allowed under Section 110A of the Act ibid, show cause notices are not being issued within the stipulated time period on the ground that the goods have been released to the owner of the goods. The provisions of the Customs Act, 1962 are clear that irrespective of the fact whether goods remain seized or are provisionally released, once goods are seized, the time period (including extended time period) stipulated under Section 110 (2) of the Act shall remain applicable and has to be strictly adhered to. 6. The Chief Commissioners/Director Generals are requested to circulate the present guidelines to all the formations under their charge. Difficulties, if any, in implementation of the aforesaid guidelines may be brought to the notice of the Board. Hindi version follows. (Rohit Anand) Under Secretary to the Government of India" 26. The learned co-ordinate Bench concluded that panchnama cannot be read into seizure memo. In the said case, it was also held that both the seizure memo and panchnama would show that it was firstly the seizure memo which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 SCC 234 were cited. The learned Division Bench distinguished the case of Sh. Rajendra Sethiya (supra) from that of those cases and held that the dictum in Om Sai Trading Company (supra) was on the peculiar facts coming out in that case, (i) of the ownership of the goods being undisputed, (ii) nothing indicating the goods to be sourced from outside from the country and (iii) the laboratory report being extraneous to the Customs Act, which resulted in quashing of the very seizure notice, without even relegating the petitioner to the adjudicatory procedure. In Sh Rajendra Shetiya (supra), however, the learned Division Bench found that there were simple admitted facts and looking at the valuation carried out by the Department on interception and detection of goods, it has been found that the valuation was done by a government registered valuer and it indicates markings on both the gold bars "Valcambi Suisse (995) CHI Essayeur Foundeur". The gold bars with the recital thereon, was admitted to be that entrusted by the respondent to his employee who was the person intercepted. The seizure memo of 24.07.2017 which was prepared at the DRI Regional Unit, Patna Office clearly indicated vio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 9/96-CUS (NT) dated 22.01.1996 issued under Section 110 of the Customs Act, 1962. Case No. & Date 1 13/2019-20 Dated 26.11.2019 Sl.No. Description of goods Make/Origin Quantity of goods Value (In Rs.) 1. Total 245 bags of Arecanut (Betel Nut) (Packed in 245 bags each containing 78.0 kgs.) Third Country Origin 19188Kg Rs. 38,37,600/- 3. Truck No. UP65CT-0573 Engine No. B591803221J63288258 Chasis No. MAT466388C3J26447 Tata Truck 1 (One) No. Rs. 12,00,000/- Total Rs. 50,37,600/- (Rupees Fifty Lacs Thirty Seven Thousands & Six Hundred Only) Signature of witnesses Signature/thumb impression of accused Signature of the seizing officer" 32. We have noticed hereinabove that the Central Board of Excise and Customs (Anti-Smuggling Unit) had issued Instruction No. 01/2017-Customs dated 08th February, 2017 in which it has been clearly stated that whenever goods are being seized, in addition to panchnama, the proper officer must also pass an appropriate order (seizure memo/order etc.) clearly mentioning the reasons to believe that the goods are liable for confiscation. The same instruction states in paragraph '5' that in cases where provisional rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the first proviso to sub-section (2) of Section 110, the goods shall be returned to the person from whose possession they were seized. The effect of not giving notice under Clause (a) of Section 124 within six months of the seizure of the goods is stipulated under sub-section (2) of Section 110 and according to this, the consequence would be that the goods shall be returned to the person from whose possession they were seized. 36. In this case, admittedly the goods have been provisionally released on 16.06.2020 i.e. after a period of six months, twice this period has been extended by three months each. It is on this point that learned counsel for the petitioner has relied upon the judgment of the Hon'ble Supreme Court in the case of Charan Das Malhotra (supra). This judgment was rendered in the year 1983, therefore, it refers the then existing provision of Section 110. In the said case, it has been held in paragraph '12' as under:- "12. There can be no doubt that the proviso to the second sub-section of Section 110 contemplates some sort of inquiry. The Collector, obviously, is expected not to pass extension orders mechanically or as a matter of routine, but only on being sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has observed as under:- "15. But it may be said that in both those cases there was a civil right involved and the power, therefore, had to be held quasi-judicial. But in the present case also, the right to restoration of the seized goods is a civil right which accrues on the expiry of the initial six months and which is defeated on an extension being granted, even though such extension is possible within a year from the date of the seizure. Since the Collector has on facts to decide on the existence of a sufficient cause, although his decision as to sufficiency of materials before him may be within his exclusive jurisdiction, it is nonetheless difficult to comprehend how he can come to his determination unless, as the Division Bench of the High Court has said, he has before him the pros and cons of the question. An ex-parte determination by the Collector would expose his decision to be one sided and perhaps one based on an incorrect statement of facts. How then can it be said that his determination that a sufficient cause exists is just and fair if he has before him a one sided picture without any means to check it unless there is an opportunity to the other side to correct or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and other cases of like nature in which this Court had been pleased to quash the seizure memo(s). While disposing of the SLP(s), September 15, 2022 order of the Hon'ble Supreme Court reads as under:- "1. Leave Granted. 2. Having heard learned counsel for the parties, in view of the facts of the present case, and as the goods have already been released, we are not inclined to interfere with the decision of the High Court quashing the seizure memo. However, we clarify that the quashing of the seizure memo does not mean the appellants cannot investigate, and proceed in accordance with law under the provisions of the Customs Act, 1962. .." 41. It is apparent from a bare reading of the order of the Hon'ble Supreme Court that it was passed after granting leave against the Division Bench judgments of this Court and the effect of the order of the Hon'ble Supreme Court may be clearly seen. The principle of 'merger' will apply. Despite quashing of the seizure memo, it cannot be said that the appellants cannot investigate and proceed in accordance with law under the provisions of the Act of 1962. 42. In the light of the aforementioned discussions, when we examine the seizure memo (Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent indicated hereinabove. (Rajeev Ranjan Prasad, J) I agree. (Shailendra Singh, J) ------------------------- Notes:- 1. Subs. by Act 23 of 2019, S.74(i), for proviso. Prior to its substitution, proviso read as under:- "Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.". 2. Substituted by Act 36 of 1973, S.4, for sub-S. (1) (w.e.f.1-9-1973) 3. Substituted by Act 40 of 1989, S.2, for "diamonds, manufacturers of gold or diamonds". 4. Substituted by Act 29 of 2006, S.28, for "writing informing" (w.e.f. 13-7-2006). 5. Substituted by Act 8 of 2011, S.49, for "a Deputy Commissioner of Customs". 6. Inserted by Act 13 of 2018, S.94. 7. Substituted by Act 13 of 2018, S.92, for the proviso. Prior to its substitution, the provisos read as under: - "Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the [Principal Commissioner of Customs or Commissioner of Customs] for a period not exceeding six months.". 8. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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