By TIOL News Service

NEW DELHI, APRIL 27, 2015: THE goods viz. high end luxury wrist watches seized u/s 110 of the Customs Act, 1962 in October, 2012 were returned in the month of November, 2012 by observing that – "The detention of goods…under panchnama dated…stands vacated following matching the goods with the documents."

On 21.11.2014, in the subject matter, the SIO, DRI issued a notice seeking information u/s 108 of Customs Act, 1962.

The importer filed a writ petition invoking the principle of waiver and promissory estoppel and contending that the respondent, having vacated the order of seizure/detention of goods after matching the goods with the documents submitted by the appellant, is deemed to have waived any further proceeding and is estopped from enquiring further about the matter.

The Single Judge dismissed the writ petition on 24.12.2014 by observing that the respondent was entitled to verify the authenticity of the documents submitted by the appellant and on the basis of which the seizure/detention order was vacated; that thus the endeavour of the respondent to verify the documents provided by the appellant cannot be interdicted. According, the contention that the respondent is estopped from verifying the documents was rejected.

An intra-court appeal was filed by the importer against this order on the plea of promissory estoppel and when the same came up before the High Court an order was passed thus -

"8. The said plea is clearly misconceived as held by the learned Single Judge also. Once it is found that the seizure of the documents was in exercise of powers under Section 110 of the Customs Act, it has to be seen whether under the said Act, upon the seizure / detention order being vacated nothing survives. If it is not so under the statute, the principle of estoppel against the provisions of the statute would not arise. However neither the appellant has considered the provisions of the Customs Act nor has the learned Single Judge referred to the same…."

It was also observed –

"12. …Section 125 provides for payment of fine in lieu of confiscation. It prima facie appears that once the respondent has not issued any notice under Section 124 within six months of seizure of goods, it would not be entitled to impose any penalty also. Though Section 108 empowers the respondent to summon but such summoning can only be in connection with an action which the respondent is entitled to take and not in connection with a matter the right of the respondent to pursue which has been extinguished."

The matter was re-notified by the High Court on 04.03.2015.

The senior counsel for the appellant (after passover) contended that though the detention on 29th October, 2012, 30th October, 2012 and 31st October, 2012 of the goods of the appellant was seizure thereof within the meaning of Section 110 of the Customs Act but the said order of seizure was revoked by the Customs Authorities themselves on 6th November, 2012, 9th November, 2012 and 20th November, 2012.

After mentioning about section 21 of the General Clauses Act, 1897 in the matter of revocation of an order u/s 110,the appellant stated that the only point they urge in the appeal is that the notice dated 21st November, 2014 issued to the appellant u/s 108 of the Customs Act contains a finding against the appellant and which is not permissible in law in a show cause notice.

The High Court observed that although such a contention did not arise from the pleadings in the writ petition or the memorandum of appeal, nonetheless to put a quietus to the issue, the matter was being dealt with.

The notice dated 21.11.2014 issued by the SIO, DRI , was extracted by the High Court and in this context, the appellant argued that the second paragraph of the notice contains a finding that the documents submitted by the appellant do not carry a mention of serial number of watches and that the model number or serial number on the documents did not match with the watches. It was also submitted that no such finding of fact, against the appellant, could have been returned in a notice u/s 108 which is in the nature of a show cause notice.

The High Court while dismissing the appeal and refraining from imposing any costs on the appellant observed –

++ We are afraid the aforesaid contention is on a complete misreading of the notice aforesaid. The appellant cannot pick a line here and a line there, out of context and impute a motive, which a reading of the whole document does not disclose. A reading of the whole of the aforesaid notice dated 21st November 2014 shows that the purport thereof is to seek information from the appellant qua the doubts entertained by the Customs Authorities and for eliciting the response, the doubts entertained have necessarily to be stated.

(See 2015-TIOL-1046-HC-DEL-CUS)