By TIOL News Service:

ERNAKULAM, MAY 11, 2016: THE question before the High Court was - “Whether the petitioner is entitled for provisional release of the goods, pending adjudication, even if he is not the owner of such goods imported”.

The Petitioner is the holder of a Importer-Exporter Code Number (IEC) issued under the Foreign Trade (Development and Regulation) Act, 1992. Based on an interim direction of the High Court, an order has been passed under Section 110-A of the Customs Act, 1962 to release the goods provisionally pending adjudication.

However, the Customs authority took the stand that the petitioner is not the owner of the goods and therefore, the goods cannot be released to him on a provisional release. Petitioner seeks release of the goods.

The High Court held:

+ section 110A would indicate that provisional release can be made to the owner of the goods. However, it is to be noted that the under Section 125 of the Customs Act, after final adjudication is over, the goods can be released to the owner of the goods or to the person from whose possession or custody such goods have been seized. Section 125 was originally worded to give custody of such goods only "to the owner of the goods". An amendment has been made with effect from 27/12/1985 by incorporating a provision to give release of the goods to the person from whose possession or custody such goods have been seized.

+ there is no corresponding amendment carried out in Section 110-A by incorporating the above provision to release the goods to any other person other than the owner of the goods.

+ the intention of Section 125 is that, after adjudication, the Customs Authority is bound to release the goods to any person from whose custody such goods have been seized. If in terms of Section 125 such goods can be released to such person, there is no impediment in releasing goods to such a person in terms of Section 110A of the Customs Act. It is very clear that the Customs Act would recognise any person based on ownership or possession or court order for the purpose of determination of any action in terms of the Customs Act. Section 110A cannot be read in isolation from Section 125 of the Customs Act. Both the provisions have to be read together to understand the scope of release.

Accordingly, the High Court directed that the goods should be released to the Petitioner.

(See 2016-TIOL-916-HC-KERALA-CUS)