Cus - Dept. cannot take shelter under device of 'detention' in order to avoid consequences flowing from 'seizure' of goods: HC
By TIOL News Service
NEW DELHI, DEC 16, 2016: THE petitioner arrived from Dubai at Terminal T-3 and was intercepted by the Custom Officers at the exit gate before crossing the green channel. The gold kara (bracelet) owned by the petitioner was seized (Detention Memo dated 11.02.2015) on the ground that the same was imported from Dubai.
The petitioner sought release of the bracelet alongwith supporting documents to show that the same was his ancestral jewellery and was owned by him even before leaving for Dubai.
As the representation was not accepted, the petitioner is before the Delhi High Court.
Relying upon section 110(2) of the Customs Act, 1962, it is submitted that since the Custom Authorities have not issued any SCN u/s 124(a) of the Act for seizure of the gold kara (bracelet), the same is liable to be released. Support is derived from the decision in Mohd. Salman Khan vs. Union of India - 2016-TIOL-635-HC-DEL-CUS .
The counsel for the Revenue contended that the gold kara (bracelet) has not been seized but merely detained for "appraisement and clearance as per Rules". Inasmuch as since no seizure has been effected, section 110(2) of the Act has no applicability. Furthermore, since the petitioner has not presented himself for appraisal, the seizure has not taken place and, accordingly, there is no question of issuance of any notice under Section 124(a) of the Act.
The High Court observed that the judgment in the case of Mohd. Salman Khan (supra) clearly covers the issue inasmuch as the Customs Department cannot take shelter under the device of 'detention' of goods in order to avoid the consequences flowing from the 'seizure' of goods.
After extracting section 110(2) of the Act, the High Court observed -
++ Reading of Section 110(2) clearly shows that where any goods have been seized under Sub-Section (1) and no notice thereof is given under Clause (a) of Section 124 within six months of the seizure, the goods are liable to be returned to the person from whose possession they were seized. Proviso to Section 110(2) stipulates that the said period of six months, may on sufficient cause, be extended by the Principal Commissioner or Commissioner of Customs for a further period not exceeding six months.
++ In terms of Section 110(2) read with Proviso, the maximum period for which the goods can remain seized without issuance of a notice under Section 124(a) is one year.
++ In the present case, the goods were detained on 11.02.2015 and, till date, no notice under 124(a) of the Act has admittedly been issued.
++ It is clear that there is a definite time limit within which the Department has to determine if the seized goods are to be confiscated or not. If the Department decides to confiscate the goods, a show cause notice under Section 124(a) of the Act has to be issued.
++ In the present case, the seizure of the goods, as noted above, took place on 11.02.2015. For nearly one year and ten months, no show cause notice under section 124(a) of the Act has admittedly been issued. Since no show cause notice has been given, the consequences, as is the mandate of Section 110(2) of the Act, have to follow.
The writ petition was allowed. The respondents were directed to unconditionally release the gold kara (bracelet) seized by the respondents under the Detention Receipt dated 11.02.2015, to the petitioner within two weeks.
It is also clarified that the release of the gold kara (bracelet) would not debar the respondents from taking appropriate action in accordance with law.
(See 2016-TIOL-3024-HC-DEL-CUS)
