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Judgment
The petitioner complains that, the respondent is guilty of unauthorized detention of the goods belonging to the petitioner. Learned Advocate for the
petitioner submits that, the petitioner had imported goods under the subject Bill of Entry. He had complied with Section 46 of the Customs Act, 1962.
In the event, the authorities had found anything wrong in the procedure adopted by the petitioner while importing goods, the authorities could have
taken measures permitted to be taken under the Customs Act, 1962. He refers to a writing dated October 13, 2017 issued by the Customs authorities
wherein the Customs authorities, had directed examination of the goods, in the presence of the Director of Revenue Intelligence (DRI). Such writing
goes on to say that, the clearance of the goods would be withheld, subject to further orders from DRI. He submits that, such order tantamounts to the
respondents taking dominion over the goods.
The petitioner looses custody of the goods. Consequently, such a direction dated October 13, 2017 is to be construed as a seizure of the goods. That
being so, a period in excess of six months has elapsed from the date of seizure being October 13, 2017. Therefore, under the provisions of Section
110(2) of the Customs Act, 1962, the petitioner has become entitled to unconditional release of the goods. He relies upon (156) ELT 344 Cal (ESI Ltd.
â€" Vs- Union of India) in support of his contentions that, the respondent having received dominion control over the goods on October 13, 2017, the
same is to be considered as to the date of commencement of the period prescribed under Section 110 (2) of the Act of 1962. He relies upon (337)
ELT 321 (Mad.) (M/s. A.S. Enterprises-Vs-The Commissioner of Customs) and submits that, every possible scenario under the Customs Act, 1962
with regard to the release of the goods have been taken into consideration therein.
Learned Advocate for the petitioner refers to the definition of importer given under Section 2(26) of the Customs Act, 1962. He submits that, even if,
the respondent authorities releases the goods and the petitioner is found not to be the actual owner of the goods, then also, the respondent is not
remediless. The respondents still continue to have the right to issue a show cause notice and initiate proceedings against the delinquent, in accordance
with law. He submits that, an ostensible owner of the goods is to be considered as the importer of the goods within the definition of importer given in
Section 2(26) of the Act of 1962. He refers to the Kerala High Court judgment dated July 21, 2011 (The Proprietor-Vs-The Commissioner of
Customs) and submits that, the aspect of a “name lender†importing the goods has been taken into consideration and it has been held that, such
name lender can be allowed to import goods.
Learned Advocate appearing for the DRI submits that, the date of actual seizure of the goods should be considered as January 6, 2018. The seizure
proceeding was drawn up on such date and a panchnama was prepared. He refers to Section 110(2) of the Customs Act, 1962 and submits that, the
basis for invoking the jurisdiction under such section is the formation of an opinion. The authorities must have reasons to believe for it to invoke
Section 110(2) of the Customs Act, 1962. In the present case, the authorities after having cogent reasons to believe, had invoked the section 110 of
the Customs Act, 1962 on January 6, 2018. Considering the date of seizure to be on January 6, 2018 the authorities have a period of six months
therefrom to issue the show cause notice. The time period prescribed therein has not elapsed. Consequently, the petitioner is not entitled to
unconditional release of the goods under Section 110(2) of the Customs Act, 1962. He submits that, the writing dated October 13, 2017, which the
petitioner claims to be an order of seizure, cannot be construed to be as seizure made by the authorities. According to him, the authorities did not take
the custody of the goods on such date. The order was for the purpose of inspection of the goods. An order for inspection of goods cannot be equated
with an order of seizure. An order of seizure is required to be undertaken after fulfilling the prescribed procedure. In the instant case, the authorities
cannot be considered to have taken possession of the goods on October 13, 2017, for the petitioner to claim that, the petitioner is entitled to relief under
Section 110(2) of the Customs Act, 1962.
Referring to the conduct of the petitioner, he submits that, the petitioner claims to be a partnership firm. The relevant documents produced by the
petitioner states that, the firm has two Directors. He submits that, a claim of a partnership firm to have Directors raises justifiable doubts. Moreover,
the gentleman, who claims to be the authorized signatory of the partnership firm, is acting as the authorized signatory in respect of various other legal
entities in respect of which, DRI has undertaken investigation. The apprehension is that, undisclosed persons behind the transactions are operating
through the mechanism of a disclosed identity, and are guilty of defrauding revenue. In any event, the petitioner is guilty of mis-description, under
valuation and defrauding the revenue. He refers to various documents in support of such contentions.
Learned Advocate appearing for the Customs adopts the contentions of the DRI. In addition, he submits that, the Customs authorities had requested
the petitioner to warehouse the subject goods under Section 49 of the Customs Act, 1962. One of such conditions imposed in such order is that, the
two persons who claim to be the “Directors†of the importing firm must be present during the procedure under Section 49 of the Customs Act,
1962. He submits that, despite such notice being received by the petitioner, the same has not being complied with.
In reply, learned Advocate for the petitioner submits that, the Customs authorities as also DRI will take the two persons into custody, if they appear
before them. Considering such situation, the persons did not appear before the authority. I have considered the rival contentions of the parties and the
materials made available on record. The petitioner claims that, it is entitled to release of the goods under Section 110(2) of the Customs Act, 1962.
Section 110(2) of the Customs Act, 1962 contemplates a situation where any goods are seized under sub-Section (1) and no notice in respect thereof
is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession
they were seized.
In the present case, the petitioner claims that, time period fixed under sub-Section (2) of Section 110 of the Customs Act, 1962 must commence on
October 13, 2017. The view of the DRI and the Customs is otherwise. According to DRI and Customs, the seizure happened on January 6, 2018 and
not on October 13, 2017. This is an issue of fact, which requires further consideration. It would be inappropriate to take a decision on the date of
seizure without allowing the respondents an opportunity to file affidavits.
ESI Limited (supra) concerns the questions of release of the goods under Section 110 of the Customs Act, 1962. It finds that, the goods in question
were sealed by the Customs on a particular date. The date on which the Customs authorities had sealed the goods was taken to be the date on which
the period of six months would commence, in terms of Section 110(2) of the Customs Act, 1962, as the customs had exercised dominion over the
goods on the date of the sealing. In the present case, the Customs authorities had asked for examination of the goods on October 13, 2017 with the
rider that, the clearance was to be withheld, subject to the approval of the DRI. According to DRI, the writing that, the clearance is to be subject to
the clearance of the DRI appearing in the writing dated October 13, 2017 is misnomer.
M/s. A.S. Enterprises (supra) is on similar line and lays down the ration as to when the goods are to be considered as being seized under the
provisions of the Customs Act, 1962. As noted above, the date of commencement period of six months under Section 110(2) is disputed. In the
present case, the parties are at variance on the date of commencement. The respondents have a particular view on the subject. They should,
therefore, be afforded one opportunity to file affidavits to substantiate their point of view on the issue concerned.
In such circumstances, it would not be proper to grant an interim order directing the release of the goods. The balance of convenience and
inconvenience is not in favour of the petitioner in granting an interim order of release of the goods, in the facts of the present case. Interim order as
prayed for, therefore, is refused. Let affidavit-in-opposition be filed within three weeks from date. Affidavit-in-Reply be filed within one week
thereafter. List the writ petition under the heading “For Hearing†four weeks hence.
It is pointed out on behalf of the DRI that, the DRI is not a party respondent in the present writ petition. However, by an order dated June 6, 2018, the
petitioner was directed to issue notice upon DRI. The petitioner has done so. DRI has since been heard in the present writ petition. As noted above,
DRI is a necessary and proper party in the present writ petition. It would be appropriate to add DRI as a party respondent in the present writ petition.
The Customs authorities will be treated as first respondent and the DRI will be the second respondent in this writ petition. Learned Advocate-on-
Record for the petitioner is granted leave to amend the cause title of the writ petition accordingly. Since DRI is already represented, no further copy
of the writ petition need be served upon it excepting that, the petitioner will serve a copy of the amended cause title of the writ petition upon the two
learned Advocates appearing for the respective respondents.