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High Court Of Delhi
KRAMPE HYDRAULIK (INDIA) - Appellant
Versus
UNION OF INDIA - Respondent
CIV.WRIT 811 of 1977
Decided On : 07/30/2003
Held:
"Seizure" implies the taking or removing of something from the possession of another person, be it actual or constructive. Seizure of property is also used in the sense whenever there is some meaningful interference with an individuals possessory interest in that property. The direction given on 3.11.1976 to the petitioners was clear and categorical and was to the effect that the petitioners were not to deliver the said goods without the consent of the Assistant Collector of Customs. This, to my mind, clearly implies an interference with the petitioners possessory interests in the said goods and would, thereforee, amount to seizure of the said goods. Moreover, the seizure does not necessarily imply actual taking of possession. Even taking of constructive possession would amount to seizure. When a direction is given to a person that he shall not remove or otherwise part with or dealt with the goods, albeit in his possession, such a direction would amount to a seizure of the goods. In fact, even the proviso to Section 110 (1) contemplates this.
In the present case, the direction given on 3.11.1976 amounted to the proper officer exercising incidents of possession in respect of the said goods by requiring the petitioners not to deliver the said goods without the, consent of the Assistant Collector of Customs, The seizure of the said goods as contemplated under Section 110 of the said Act took place on 3.11.1976 itself and not on 11.11.1976 when actual physical possession of the said goods was taken over by the Customs Officers.
Sections 110 and 124 - Confiscation — Show cause notice under Section 124 — Limitation — Issue of notice beyond prescribed period of six months — Effect — Only effect of any non-service of a show-cause notice within the stipulated period of six months of the date of seizure is that the seized goods would be liable to be returned forthwith to the person from whose possession they were seized and it would not affect the validity of seizure or the show cause notice to be issued.
Section 124 of the Customs Act requires that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods, or such person is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty. Thereafter, an opportunity of making a representation in writing within such reasonable time is to be granted and a reasonable opportunity of being heard is also to be provided. However, this Section does not in any manner prescribed any time frame as to when the notice in writing is to be issued. In other words, there is no time limit prescribed for the issuance of such a notice as contemplated under Section 124 (a). Now, looking at the provisions of Section 110 (2), it is apparent that it relates only to the question of seizure of the goods. It clearly stipulates that if after the goods are seized under the provisions of Section 110 (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 are to be returned to the person from whose possession they, were seized.
The non-issuance of the show cause notice within the prescribed period of six months would only result in the continuance of the seizure being bad and the petitioners entitlement to the return of the said goods. It would not affect the validity of the seizure itself or the show cause notice which has yet to be adjudicated upon.
Sections 47, 110 and 124 - Confiscation — Show cause notice under Section 124 — Validity of issue — Bill of Entry assessed and goods cleared for home consumption under Section 47 — Does not invalidate issue of Section 124 notice and proceedings in pursuance of the notice to be continued. The petitioners have come to Court after the issuance of the said show cause notice. The issuance of the show cause notice has already been held to be valid. The mere clearance of the goods under. Section 47 does not debar the issuance of a show cause notice under Section 124.
The non-issuance of the show cause notice within the stipulated six months period merely entitled the petitioners to the return of the seized goods without any conditions. The goods have already been returned vide order dated 6.12.1977 although, upon the imposition of the condition of a bank guarantee. That condition is removed by this order. The bank guarantee be returned to the petitioners and they may have the same cancelled. The proceedings pursuant to the show cause notice shall be continued and after due compliance of the provisions of Section 124 the appropriate order be passed by the concerned authorities.
( 1 ) THE questions involved in this writ petition are:-
(I) whether detention of the petitioners goods on 3. 11. 1976 amounted to seizure within the meaning of Section 110 (1) of the Customs Act, 1962? (ii) if the answer to question (i) above is in the affirmative, whether the Show Cause Notice which was issued under Section 124 of the Customs Act 1962 on 7. 5. 1977 was not bad in law in view of the provisions of Section 110 of the Customs Act, 1962? (iii) whether, in any event, the petitioners goods could at all be confiscated or penalties be imposed upon the petitioners after the Bill of Entry in respect of the said goods had been assessed and the said goods had been cleared in terms of the provisions of Section 47 of the Customs Act, 1962?
( 2 ) TO examine the questions in the perspective of the petitioners case, a brief resume of the facts would be necessary.
( 3 ) THE petitioner No. 1 held an import licence for, inter alia, importing "thin Walled Bearings - All Sizes". By a letter of authority, the petitioner No. 1 authorised and permitted the petitioner No. 2 to import the goods and to open Letter of Credit and make remittance of foreign exchange against the said licence held by the petitioner No. 1. On 1. 11. 1976 the petitioner No. 2 filed a Bill of Entry No. 11152 for the import of "thin Walled Bearings" (hereinafter referred to as the "said goods") which landed at Palam Airport vide Consignment Note No. 098-07804661 (import rotation No. 76/7392-Flight Air India 106 of 19. 10. 1976 ). The said goods were taken delivery of by the petitioner No. 2 on 2. 11. 1976 after payment of the duty on the basis of the declared value. The clearance had been allowed against import licence No. T/s/1853921 dated 17. 11. 1971 in the name of the petitioner No. 1. The Bill of Entry for home consumption which was filed by the petitioner No. 2 was accordingly assessed, duty was paid and the goods were cleared and taken delivery of by the petitioner No. 2. It is alleged that information was received in the Customs House to the effect that the consignment cleared by the petitioner No. 2 under the said Bill of Entry had been grossly under-valued and that the import licence against which the said goods had been released did not, in fact, cover the said goods. On the basis of this, certain documents were collected for re-examining the case in the light of the information received in the Customs House.
( 4 ) ON 3. 11. 1976 at about 18:00 hours, Customs Officers examined the said consignment of goods at the residence of the petitioner No. 3 at H-5/2, Model Town, Delhi. The petitioner No. 3, it may be pointed out, was the Manager of the petitioner No. 2. The goods were examined and two representative samples were drawn in the presence of the petitioner No. 3. One set was sealed with Customs Seal No. 7 and was handed over to petitioner No. 3 and the other set duly sealed was taken over by the Customs Officers for further investigation and examination. As per the Memo of Examination dated 3. 11. 1976 a copy whereof is at page 32 of the paper book, it is indicated that the examination of the consignment was done in a peaceful manner. Most importantly, it is recorded therein as under:- "the party has been directed not to deliver the said consignment without the consent of the Assistant Collector of Customs, New Delhi. " it is in view of this direction that the petitioners allege that the examination carried out on 3. 11. 1976 itself amounted to a seizure of the said goods as contemplated under Section 110 of the Customs Act, 1962 (hereinafter referred to as the said Act ). On 11. 11. 1977 a formal seizure memo was drawn up and the said goods were physically seized and taken possession of by the Customs Officers under the alleged reasonable belief that the same had been smuggled into India. Thereafter, on 9. 5. 1977 a show cause notice was served on the petitioner No. 1 contemplating confiscation and penalty under the provision
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