The expiration of the one-year period without the issuance of a show cause notice results in the unconditional release of seized goods under Section 110(2) of the Customs Act, and the provisional release under Section 110-A does not override the operation of Section 110(2).

MR. JUSTICE S.RAVINDRA BHAT

1. In this writ petition, the petitioner impugns the Panchnama dated 09.05.2012 through which Respondent No. 5, the Directorate of Revenue Intelligence (DRI) carried out re-seizure of Maerati Quattroporte 4.2 Automatic car (“the Maserati car”) and revocation of supurdarinama dated 26.4.2011.

2. The facts necessary in disposing of this writ petition are that the petitioner is engaged in the business of trading in imported brand new and domestically purchased second hand luxury cars, through M/s. Big Boyz Toyz Pvt. Ltd. of which he is a director. The petitioner claims that on 07-12-2010 it imported a brand new Maserati car. The fifth Respondent, by Panchnama dated 26.04.2011, in exercise of powers under Section 110 of the Customs Act, 1962 (the Act) detained, inter alia, the Maserati car under and on the same day, handed it over to petitioner vide supurdarinama (or supradginama). Thereafter, by order dated 24.10.2011 the Commissioner of Customs (CC) extended the period for issuance of show cause notice for a further period of 6 months w.e.f. 25.10.2011 under Section 110(2) of the Act. On 09.05.2012, the fifth respondent, by panchnama cancelled the supurdarinama and took possession of the Maserati car. The petitioner seeks direction for quashing of the panchnama dated 09.05.2012 and consequent order releasing the Maserati car.

3. In support of the claim, learned counsel Shri. Pradeep Jain for the petitioner urged that upon expiry of the period of one year from the seizure of the Maserati car, it was entitled to an unconditional release of the same. He pointed that this one year period expired on 25.4.2012. He placed reliance on J.K. Bardolia Mills v Dy. Collector and Ors 1994 (5) SCC 332 and Harbans Lal v. Collector of Central Excise & Customs 1993 (67) ELT 20 (SC).

4. The learned ASG appearing for the fifth respondent defended the panchnama dated 9.5.2012 and contended that the car was released pursuant to a request made by the petitioner under Section 110-A of the Act. This order was made before expiry of the overall period of one year contemplated under Section 110 (2) and the extended period of six months, available for issuance of the show cause notice. The petitioner, it is submitted, consciously sought for release of the seized car, - a request that was granted subject to fulfillment of conditions, provisionally, pending issuance of show cause notice and adjudication in respect of duty liability. Such being the case, there was no question of the seizure having lapsed by operation of Section 110 (2).

5. The revenue relied on the judgment reported as Jayant Hansraj Shah v Union of India 2009 (1) Bom CR 474 to say that whenever the power to issue show cause notice is preserved, and a request is made, to release the goods taken into custody, there would be no question of unconditional release, by operation of Section 110(2) of the Act.

6. This court has considered the arguments of the parties. The relevant provisions of the Customs Act, 1962 read as:

“110. Seizure of goods, documents and things: (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods:

Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.

(2) 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:

Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Collector of Customs for a period not exceeding six months.

(3) The proper officer may seize any documents or things which in his opinion will be useful for, or releva