Point of Law: What is evident from the affidavit-in-reply filed by the investigating agency is that based on the statements recorded under Section 108 of the Customs Act, 1962, the investigation is pending. Reading of the provisions of the Customs Act, 1962 Sections 111 and 112 which provide for confiscation of goods post an investigation, the authorities are required to issue a show-cause notice under Section 124 of the Customs Act, 1962 before confiscation of goods.

JUDGMENT :

BIREN VAISHNAV, J.

1. The petitioner M/s. Hazel Mercantile Ltd., a Company incorporated under the Companies Act, 1956, has filed this petition, invoking Article 226 of the Constitution of India for the following prayers:

“52. The Petitioner therefore prays that:

(A). That direction may be given to quash the illegal seizure memo dated 26.2.2021 issued by the Respondent No.2 and declare the seizure of the imported goods as illegal, and unauthorized by law:

(B).That direction may be given to the Respondents to release the subject goods without any condition with immediate effect as per the Fresh Test Report analyzed by the Indian Institute Of Petroleum in respect of the sealed Sample No.5 and the Test Report analyzed by the Geo-Chem Laboratories Private Limited in respect of the Sealed Sample No.4 and it may be declared that the Seizure Memo issued by the respondent should be declared as null and void in the interest of justice.

(C). That the Test Report submitted by the Geo-Chem Laboratories and Indian Institute Of Petroleum Dehradun in respect of the Sealed Sample No.4 and 5 which confirms that the subject goods are Naptha should be declared as a valid test report in the interest of justice.”

2. The facts in brief are as under:

2.1 It is the case of the petitioner that it entered into contract with Aureole Trading (U.A.E) for supply of product Naphtha. The shipment of Naphtha was loaded from the port at Oman and was imported at the port Kandla. As per the Contract the subject goods were shipped through Delta Shipping And Trading LLC on Vessel MT Tuna vide 7 Bills of Lading.

2.2 The case of the petitioner is that prior to exporting the concerned consignment of Naphtha from the Port at Oman the subject goods were tested and a Certificate of Quality was given by Muscat International Shipping & Logistics certifying that this consignment was of Naphtha. The vessel thereafter arrived at Kandla.

2.3 It is the case of the petitioner that once the consignment arrived at the Kandla Port vide Bills of Entry dated 06.02.2021, a test was carried out by the Custom House, Kandla. According to the petitioner, the report concluded that the sample was composed of mixture of hydrocarbons having certain qualities. The test report was for carrying out a test as to whether the goods were Naphtha or others.

2.4 The Director of Revenue Intelligence at Gandhidham issued a Seizure Memo under Section 110 of the Customs Act, 1962, seizing the goods under the provisions of the Act. Briefly stated the case of the authorities is that the goods that were imported purportedly as Naphtha, on examination at the Custom House Laboratory at Kandla were found to be “ Natural Gasoline Liquid”. In the opinion of the authorities it appears that the imported goods have been mis-declared and mis-classified as Naphtha instead of Natural Gasoline Liquid, which according to the authorities is covered under CTH No. 27101290 and can only be imported by State Trading Enterprises in view of the Foreign Trade Policy. The petitioner not being an importer holding the status of a State Trading Enterprise, could not have imported Natural Gasoline Liquid.

2.5 The case of the petitioner is that subsequent to the test report by the Custom House, Kandla, on 15.02.2021, a report of TUV India Private Limited, a petroleum chemical and gas testing laboratory at Jamnagar was obtained. By its report dated 22.02.2021the report confirmed that the goods that were shipped were Naphtha.

2.6 Representations were made from time to time for provisional release of goods and for re-testing. The case of the petitioner was that the sample be re-tested as according to the perception of the petitioner it was Naphtha and not Natural Gasoline Liquid. The Petitioner relied upon the Report dated 22.2.2021 and requested for a re-test on the ground that the Custom House Report was unreliable and inconclusive.

2.7 The petitioner approached this Court by filing Special Civil Application No. 4803 of 2021 with the pra