The main legal point established in the judgment is that clearance under Section 47 does not debar action under Sections 28 or 111 of the Customs Act, and the power of seizure must be exercised with duly recorded reasons to believe.

1. This writ petition calls in question search and consequent seizure of goods belonging to the petitioners vide seizure memos dated 24-2-2005, Annexure P. 5 and 29-3-2005, Annexure P. 12 and summons dated 29-3-2005, Annexure P. 14,1-4-2005, Annexures P. 16 and P. 17.

2. Case of the petitioners is that they are engaged in importing goods from China and Taiwan. The goods are imported for home consumption i.e. for mixing with masses of the goods of the country. They filed bill of entry under Section 46 of the Customs Act 1962 (for short, the Act). It is further submitted that in respect of goods i.e. PVC coated fabrics imported during the period December, 2004 to January 2005, covered by bills of entry, Annexure P.I (collectively), the proper officer cleared the bills of entries under Section 47 of the Act and the petitioners deposited the requisite duty. As far as second consignment of goods, which are woven silk fabrics, B Grade, bills of entries were cleared on provisional assessment basis on deposit of duty and furnishing of PD bond and bank guarantee. After clearance, the goods were stored at 144, HSIDC, Kundli, Industrial Estate, Sonepat. On 8-2-2005 at 5.30 PM, the officials of the Customs Department came at the godown of the petitioners and sealed their godown. The petitioners made representation pointing out that action of the respondents was illegal. Godowns were desealed on 24-2-2005 but again the respondents seized the goods and left the same on superdari with petitioner No. 2. Undisputed allegation of the petitioners is that similar goods belonging to the petitioners as well as other parties had been cleared under similar circumstances before/ during/after the consignments of the petitioners were received. Bills of entry in respect of such goods were Annexure P. 19 (collectively). The petitioners also received summons asking petitioner No. 2 and his son"to aprecr before the authorities.

3. Action of the respondents has been challenged on the grounds that once the goods have been cleared under Section 47 of the Act, adjudication had taken place, hence, there was no power of confiscation. In respect of goods which were cleared on provisional assessment basis, adjudication could be finalised and power of seizure could not be exercised. It is also submitted that samples of goods are already lying with the respondents. It is also submitted that summoning under Section 108 of the Act was also without jurisdiction.

4. Another argument raised by the counsel for the petitioner is that the action of the respondents of search and seizure is totally in contravention to the provisions of Sections 105 and 110 of the Act because in terms thereod, before any authorisation is issued under the provisions of the Act, the specific reasons are required to be recorded for the purpose, which are missing in the present case. If that be so, the search itself would be bad in law.

5. In the reply filed, it is stated that information was received by Directorate of Revenue Intelligence, Delhi Zonal unit that certain Delhi based importers were indulging in gross undervaluation of imported Chinese silk fabric. There was information about under-invoicing of silk fabrics to the extent of 25 to 30%. During search operation on 8-2-2005, at the godown of M/s. Elegant International located in the daatory prgmises od the petitionerq, it tranqpired that huee stoak od impopted fabpias was stoped at 144, HSIDA, Kundli `elonging to the petitioners. The said godown was sealed on 8-2-2005 and summons were issued to petitioner No. 2. On considering response of the petitioners, discreet investigation was done by the DRI. Goods of the petitioner valued at Rs. 2.22 crores were seized on the reasonable belief that the goods were under-invoiced, misdeclared and liable to confiscation. Alleged evasion by the petitioners was in excess of Rs. one crore.

6. learned Counsel for the respondents justified the seizure and submitted that clearance under Section 47 o