Customs - Sec 110A does not absolve or override provisions of Sec 110(2) - Though seized goods are released provisionally under Sec 110A, if no Show Cause Notice is issued within stipulated time under Sec 110(2), goods shall be returned: Delhi HC
By TIOL News Service
NEW DELHI, DEC 11, 2012: THE Petitioner is a Director of a private limited company, which is engaged in trading of imported and domestic cars. The petitioner imported a brand new Maserati car on 07-12-2010. The fifth Respondent (DRI) detained the Maserati car in terms of Section 110 of the Customs Act, 1962 under Panchanama dated 26.4.2011 and on the same day, handed it over to petitioner vide supurdarinama. The Commissioner of Customs extended the period for issuance of SCN for a further period of 6 months w.e.f 25.10.2011 under Section 110(2) ibid. On 09.05.2012, DRI, by Panchanama cancelled the supurdarinama and took possession of the Maserati car. Aggrieved by the above, the petitioner filed a Writ Petition before the High Court and sought direction for quashing of the Panchanama dated 09.05.2012 and consequent order releasing the Maserati car.
The Counsel for the Petitioner urged that upon expiry of the period of one year from the seizure of 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 and Harbans Lal v. Collector of Central Excise & Customs.
The Revenue Representative defended the Panchanama dated 9.5.2012 and contended that the car was released pursuant to a request made by the petitioner under Section 110A ibid. 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 SCN. 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). The revenue relied on the judgment reported as Jayant Hansraj Shah ( 2008-TIOL-212-HC-MUM-CUS ) 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.
This court notes that the only question which arises, for determination, in this Petition is whether after expiry of the period of one year, the seizure of the goods or articles would be deemed to lapse under Section 110, and whether the position would be the same, if a request for provisional or conditional release, under Section 110-A is acceded to before the expiry of the period of one year under Section 110.
The High Court, after examining the decisions of the Apex Court in the cases of ACC Vs. Charan Das Malhotra and J.K. Bardolia Mills, observed as -
It can be gathered from the above discussion that the provision of Section 110 (2) in so far as the prescription of a time limit for holding seized goods, is deemed mandatory; the consequence of not issuing a show cause notice within the period or extended period specified is clearly spelt out to be that the “goods shall be returned to the person from whose possession they were seized” (apparent from a combined reading of Section 110 (2) and its proviso). The corollary is not that the Customs authorities lose jurisdiction to issue show cause notice.
Now, such being the case, the question is if the customs authorities accede to a request to release the goods, under Section 110-A, would such event absolve or override the operation of Section 110 (2). It is to assert such a proposition that the respondents rely on the judgment of the Bombay High Court in Jayant Hansraj Shah. There, the request for release had been made within the period; however, the extended period of six months had not expired. From the above judgments, the position of law on the issue of effect of expiry of one year period (six months, if no extension is granted) after the seizure of goods etc under Section 110 of the Act when there has been no SCN under sub-clause (2) is amply clear. Upon expiry of the one year period (or six months, as the case may be) the goods are returnable to the person from whose possession they were seized.
It is well settled that when a provision of law enjoins the performance of any act, and further mandates, the consequences for non-performance, the condition is mandatory. Thus, the effect of the statute, by virtue of Section 110 (2), is that on expiration of the total period of one year (in the absence of a SCN) the seizure ceases, and the goods which are the subject matter of seizure, are to be released unconditionally. There is nothing in Section 110-A to detract from this consequence.
Finally, the High Court allowed the writ petition.
(See 2012-TIOL-986-HC-DEL-CUS)
