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1989 (5) TMI 60 - SC - CustomsWhether the Collector is bound to issue notice to the persons from whose possession the goods are seized and to give him an opportunity to make his representation on the point whether the time for issuing notice under Section 124(a) of the Act should be extended beyond six months/ Held that - The person from whose possession the goods have been seized is entitled to notice of the proposal before the Collector of Customs for the extension of the original period of six months mentioned in Section 110(2) of the Customs Act, and he is entitled to be heard upon such proposal but subject to the restrictions referred to earlier in regard to the need for mentioning confidentiality of the investigation proceedings. Appeal is allowed accordingly and to the extent set forth in our judgment orders of the High Court are modified
Issues Involved:
1. Legality of the seizure of goods under the Customs Act, 1962. 2. Validity of the extension of time for issuing a show cause notice under Section 110(2) of the Customs Act, 1962. 3. Requirement of notice to the owner before extending the time for issuing a show cause notice. 4. Right of the owner to the return of goods if the show cause notice is not issued within the stipulated time. Detailed Analysis: 1. Legality of the seizure of goods under the Customs Act, 1962: The Customs authorities conducted a raid on 5th May 1966 and seized typewriters, adding, and calculating machines from the premises of M/s. Typewriters and Stationery Operation Private Limited. The seizure was based on information that the goods were imported illegally. Section 110(1) of the Customs Act, 1962 provides that if the proper officer has reason to believe that any goods are liable to confiscation under the Act, he may seize such goods. The seizure was deemed legal as the proper officer had a reasonable belief that the goods were liable to confiscation. 2. Validity of the extension of time for issuing a show cause notice under Section 110(2) of the Customs Act, 1962: The goods were seized on 5th/7th May 1966, and notices were due to issue under Section 124(a) within six months. The Additional Collector granted an extension of time for a further six months on 3rd November 1966. Section 110(2) provides that if no notice is given within six months, the goods must be returned to the person from whom they were seized. The proviso to Section 110(2) allows the period to be extended by the Collector of Customs for a period not exceeding six months on sufficient cause being shown. 3. Requirement of notice to the owner before extending the time for issuing a show cause notice: The High Court held that the order of extension under Section 110(2) was quasi-judicial and required notice to the owner of the goods. The Supreme Court affirmed that the person from whose possession the goods were seized is entitled to notice of the proposal before the Collector of Customs for the extension of the original period of six months. The Court emphasized that the right to notice flows from the potential prejudice to the owner's right to immediate restoration of the goods upon the expiry of six months from the date of seizure. 4. Right of the owner to the return of goods if the show cause notice is not issued within the stipulated time: If the notice is not issued within six months, the person from whose possession the goods were seized becomes immediately entitled to the return of the goods. The Court noted that ordinarily, the owner would be entitled as of right to the restoration of the seized goods upon the expiry of six months unless an extension is granted. The failure to communicate the extension order to the respondents before the expiry of six months rendered the extension invalid, and the respondents were entitled to the return of the goods. Conclusion: The Supreme Court held that the person from whose possession the goods have been seized is entitled to notice of the proposal for extending the period under Section 110(2) of the Customs Act. The appeal was allowed, and the orders of the High Court were modified to the extent set forth in the judgment, with no order as to costs.
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