TMI Blog2009 (12) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... - Since the period of six months has already expired, therefore, the detention Memo, dated 22-1-2009 (P-2), order of seizure dated 20-2-2009 (P-6) and order of confiscation of case dated 9-6-2009, under Section 111 read with Section 2(22) and 2(39), 120 and 121 of the Act (P-7) are also quashed. - 16077 of 2009 - - - Dated:- 22-12-2009 - M.M. Kumar and Sabina, JJ. REPRESENTED BY : Shri Jagmohan Bansal, Advocate, for the Petitioner. Shri Gurpreet Singh, SSC, (Indirect Taxes), for the Respondent. [Order per : M.M. Kumar, J.]. This petition filed under Article 226 of the Constitution challenges orders dated 22-1-2009, 20-2-2009 and 9-6-2009 (P-2, P-6 P-7), passed by the Directorate of Revenue Intelligence, Ludhiana, detaining/seizing 5400 Kgs. yarn and cash of Rs. 4.2 lacs of the petitioner. A further prayer has also been made for directing the Additional Director, Directorate of Revenue Intelligence-respondent No. 2 to defreeze the bank account and D-Mat account of the petitioner; and allow it to withdraw funds therefrom. 2. The case of the petitioner is that it used to import various types of yarn from China and sell the same as such or after converting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to consider the price of their last import of 100% nylon yarn. In that regard it showed its willingness to furnish bank guarantee and bond equal to difference between their last declared value and value assessed by DRI (P-8 P-9). 6. On 15/16-7-2009, the Additional Director General, DRI, New Delhi, issued a show cause notice. In para 7 of the said notice it has been mentioned that the investigation could not be completed within the stipulated period of six months and, therefore, show cause notice proposing confiscation of seized goods and currency under Section 124 of the Act as provided in Section 110(2) of the Act, cannot be issued within the stipulated period of six months in case of seizure of goods. Accordingly, the petitioner was called upon as to why the period of six months may not be extended by another six months for the purpose of issuing a show cause notice under the proviso to Section 110(2) of the Act. In para 9 of the said notice, the petitioner was asked to appear for personal hearing on 20-7-2009 at 11.00 a.m. before the Commissioner of Customs, Amritsar (P-10). The aforementioned show cause notice was served upon the petitioner on 16-7-2009. 7. On 20-7-2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which date the counsel for the petitioner appeared and requested for supply of documents and some time. On 21-7-2009, the period of six months expired but the respondent did not serve any order extending the period in terms of proviso to Section 110(2) of the Act. Therefore, the respondent is bound to return the seized yarn as well as cash. In that regard reliance has been placed on the Division Bench judgment of this Court rendered in the case of M/s. Abhaas Spinners Private Limited v. Union of India and Others (CWP No. 7972 of 2009, decided on 23-9-2010). 10. In the return filed in the shape of affidavit on behalf of the respondents in the Court today, it has been stated that the DRI, Ludhiana, had the reports that some unscrupulous importers of various types of yarn were indulging in evasion of Customs Duty by mis-declaring the value and description of the yarn imported by them from China and Singapore. In that regard various searches were conducted by the DRI on 5-11-2007 on the premises of various Import firms located at Ludhiana as well as their hawala operators indenter-cum-agents of the Chinese suppliers through whom they were importing yarn. As a result of the said se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2009 with regard to detained cash of Rs. 4.20 lacs. However, vide letter dated 29-5-2009, Shri Sandeep Jalota has changed his version and claimed that the cash belongs to his father and mother. There is, thus, reasonable belief that the amount in question belongs to the sale proceeds of undervalued imported yarn, which were not accounted for in the prescribed books of accounts and liable for confiscation under Section 111 read with Section 2(22), 2(39), 120 and 121 of the Act. 13. With regard to non-supply of the order extending the period of issuance of show cause notice in respect of seized goods by another six months under proviso to Section 110(2) of the Act, while referring to the provision of Section 110(2) it has been stated that the said Section does not stipulate any time limit within which the Custom Authorities are legally bound to communicate the order to the petitioner. It has been admitted that the order extending the period of issuance of show cause notice was passed on 21-7-2009 by the Commissioner and the same was despatched to the petitioner on the same day by ordinary post. 14. Regarding non-supply of documents it has been asserted that it has no relevancy f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edington India Limited v. Commissioner of Customs (Appeals), Chennai, 2007 (212) E.L.T. 187 (D.B. Mad.), the Division Bench answered the aforementioned questions in favour of the petitioner in M/s. Abhaas Spinners Private Limited case (supra). 17. We are of the considered view that the instant petition is squarely covered by the Division Bench judgment rendered in M/s. Abhaas Spinners Private Limited case (supra). Like in the present case, in that case also a notice in terms of Section 124(c) of the Act was issued on 15-7-2009 to the petitioner to provide a reasonable opportunity of being hear, which stipulated a week s time. It was received by the petitioner on 16-7-2009 and a period of one week was to expire on 23-7-2009. The petitioner was to appear on 20-7-2009 when it has requested for supplying copies of the documents. However, the order was passed on 20-7-2009 itself. Like in the earlier case, it has to be held in this case as well that the opportunity to make representation within the meaning of Section 124(c) of the Act has been rendered illusory as the order has been passed prior to the expiry of seven days and no effective opportunity of hearing has been afforded. 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