TMI Blog2016 (4) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... ionally to the petitioner and this will, however, not preclude the respondents from proceeding under Section 124 of the Act ad passing an adjudication order in accordance with law. - Decided in favour of petitioner - W. P. (C) 11641/2015 - - - Dated:- 6-4-2016 - S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mrs. Anjali J. Manish, Advocate For the Respondents : Mr. Rahul Kaushik, Senior Standing counsel with Mr. Bhavishya Sharma, Advocates ORDER Dr. S. Muralidhar, J. 1. The prayer in this writ petition under Article 226 of the Constitution of India is for a direction to Respondent No. 2, Deputy Commissioner of Customs (Beta), to unconditionally release the goods seized from the Petitioner. 2. The grievance of the Petitioner, M/s. Shiv Shakti Trading Company is that despite the imported goods (i.e. car accessories) [imported under bill of entry ( B/E ) dated 19th March 2015] being seized from it on 4th April 2015, and no show-cause notice ( SCN ) having being given to it under Section 110 (2) of the Customs Act 1962 ( Act ) for over six months thereafter, the seized goods have not been released to the Petitioner till date. 3. The plea of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) was unlawful. In the said decision, this Court referred to its earlier decision in Jatin Ahuja v. Union of India 2013 (287) ELT 3 (Del). Mrs. Manish also referred to the Circular Nos. 290/6/97-CX dated 20th January 1997 and 7/2013-Cus. dated 19th February 2013 issued by the Central Board of Excise and Customs ( CBEC ) to underscore that the SCN could be issued under Section 124 even after an unconditional release of goods under Section 110 (2) of the Act. 7. The running theme of the above submissions was that the importer cannot be worse off for having waived the right to be given a SCN under Section 124 (a) of the Act, in anticipation of the adjudication being expedited. In the present case not only was the SCN not given to the Petitioner within six months from the date of seizure, but there was no adjudication order either passed even a year thereafter. The net result was that the seized goods were illegally detained notwithstanding the expiry of one year after their seizure with neither an SCN being issued nor an adjudication order being passed. 8. Countering the above submissions Mr. Rahul Kaushik, learned Senior standing counsel for the Respondents, submitted that on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents or things which, in his opinion, will be useful for, or relevant to, any proceeding under this Act. (4) The person from whose custody any documents are seized under sub-section (3) shall be entitled to make copies thereof or take extract therefrom in the presence of a officer of customs. 124. Issue of show cause notice before confiscation of goods, etc.-No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person- (a) is given a notice in [writing with the prior approval of the officer of customs not below the rank of a Deputy Commissioner of Customs, informing] him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter: Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may at the request of the perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and their clearance duty free under the DES was illegal. Virgo also admitted to have sold the said material in the market contrary to the terms of the DES. A cheque for a sum of ₹ 50 lakhs was also enclosed to the said letter of Virgo notice as a token of their commitment. It was also stated by them that they do not want any show cause notice and personal hearing in the matter. 13.2 The Collector of Customs nevertheless proceeded to pass an order against Virgo demanding customs duty and penalty. Virgo's appeal allowed by the Customs, Excise Gold (Control) Appellate Tribunal holding that the non-issuance of SCN to Virgo under Section 28 of the Act had vitiated the proceedings initiated by the Collector of Customs. In the further appeal by the Customs Department, the Supreme Court observed that the requirement of issuance of notice under Section 28 of the Act is solely for the benefit of the individual concerned, therefore, he can waive that right. In other words, this Section casts a duty on the Officer to issue notice to the person concerned of the proposed action to be taken. This is not in the nature of a public notice nor any person other than the person again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act within six months from the date of seizure or within the extended period in terms of the proviso to Section 110 (2) of the Act. 17. The net result of the above discussion is that except where offences of serious nature or high stakes and/or legal questions are involved, it is permissible for the Customs Department to act upon the statement made under Section 108 of the Act waiving the right to be given a SCN under Section 124 (a) and have the adjudication proceedings expedited. Question (i) is answered accordingly. 18. Question (ii) is whether there is any corresponding obligation on the Customs Department to pass an adjudication order within a reasonable period and what is the consequence of the Customs Department failing to do so? This Court in Jatin Ahuja v. Union of India (supra) held that the effect of non-compliance with the provisions of Section 110 (2) of the Act would be that the seized goods would be released unconditionally to the person from whose possession the goods were taken. The Bombay High Court, in Jayant Hansraj Shah v. Union of India 2008 (229) ELT 339 (Bom) held that it was only where no order is passed for the provisional release of the seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the two Sections viz., 110 and 124 are independent, distinct and exclusive of each other, resulting in the survival of the proceedings under Section 124, even though the seized goods might have to be returned , or stand returned, in terms of Section 110 of the Act, after the expiry of the permissible period of seizure. 21. In the instant case, the stage of issuing the SCN has not been crossed. Even if it were to be taken that the Petitioner validly waived the right to be given an SCN, an adjudication order had to be passed within a reasonable time after the seizure. Here, not only has the initial period of six months after the date of seizure lapsed, but the next six months also has without any order having being passed in respect of extension of the period of six months for the reasons indicated in Section 110 (2) of the Act. Merely because there was a waiver by the Petitioner of the right to be given an SCN, it did not mean that the Respondents could indefinitely postpone the adjudication order without which the Respondents cold not have, in terms of Section 124 (a) proceeded to confiscate the seized goods. 22. The waiver by the Petitioner of the right to be given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the waiver, no adjudication order is passed within a period of six months of the seizure. In such event, it may still be open to the Department to issue an SCN before the expiry of six months, or within the extended period as envisaged in Section 110 (2) of the Act. In such event, it will be open to the Petitioner to avail the procedure under Section 110A of the Act to seek provisional release of the goods. 25. In the present case, despite the waiver by the Petitioner of the right to be given an SCN in terms of Section 110 (2) of the Act, no adjudication order was passed for a period of one year after the seizure. The Petitioner could, therefore, not be bound by such waiver after the expiry of the time limit under Section 110 (2) of the Act. In the circumstances explained hereinabove, there was no justification for the Respondents to continue to detain the goods seized. 26. The Court accordingly directs that the goods seized be forthwith released unconditionally to the Petitioner. This will, however, not preclude the Respondents from proceeding under Section 124 of the Act ad passing an adjudication order in accordance with law. 27. The petition is allowed in the above ter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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