TMI Blog2004 (9) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... yle of M/s Sharda Plastic Industries at Raxaul in the district of Champaran. The unit is engaged in manufacture of Polythene bags and other plastic goods that are excisable commodities. The unit also holds a certificate of import and export issued by the Licensing authority, the Dy. Director General of Foreign Trade, Patna. Under the import and export licence the petitioner imports polythene carry-bags and other plastic materials manufactured in Nepal from different industrial units situate there. According to the petitioner, the imports are always made on payment of Dhansar to Nepal Customs and on the basis of Bills of Entry on payment of customs duty at Land Customs Stations in India through which the goods are imported. The goods thus imported are either sold directly at the office of the unit M/s Sharda Plastic Industries at Raxaul or those are sold through agents at different places in the country. Coming to the present consignment it. is stated that on 30.7.2003 the petitioner entered into an agreement to purchase Polythene carry-bags weighing 7000 Kgs @ ₹ 49/- per Kg from M/s Damodar Plastics Industries P. Limited, Tanki Sinwari, Morang in Nepal. Pursuant to the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the allegations made by the petitioner. This court would, therefore, discount the assertion being made by the petitioner that at the time of inspection by the customs officials, apart from the challan, a copy of the Bill of Entry too was produced by the driver of the bus. (3) The circumstances under which and the manner in which the seizure was made, as per the customs officials is stated in the notice issued to the petitioner on March 3/4, 2004. In paragraphs 2 and 3 of the notice it is stated as follows: 2. THE brief facts of the case is that on 11.9.2003 at about 5.45 hrs at Sarotar, Dhangarha, Khajuria Road, Motihari during the course of routine cheking of the Bus No. BR-29P-9521. 14 Bags weighing 290 Kgs (Net Weight) Polythene carrying Bags valued at ₹ 12,700/- (Rupees Twelve thousand seven hundred) only were found in the Dikki of aforesaid Bus and on being challenged, the Driver and Khalashi of the said bus stated that they were authorised by M/s Sharda Plastic Industries, Raxaul to carry these goods for its delivery at Siwan to Shri Lallan Prasad of Siwan and the owner of M/s Sharda Plastic Industries, Raxaul had given them paper of importation from Nepal th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers at the time of checking. THE customs officers were further told that the petitioner used to send/transport those polythene carry-bags in almost all buses going to Siwan by simply handing them over to the bus staff on payment of fare. For this consignment he has paid ₹ 140/- as fare. (iii) THE bus staff produced the challan under which the seized consignment was sold to Lallan Prasad of Siwan. A photostat copy of the challan is annexure 8 to the writ petition. THE customs officials, however, were not shown a copy of the bill of entry under which the consignment was imported into this country. (iv) THE bundles did not appear to be legally imported because on examination by the customs officials those were found to be without any identification mark and name of importer. (v) The customs officials came to the reasonable belief that the plastic carrybags valued at ₹ 12,700/- were brought into India in contravention of G.O.I. notification no. 9/96-Cus., dated 22.1.1996 issued under section 11 of the Customs Act, 1962 read with section 3 of the Foreign Trade (Development Regulation) Act, 1992. Mr. Ganpati Trivedi, counsel appearing for the petitioner strongly assai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,700/- were brought into India in contravention of G.O.I. notification no. 9/96-Cus., dated 22.1.1996 issued under section 11 of the Customs Act, 1962 read with section 3 of the Foreign Trade (Development Regulation) Act, 1992. Mr. Ganpati Trivedi, counsel appearing for the petitioner strongly assailed the seizure on admitted facts and circumstances, as enumerated above. Learned counsel submitted that section 110 of the Customs Act empowered the proper officer to seize the goods provided he had reason to believe that the goods were liable to be confiscated under the Act. He further submitted that it was well established by judicial pronouncements that the expression reason to believe indicated a mental state far more well-founded and substantial than suspicion, how-so-ever strong and it also did not mean purely a subjective satisfaction on the part of the authority (Narayanappa vs. I.T. Commissioner, A.I.R. 1967 S.C. 523: Pratap Singh vs. Director of Enforcement FER Act, 1985 S.C. 1989: Ganga Saran Sons vs. I.T. Officer, A.I.R. 1981 S.C. 1363). Mr. Trivedi submitted that non-production of the bill of entry, as claimed by the officers effecting seizure might have give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady given rise to a confiscation proceeding, he relied upon a decision of this court in Bikaner-Assam Road Lines INdia Limited and Ors. vs. Union of INdia and Ors., 2000(1) PUR 135. Mr. Ravi Ranjan further submitted that the existence of a reasonable belief in the mind of the officer effecting seizure was not justifiable and this court could not substitute its own view in place of the opinion formed by the officer effecting seizure. In support of the submission he relied upon a Supreme Court decision in State of Gujrat vs. Mohanlal Jitamalji Porwal Anr., AIR 1987 SC 1321. He further submitted that samples from the seized polythene bags were sent for laboratory test and the test-memo, showed that the thickness (in microne) of the seized polythene bags varied between 7.5 to 10 micrones. He then invited my attention to the rules called the Re-cycled Plastic Manufacture Usage Rules, 1999 framed under the provisions of the Environment (Protection) Act, 1986 and published in the official gazette on 2.9.1999. These rules prohibit the use of plastic carry-bags of thickness less than 20 micrones. On the basis of the test report he submitted that the seized consignment was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized betal nuts were directed to the competent authority under the Act. But it is significant to note that even in that decision this court directed for the release of the truck without referring its owner to the confiscation proceeding that was pending with regard to the truck as well. Coming now to the second point regarding the justiciability of the reasonable belief formed by the officer effecting seizure, on this issue the Senior S.C, C.G. relied upon the Supreme Court decision in Mohanlal Jitamalji (supra). That reported case is entirely different from the facts of the case in hand. In the case before the Supreme Court the seized article was a waistchain (Kandora), weighing 820 grams and made of pure gold. It was coated with mercury so as to give an appearance of being made of silver. The court observed that it was obviously a deceitful device to evade the law. The Supreme Court took note of three circumstances on the basis of which the Customs Officer entertained the reasonable belief that the article was a smuggled one viz: (1) On the basis of the prior information he was alert and was on the look out, watching the movements of respondent no. 1. (2) The chain whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 66 of Gold (Control) Act, 1968 and so on. In Calcutta Discount Col. Ltd. vs. Income Tax Officer (AIR 1961 Supreme Court, 372), a case under section 34 of the Income Tax Act, 1922 corresponding to section 147(a) of the Income Tax Act, 1961, the Apex Court held: The expression 'reasons to believe' postulates belief and the existence of reason for that belief. The belief must be held in good faith; it cannot be merely a pretence. The expression does not (sic) purely subjective satisfaction of the Income Tax Officer. In Sheonath Singh vs. Appellate Assistant Commissioner of Income Tax (Central) Calcutta (AIR 1971 Supreme Court 2451) it was held that the words reason to believe suggest that the belief must be of an honest and reason- able person based upon reasonable grounds and the officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. It was further held that if the officer concerned acts on material which is irrelevant then he acts without jurisdiction. 23. There can be no doubt that while considering the question as to whether the officer had reason to believe that the goods are contraband and liable to confiscation an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent for testing were seized from the premises of Sharda Plastic Industries on 15.1.2004/22.1.2004. Senior S.C.C.G. sought to explain that after the seizure of the two bundles from the bus a raid was made at the premises of the petitioner unit and from there samples were taken from the imported consignment of which the seized goods were admittedly a part and the polythene carry-bags from the larger consignment had failed the test of thickness. ( 9. ) It is not needed to go into the question regarding the propriety of the way in which samples were sent for testing because it is well settled that a seizure cannot be justified on the basis of facts subsequently coming to light. Section 110 of the Customs Act is very clear. IT provides, in so far relevant for the present, as follows: If the proper officer' has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods. The belief that the goods are liable to confiscation is to be formed, therefore, on the basis of reasons available at the time of seizure. In this case the officer, effecting seizure professed to have the reasonable belief that the polythene carry-bags were brou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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