TMI Blog2020 (10) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... taken out from the bags appeared to be of a foreign origin. The ''Areca Nuts' were shown to the local businessman and on the basis of their experience, they said that the ''Areca Nuts' appears to be of foreign origin. Thus, on these three grounds, the action for seizure was initiated. It is well settled that the ''reasons to believe' must be based upon acceptable materials, which have to be more than a moon shine. The material on record overwhelming suggests that the ''reasons to believe' were based upon the opinion of the local dealers, prima facie examination of the goods by naked eye and inscriptions in foreign language on some bags. We are not inclined to accept the reasons given for forming a belief for exercise of power of seizure are valid in law. The said reasons even fail the test of ''wednesbury principles' as no reasonable person can reach to conclusion of the country of origin of ''Areca Nuts' by mere perusal from naked eye as well as the opinion of the traders, as the Institutes as well as the Ministry have firmly opined that the country of origin cannot be traced by any laboratory method also. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are registered under the G.S.T. Act. After purchasing the said betel nuts from the said Neelkamal Saha, the petitioners transported the said goods to the consignee M/s Jagdamba Enterprises through Truck No. DL01 GC-1731 owned by the petitioner no. 2 and the goods were sent alongwith requisite E-Way Bill Invoices etc. It is further stated that the goods were valued for the total consignment value of ₹ 29,56,800/-. As soon as the Truck carrying the betel nuts entered the State of Uttar Pradesh, the respondent no. 3 intercepted the said Truck and vide Panchnama dated 17.8.2020, seized the goods as well as the vehicle i.e. Truck No. DL01 GC-1731. A copy of the Panchnama is on record as Annexure-3 to the writ petition. In the Panchnama on record, the Panches made a statement that on the request of the Excise Authorities, they agreed to act as Panch and after the interception of the Truck, the driver disclosed his name as Satendra Kumar, the Officers informed the Truck driver that they have received specific information that ''Areca Nuts' of foreign origin was being transported. On opening of the material being transported it transpired that some bags had inscriptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods which can be confiscated under Section 111 of the Customs Act. Section 111 of the Customs Act is quoted hereinunder:- 111. Confiscation of improperly imported goods, etc.--The following goods brought from a place outside India shall be liable to confiscation:-- (a) any goods imported by sea or air which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such goods; (b) any goods imported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the import of such goods; (c) any dutiable or prohibited goods brought into any bay, gulf, creek or tidal river for the purpose of being landed at a place other than a customs port; (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; (e) any dutiable or prohibited goods found concealed in any manner in any conveyance; (f) any dutiabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds it is essential to establish that:- (i) the goods were imported into India, and; (ii) the goods should be dutiable and that the imported duty has not been paid. He further argues that even assuming without accepting the contentions of the respondents, none of the conditions specified in Clause (a) to Clause (p) of Section 111 are made out in respect of goods brought by the petitioners within the territorial limits of India and being transported within the territorial limits of India and he further argues that there is no whisper or reason recorded by the respondents to come to a conclusion that the goods were being imported without payment of any duty. He thus argues that the goods could not be seized at the first instance itself in exercise of powers under Section 110 of the Customs Act. The next argument of counsel for the petitioners is that Section 110-A provides for provisional release of goods, documents and things seized pending adjudication. Section 110-A is quoted hereinbelow:- [SECTION 110A. Provisional release of goods, documents and things seized pending adjudication.--Any goods, documents or things seized under section 110, may, pending the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/2016-Cus. (AS)) dated 8.2.2017 stating that the Delhi High Court in a reasoned order has held that the Panch and statement by Panches (witness) cannot be taken to be an order passed by the proper Officer under Section 110 of the Customs Act and in terms of the said position in all the future cases following may be adhered to. The relevant part of the said Instruction No. 01/2017-Cus. (F. No. 591/04/2016-Cus. (AS)) dated 8.2.2017 is quoted hereinbelow:- - Whenever goods are being seized, in addition to panchnama, the proper officer must also pass an appropriate order (seizure memo/order/etc.) clearly mentioning the reasons to believe that the goods are liable for confiscation. - Where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. In such cases, investigations should be fast-tracked to expeditiously decide whether to place the goods under seizure or to release the same to their owner. In view of the said circular, Shri Agrawal submits that the same is binding on the Department, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the 4[Commissioner of customs ((Appeals)] in the exercise of his appellate functions.] Counsel for the petitioners further argues that along with request for provisional release, the petitioners had placed on record the letter dated 4th January, 2018 issued by the Department of Agriculture, Co-operation and Farmers Welfare, Government of India to the effect that the betel nuts cannot be conclusively determined upon examination of the naked eye with regard to its origin further It cannot be determined even through laboratory test whether the betel nuts are indiginous or are of a foreign origin and also to the effect that there is no mechanism available to test the country of origin of ''Areca Nuts'. He has also placed reliance on the letter issued by ICAR-National Bureau of Plant Genetic Resources (Independent Council of Agricultural Research) to the effect that it is not possible to determine the country of origin of betel nuts. Shri Shubham Agarwal has also placed reliance on the judgment passed by this Court in the case of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernative remedy of appeal against the order of provisional release, the writ petition is liable to be dismissed. Counsel for the petitioners in rejoinder states that the order of provisional release is liable to be interfered for the reason that the goods in question are ''Areca Nuts' and they have a limited shelf life and the appeal would take a long time to be decided and the goods being a perishable nature, the entire purpose is liable to be defeated. He further argues that when the basic conditions of seizure are non-existent and no Appeal lies against a seizure order, this Court should not hesitate in exercising its jurisdiction under Article 226 of the Constitution of India and thus, the argument of the counsel for the respondents that the writ petition is not maintainable in view of the alternative remedy, is liable to be rejected. He further argues that the order impugned has been passed contrary to mandate of Section 110-A and solely on the on the dictation of the Board through its circular, which itself is bad in law and violative of the powers conferred upon the Board under Section 151-A of the Customs Act. He further states that the valuation of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) held that writ jurisdiction should normally not be entertained without assigning any special reasons and that too without even granting opportunity to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The Court was dealing with the exercise of powers under Article 226 of the Constitution by the High Court against the proceedings initiated under Section 13 of the SARFAESI Act and relating to an interim order, the Court had also observed that there was no assertion that the grievance fell within the well defined exceptions to the exercise of jurisdiction under Section 226. The said judgment would not benefit the respondents solely for the reasons that in the present case, specific averments have been raised and argued which carved out the well known exceptions as recorded abovefor exercise of powers under Article 226 of the Constitution. The next judgment of the Supreme Court in the case of The State of Uttar Pradesh 7 Ors. v. M/s Kay Pan Fragrance Pvt. Ltd. (supra), the Supreme Court was seized of a matter whereby the High Court had entertained the writ petitions at the first instance itself without the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ICAR has also opined that without there being samples available from the country of origin, it was not possible to determine the country of origin of the seized ''Areca Nuts'. That being the definite opinion of the Deparment of Agriculture and Farmers Welfare as well as the ICAR, it is difficult to comprehend as to how on the basis of exmination by naked eye and the opinion of the traders can lead to forming an opinion that the goods in question namely ''Areca Nuts' are imported. Even otherwise there is nothing on record to form a belief that the goods in question were imported without payment of import duty (even if it is assumed for the sake of argument that the goods were of foreign origin). On the contrary, in the present case as demonstrated by the petitioner prima facie that the goods in question were purchased in an E-auction held by the Customs Authorities themselves within the territory of India, the fact that there was evidence in the form of transport documents to show that the goods were being transported within India, the prima facie ''reason to believe' recorded are unsustainable. It is well settled that the ''reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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