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TMI Blog2021 (5) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... r direction under Article 226 of the Constitution of India quashing and setting aside the Seizure Memo dated 28.8.20 issued by the 5th Respondent operating under the aegis of the First Respondent and hold and declare that the proceedings of seizure and detention pertaining to the said memo are illegal; (b) this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ or order or direction under Article 226 of the Constitution of India ordering and directing the Respondents themselves, their officers, subordinates, servants and agents to release the goods of the Petitioner covered under Shipping Bill No.4245853 dated 3.8.20 and permit the same to be exported duty free as per the LeT export order No.39/94 issued by Central Board of Indirect Taxes and Customs; (c) this Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ or order or direction under Article 226 of the Constitution of India quashing and setting aside the Provisional Release letters dated 24.8.20 and 28.8.20 issued by the 4th and 2nd Respondents respectively with consequential relief of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat petitioner is the proprietory concern of it's sole proprietor Mr. Mahadev Bhosale having its office at Ghatkopar (West), Mumbai. Petitioner is registered under the customs laws and holds an importer exporter code (IEC). Petitioner is engaged inter alia in the business of export and domestic sales of information technology and electronic products. Petitioner is a taxable person and holds Goods and Services Tax (GST) registration. 4. On 23.07.2020 petitioner received a purchase order from a company based in United Arab Emirates called M/s. Octagon International for supply of 5000 units of 'HP V190 18.25' LED Monitor 2NK17A7 (for short and for convenience "LED Monitors" hereinafter) at an unit price of 45 USD. The total value of the purchase order was 225000 USD. 5. On 29.07.2020 petitioner received advance payment of Rs. 1,67,94,767.00 in connection with the above export order. 6. Petitioner procured the items to be exported from M/s. Connect Info Solutions on 31.07.2020 for which supply invoice was raised upon the petitioner by the supplier M/s. Connect Info Solutions. Petitioner raised GST invoice on the same day for the said transaction carrying IGST payment of Rs. 19,98,95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt consignment. 11. It is stated that owing to financial constraints, petitioner was not in a position to furnish bank guarantee for the purpose of provisional release. However, petitioner sent a formal request vide email dated 25.08.2020 to the respondents seeking release of the goods. 12. Notwithstanding such request the subject goods were seized under section 110(1) of the Customs Act, 1962 vide seizure memo dated 28.08.2020 issued by one Shri. Rajendra Singh, Intelligence Officer, Headquarters Intelligence Unit, Rummaging and Intelligence Division, Mumbai. As per the seizure memo, from an analysis of the data on record, it was suspected that petitioner was trying to export the consignment to avail undue export benefits and in contravention of the Customs Act, 1962. Therefore, the consignment was put on hold and examined under Panchnama dated 13.08.2020. In the course of examination, it was found that the cartons/packages containing the exportable goods were having misleading marking/labelling. It was noticed that the exportable goods in fact were imported to India from China by M/s. HP India Sales Pvt. Ltd., Bangalore as an exempted item. Pending investigation into possibilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re found classified under incorrect customs tariff heading declaring the LED Monitors as "TV" for claiming IGST at 28%. Secondly, even the mandatory BIS mark for import of IT products remained printed on the packages/cartoons. On the back of the monitors, 'Made in China, K-tronics (Suzgiy) Technology Co. Ltd.' was engraved. 16.2. In the course of investigation, it was revealed that the goods were originally imported by M/s. HP India Sales Pvt. Ltd., Bangalore vide bill of entry No.6783433 dated 06.02.2020 under customs tariff heading No.85285200. The importer i.e. M/s. HP India Sales Pvt. Ltd. had also availed exemption granted vide notification No.24/2005 dated 01.03.2005. It was also revealed in the course of investigation that M/s. HP India Sales Pvt. Ltd. had imported the computer monitors under CTH No.85285200 vide bill of entry No.6783433 dated 06.02.2020. Without putting the said imported goods to use, M/s. HP India Sales Pvt. Ltd. had sold it under invoice to M/s. Rashi Peripherals Pvt. Ltd.. 16.3. It is thus stated that the consignment covered under shipping bill No.4245853 dated 03.08.2020 originally imported vide bill of entry No.6783433 dated 06.02.2020 by M/s. HP Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.1. Referring to section 113(i) of the Customs Act, 1962, it is submitted that there is no mis-declaration to justify seizure. The term misdeclaration pre-supposes that it is a deliberate or artificial or illogical declaration and not a contestable declaration. Section 113(i) would apply when goods do not correspond in value or any material particulars made under the Customs Act, 1962. 17.2. It is submitted that respondents had admitted to 18% IGST earlier on four occasions i.e. when the goods were imported by M/s. HP India Sales Pvt. Ltd.; when the goods were sold by M/s. HP India Sales Pvt. Ltd. to the petitioner; when the petitioner's shipping bill No.4311172 dated 06.08.2020 for 1683 items were cleared without any dispute; and when the subject consignment vide shipping bill No.4245853 dated 03.08.2020 for 3317 items were cleared by issuing let export order. 17.3. Thus, there is duty implication only under IGST which had been paid by the petitioner who is now claiming the refund. 17.4. In so far the action of seizure is concerned, petitioner has referred to section 110 of the Customs Act, 1962 and submits that the said provision uses the word "may" and not the word "shall". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is likely prejudice to the revenue. In any case, provisional refund cannot be withheld. In this connection, reliance has been placed on rule 91(2) of the Central Goods and Services Tax Rules, 2017. 18.3. It is submitted that section 111(o) of the Customs Act, 1962 would not apply to the case in hand as the petitioner had not imported any goods duty free without satisfying any post import condition. Petitioner is an exporter who had purchased the goods originally imported from China by M/s. HP India Sales Pvt. Ltd. after five stages of trading. No action was taken against M/s. HP India Sales Pvt. Ltd.. Therefore, there cannot be any seizure in respect of a trader who is downstream in five stages of trading. In any case, there is no violation of section 113(i) of the Customs Act, 1962. The value was correctly declared and that was why let export order was issued for clearing the said consignment. That apart, section 110 of the Customs Act, 1962 provides a discretionary power upon the proper officer to make seizure, but before doing that he must have reason to believe that such goods are liable for confiscation. Finally, learned counsel for the petitioner submits that responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containing the goods were having misleading marking/labelling. It was also noticed that the goods were imported in India from China by HP India Sales Pvt. Ltd., Bangalore (as per the sticker/marking on the items and packages. It is to be noted here that the items being LED monitor, appear to be imported under exemption of BCD, pending investigation into possibility of duty evasion, the same are liable to confiscation under Section 111(o) and 113(i) of the Customs Act, 1962. Therefore, in exercise of powers conferred on me under Section 110(1) of the Customs Ac,t 1962, I, Rajendra Singh, Intelligence Officer, HQUI, R&I, NCH, Ballard Estate, Mumbai-400 001, hereby seize the above said consignment, and hereby direct the exporter M/s Mbility Services (IEC AEQPB2212P) and JWR CFS, NhavaSheva, the present custodian of the said goods, to not to remove, part with, or otherwise deal with the said goods except with the permission of the Joint Commissioner of Customs (P), HQIU, R&I, Mumbai. Sd/ Rajendra Singh IO/HQIU, R&I, Mumbai" 22. From a perusal of the seizure memo, it is seen that according to the Intelligence Officer on an analysis of the data on record it was suspected that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second proviso, in a case where any order for provisional release of the seized goods has been passed under section 110A, the specified period of six months shall not apply. As per sub section (5), the proper officer for the purpose of protecting the interest of revenue or for preventing smuggling may provisionally attach any bank account for a period not exceeding six months which period may be extended for further six months by the Principal Commissioner of Customs or by the Commissioner of Customs for reasons to be recorded in writing. 24. Section 110A provides for provisional release of seized goods amongst others pending adjudication. 25. We have already noticed that when seized goods are provisionally released under section 110A, the prescribed period of six months as provided in sub section (2) of section 110 would not be applicable. 26. From a reading of section 110, more particularly sub section (1) thereof, it is discernible that seizure is not an end in itself. Seizure can be made only if the proper officer has reason to believe that any goods are liable to confiscation under the Customs Act. Thus, a discretionary power is vested upon the proper officer to seize such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial particular with the entry made under this Act or in the case of baggage with the declaration made under section 77; * * * *" 30. Petitioner has contended that section 113(i) is not at all attracted in the facts of the present case as there is no discrepancy in respect of value or in any material particular. 31. As per section 122, in every case under Chapter XIV in which anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged without limit by a Principal Commissioner of Customs or Commissioner of Customs or a Deputy Commissioner of Customs; and up to such limit by such officers, as the Central Board of Indirect Taxes and Customs may by notification specify. 32. The adjudication procedure is dealt with in section 122A which ensures that principles of natural justice are duly complied with in such adjudication process by giving opportunity of hearing to the concerned party. Section 123 deals with burden of proof. 33. Section 124 provides for issue of show-cause notice before confiscation of goods etc.. It says that no order confiscating any goods or imposing any penalty on any person shall be m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time has elapsed. Therefore, it would be in the interest of justice if the same is adjudicated early. We are further of the view that having regard to the contrary stands taken by the contesting parties, which may require adjudication on facts, it would be just and proper if the impugned seizure is adjudicated by the adjudicatory authority. Since the question as to whether section 111(o) and section 113(i) may require adjudication on facts, we therefore deem it fit and proper to relegate the petitioner to the forum of adjudicatory authority for a decision on the validity or otherwise of the impugned seizure and the consequential fall out. 37. Having regard to the above, it would not be necessary to deal with the challenge to the two circulars dated 02.08.2005 and 04.01.2011. Likewise it would not be necessary to deal with the prayer for refund, which would be subject to outcome of the adjudication. 38. Accordingly and in the light of the above, we direct that the jurisdictional Principal Commissioner of Customs may authorize an appropriate officer of the customs department to adjudicate on the impugned seizure memo dated 28.08.2020 and the consequences which would follow by issua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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