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TMI Blog2022 (6) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction, with out authority of law and against principles of natural justice and in violation of articles 14 and 19(1)(g) of the Constitution of India and provisions of Customs Act, 1962, notifications thereof, and provisions of Foreign Trade Policy and allow the goods to be further exported ; (ii) quashing the summons dated January 17, 2022 issued by respondent No. 1 and further directing respondent Nos. 1 and 2 not to conduct further investigation against the petitioner as the same was initiated without jurisdiction and without authority of law ; and (iii) directing respondent No. 1 to allow respondent Nos. 5 and 6/ banks to defreeze the bank account of the petitioner and pass such further orders in the interest of justice." 4. Before we deal with the above three prayers made, we may mention that at the pre-admission stage, respondent Nos. 1, 2 and 7 have filed counter- affidavit to which the petitioner has filed reply-affidavit. 5. Regarding prayer No. 3, stand taken in the counter-affidavit is that goods and services tax (GST) Commissionerate at Noida had issued letters to the banks of the petitioner, being respondent Nos. 5 and 6, to attach the accounts of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 against the authorised representative of the petitioner while responding to the summons. 11. We feel that the said order sufficiently protects the interest of the petitioner during the stage of investigation. 12. This brings us to the first prayer of the petitioner, i. e., release of the exportable goods of the petitioner being detained by respondent No. 1. 13. According to the petitioner, it is a manufacturer and supplier of handcrafted leather products and miscellaneous house-hold items. It is registered as Micro, Small and Medium Enterprise (M. S. M. E.). 14. Besides having G. S. T. registration, being an importer and exporter, it has Import and export code bearing No. AACCU5161D. 15. Upon receipt of purchase order from M/s. King Shine Global FZE, United Arab Emirates in the month of September, 2021 for supply of various handcrafted leather products and household items, petitioner supplied the goods to the Special Economic Zone (S. E. Z.). Such supply for exports are treated as "zero-rated" supply under the Special Economic Zone Act, 2005 and the Integrated Goods and Services Tax Act, 2017 (briefly, "the I. G. S. T. Act" hereinafter). Since the supply was made to respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissionerate at Noida has also initiated independent investigation into the business activities of the petitioner and, on the ground that there was non-cooperation by the petitioner, instruction s were issued to the concerned banks for attachment of bank accounts of the petitioner. 20. Though there is no averment in the counter-affidavit by the answering respondents as to seizure of the exportable goods, a panchnama dated February 9, 2022 has been annexed to the counter-affidavit. As per the panchnama, seizure had taken place on February 9, 2022 from 17 hours onwards in the premises of respondent No. 4. The panchnama records that the exportable goods of the petitioner were found in (667) cartons those were found to be grossly overvalued at Rs. 8.36 crores as against Rs. 1.76 crores, as per valuation report of the chartered engineer. The cartons had already been examined and inventorised by the officers of Directorate of Revenue Intelligence (D. R. I.). The panchnama records that the exportable goods of the petitioner contained in the (667) cartons appear to be liable for confiscation. The customs officers then informed that they intend to seize the said goods valued at Rs. 1.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under the Customs Act, he may seize such goods. 26. Section 113 of the Customs Act mentions the instances when exportable goods can be confiscated. 27. Before we advert to section 110A of the Customs Act which deals with provisional release of goods, etc., we may revert back to and briefly analyse the requirement of section 110 of the Customs Act. 28. Firstly, the seizure must be by the "proper officer", which is a defined expression under section 2(34) of the Customs Act. Secondly, the proper officer must have reason to believe that any goods are liable to confiscation under the Customs Act. If and only if the above two twin conditions are satisfied, the proper officer may resort to seizure of the goods. 29. Insofar, "proper officer" is concerned, we may refer to the decision of the Supreme Court in Canon India P. Ltd. v. Commissioner of Customs [2021] 16 GSTR-OL 1 (SC) ; [2021] SCC OnLine SC 200 which says that officials of the Directorate of Revenue Intelligence are not, and cannot be considered to be proper officer under the Customs Act. 30. At this stage, we may not labour much on *this point, inasmuch we have been informed at the bar that the seizure has been made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, section 110A was inserted in the Customs Act with effect from July 13, 2006. From a reading of the aforesaid provision, as extracted above, it is evident that any goods, documents or things seized or bank * account provisionally attached under section 110 may, pending the order of the adjudicating authority, be released to the owner or the bank account holder on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. Thus, this provision confers a right on the owner to seek provisional release of the seized goods, while at the same time, a corresponding discretionary power is vested on the adjudicating authority who may release the seized goods upon compliance of the conditions mentioned therein. 35. Courts have held that section 110A provides a pragmatic mechanism to facilitate provisional release of seized goods, etc., to the owner, pending adjudication, but at the same time, protecting the interest of the Revenue. 36. Insofar the present case is concerned, the petitioner had already made an application on January 18, 2022 before the respondent No. 1 for provisional release of the goods. At the time of making the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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