Bombay HC sets aside seizure order which was passed without recording reasons to believe contravention

The Petitioner had contemplated to sell certain copper wire rods, etc. on high sea sale basis to the Original importer. Accordingly, two Bills of entry in respect of two consignments had been filed in the name of the Original importer. 

The said Importer subsequently declined to get purchase the imported goods on high seas, however agreed to co-operate in getting No Objection Certificate (NOC) and for substitution of the name of the Petitioner in the two BOE. A request was made for the amendment of the BOE, which was duly carried out. Subsequently, the DRI authorities seized the consignment of the Petitioner on the ground that certain provisions of Notification No.25/1999 – Customs 28.02.1999 had been contravened. Aggrieved, the Petitioner filed a Writ before the Bombay HC.

Referring to Section 110 of the Customs Act, the HC observed that if the proper officer has reason to believe that any goods are liable to confiscation under the Customs Act, he may seize such goods. Accordingly, the proper officer must have reason to believe that the goods in question are liable to confiscation under the Customs Act. Once the proper officer forms such a belief then he may seize such goods.

It was further observed that the expression 'reason to believe' is an expression of considerable import and in the context of the Customs Act, confers jurisdiction upon the proper officer to seize goods. The HC further observed that the belief has to be of the proper officer who had made the seizure. It cannot be that seizure is made by one officer and the reasons to believe are recorded by another officer. It was further observed that the proper officer who made the seizure must have reasons to believe that the seized goods are liable to confiscation. Seizure of goods is not an end in itself.

It was further noted by the HC that the Petitioner had not sought any concession or exemption or benefit under Notification No. 25/99 – Customs dated 28.02.1999. Accordingly, there could not have been any reason to believe that the said imported goods had contravened any of the provisions of section 111 dealing with confiscation and hence liable to seizure under section 110.

It was further remarked that the cancellation of amendment was not carried out by the authority which had allowed the amendment i.e., Customs authorities, Nhava Sheva, after due application of mind. It was carried out as per the direction of DRI, Zonal Unit, Ahmedabad. Such cancellation certainly resulted in adverse civil consequences upon the Petitioner who was the beneficiary of the amendment. It was further observed that without putting the Petitioner to notice and without giving an opportunity of hearing, the amendments could not have been unilaterally cancelled. Such cancellation of amendment would, therefore, be a nullity having no legal sanctity.

Basis the above observations, the HC set-aside the order for seizure of goods and directed for the release of the goods subject to the payment of the requisite duty and completion of necessary formalities.

Nikkom Copper and Conductors Private Limited vs. Union of India and Ors. [W.P. No. 3834 of 2020]

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