Provisional release of smuggled goods.

PJ/CASE LAW/2015-16/3009

Case:SHEIK MOHAMMED RAFIQUE AHMED versus JT. /ADDL. C.C., AIRPORT, CHENNAI

Citation:2016 (331) E.L.T. 337 (Mad.)

Brief Fact: In this writ petition, the Petitioner prayed for a direction to the respondent to release the seized imported goods under the mahazar dated 7-9-2014.
The case of the petitioner is that he is a native of Nasik, Maharashtra. The petitioner returned from Sharjah to Chennai via Trivandrum by Air India Flight on 7-9-2014. The petitioner was carrying with him, gold chains of 18 carat, two bangles of 24 carat purity, 12 kg of saffron, RMD kutka, Gudang Garam Cigarette cartons, perfumes and two samsung mobiles. At Trivandrum, the Officer of the Directorate of Revenue Intelligence, Trivandrum conducted a search in the baggages of the Petitioner. Thereafter, at Chennai Airport, the said goods were seized under mahazar dated 7-9-2014 on the ground that the Petitioner smuggled the said goods by concealing the same in his baggages. Thereafter, a statement was recorded from the petitioner against his will on 8-9-2014 to the effect that the petitioner attempted to take out the same through Green Channel, without payment of duty. The petitioner sent representations dated 10-9-2014 and 15-9-2014. A further statement was recorded from the petitioner on 2-12-2014. Thereafter, the petitioner sent another representation dated 4-12-2014. On completion of the investigation, a show cause notice dated 5-3-2015 in terms of Section 124 of the Customs Act, 1962 was issued, proposing as to why the seized goods should not be confiscated and penalty should not be imposed. To the said show cause notice, the petitioner sent a reply dated 23-3-2015, refuting the allegations and again, the petitioner sent a representation dated 26-6-2014 seeking release of the seized goods. Since there was no action on the part of the respondent, this writ petition has been filed for the relief as stated above.

The respondents filed a counter affidavit, wherein it is stated that all the relevant travel documents viz. boarding pass, customs declaration form, e-ticket, etc., were scrutinized by DRI. On scrutiny, it was found that against the column ‘total value of the dutiable goods carried’ by him, it was mentioned as ‘nil’. On enquiry by DRI as to whether he is in possession of any dutiable goods or foreign origin gold, the petitioner replied in the negative. The DRI examined the hand baggage and recovered 480 nos. of saffron packets each weighing 25 gms. i.e. a total of 12 kg of saffron. A show cause notice dated 5-3-2015 was issued and personal hearing was fixed on 5-9-2015. The petitioner had smuggled the goods into India without declaring the same to the customs in order to evade payment of customs duty and hence, the goods were seized, since the goods were liable for confiscation under Section 111(d) and (l) of the Act.

Appellant contention:  The learned counsel for the petitioner contended that the seized goods are neither prohibited nor restricted and they could be brought as part of baggage and that as per Section 110A of the Customs Act, 1962 read with Customs (Provisional Duty Assessment) Regulations, 2011, which are categorical and clear in terms, provisional release ought to have been made, pending adjudication on furnishing bond and security and that in any event, the goods are to be released on payment of appropriate duty and relied upon the decision of the Hon’ble Supreme Court reported in 2011 (269) E.L.T. A146 (S.C.) (Commissioner v. Navashakti Industries P. Limited).

Respondent contention:On the other hand, the learned senior standing counsel for the respondent reiterated the averments made in the counter affidavit and supported the impugned order, by contending that the goods in question were seized under the relevant provisions of the Act and that the adjudication is under process and the petitioner can agitate his grievance during the personal hearing and therefore, prayed for dismissal of this writ petition.

Reasoning of Judgment:The hon’ble high court have considered the aforesaid submissions and perused the materials available on record.

It is manifested from the records that the DRI, Chennai Zonal Unit, on specific intelligence, had intercepted the petitioner at Anna International Airport, Chennai, and on enquiry, it was revealed that the petitioner was coming from Sharjah via Trivandrum. On scrutiny of the Customs Declaration form by DRI, it was found that against the column, ‘total value of dutiable goods carried’ by him, it was mentioned as ‘Nil’. On enquiry by DRI as to whether he is in possession of any dutiable goods or foreign origin gold, he replied in the negative.

Thereafter, the DRI had examined the hand baggage and recovered 480 nos. of saffron packets each weighing 25 gms, totalling 12 kgs of saffron. Then the DRI officers had examined the two checked-in-baggages and found to contain RMD Gutka Sachets pakced in 8 black coloured checked polythene bags, perfumes and four cartons of Gudang Garam Cigarette of Indonesian origin. Then the DRI officers had seized the gold chains, gold bangles, RMD Gutka, Samsung Mobile phones and Iranian saffron, which were totally valued at Rs. 31,41,125/-, under a mahazar on 17-9-2014. After the completion of the investigation, a show cause notice, dated 5-3-2015 was despatched. Now the adjudication is under process.

It is vehemently contended by the learned Senior Standing Counsel appearing for the respondent that since the passenger had attempted to smuggle the goods into India by concealing the same in his person as well as in his hand baggage and checked-in-baggage, without declaring the same to the Customs, in order to evade the payment of Customs duty, the aforestated goods are liable for confiscation under the provisions of Section 111(d) and 111(l) of the Customs Act, 1962 and hence, it cannot be released provisionally under Section 110 of the Customs Act, 1962 as contended by the learned counsel for the petitioner.

Further, the learned Senior Standing Counsel has contended that when the cargo/goods are imported and the Bill of Entry is filed based on the importer’s IEC Code, the question of provisional release would arise, but in the instant case on hand, the provisions of Baggage Rules alone would be applicable.

As rightly contended by the learned Senior Standing Counsel, the petitioner had attempted to smuggle the aforesaid goods into India only with an intention to evade payment of Customs duty and in the absence of any contention refuting the same from the learned counsel for the petitioner, this Court is of the view that the goods confiscated under Section 111(d) and 111(l) of the Customs Act, 1962, cannot be released provisionally as sought for by the petitioner.

Further, when the goods were confiscated under Section 111(d) and 111(l) of the Customs Act, 1962, the question of provisional release under Section 110 of the Customs Act, 1962 does not arise. Therefore, the Court is of view that only after the completion of adjudication process, the adjudicating authority would decide whether the goods confiscated under Section 111(d) and 111(l) of the Customs Act, 1962, could be released or not.

Accordingly, the respondent, who is the adjudicating authority, is directed to complete the adjudication, after affording an opportunity of personal hearing to the petitioner, within a period of eight weeks from the date of receipt of a copy of this order. The petitioner shall cooperate with the adjudicating authority to complete the adjudication as afore stated.

For the foregoing reasons, the writ petition is liable to be dismissed and accordingly, the same is dismissed.

Decision:  Petition dismissed.

Comment:The substance of the case is that the petitioner had attempted to smuggle the goods in to India in order to evade the payment of custom duty. The afore stated goods are liable for confiscation under the provisions of Section 111(d) and 111(l) of the Customs Act, 1962 and hence, it cannot be released provisionally. Hence in the instant case provisional release is not feasible.

Prepared By:Anash kachaliya

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PJ/CASE LAW/2015-16/3009

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