Case Law Details
Jaymatajee Enterprise (Seller) And Another Vs Commissioner of Customs (Preventive) & 2 Others (Allahabad High Court)
It is clear from the statute that the power of seizure of goods under Section 110 of the Customs Act can be resorted to only when the Officer exercising the said power has ‘reasons to believe’ that the goods are liable to confiscation. In the present case, admittedly the goods were at Gorakhpur and not seized from any port or any custom area to form a belief that the goods were being imported into India. In the Panchnama, which the counsel for the respondents submits is a seizure memo, the only reasons recorded are that on a prima facie examination, the ‘Areca Nuts’ loaded in the Truck and as on some of the bags inscriptions in foreign language was written as well as that the ‘Areca Nuts’ on being 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 on record in the form of certificates issued by the Ministry of Agriculture and Farmer Welfare as well as by ICAR to the effect that there is no mechanism available to trace the country of origin of ‘Areca Nuts’ and there is no laboratory test available for the same and further on the basis of examination by naked eye it cannot be conclusively determined with regard to origin of the ‘Areca Nuts’. The 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 ‘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.
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