Customs - Return of Seized Goods if no SCN given within six months - CBEC clarifies
AS per Section 124(a) of the Customs Act, no goods can be confiscated or penalty imposed unless a notice is given.
As per Section 110(2), if no such notice is given within six months, any goods seized have to be returned. The Commissioner can extend this six-months limitation for a period not exceeding six months.
Board says that it has been the considered practice of field formations that in cases where seized goods have been provisionally released by the competent authority under Section 110 (a) [sic]and investigations in the matter are still pending there is no need for notice under Section 124(a) of the Customs Act and that a Show Cause Notice can be issued in such cases of provisional release on completion of investigations. For this, reliance was placed on the Hon'ble Bombay High Court judgment in writ petition No. 316 of 2008 (reported in “Jayant Hansraj Shah v Union of India - ) to say that whenever the power to issue show cause notice is preserved, and a request is made, to release the goods taken into custody, there would be no question of unconditional release, by operation of Section 110(2) of the Act.
But recently Hon'ble Delhi High Court in WP (C) No. 2952/2012 in the case of Jatin Ahuja Vs DRI has, vide decision dated 04.09.2012 - has held that -“Sec 110A does not absolve or override provisions of Sec 110(2) - Though seized goods are released provisionally under Sec 110A, if no Show Cause Notice is issued within stipulated time under Sec 110(2), goods shall be returned”
Board says that while the department is in the process of filling SLP against the said order, the matter has been examined in the Board and the Board gives the following instructions:
1) While, Section 110(2) provides for unconditional release of the goods on non-issue of notice within the stipulated period, there is no time limit provided for issue of Show Cause Notice under Section 124 and that the proceedings of confiscation of goods and/or imposition of penalty on the offender do not attract any time limit. However, release of goods for non-compliance of provisions of Section 110(2) is bound to create complications like difficulties in realisation of duty leviable on goods under reference and of fine and penalty amounts.
2) The investigating officers should, therefore, exert to complete the investigations at the earliest and submit draft Show Cause Notice to the adjudicating Authority who should ensure that the Show Cause Notice is issued to the owner of the goods or such person under Section 124 of the Customs Act, 1962 within six months of the date of seizure of goods or within the period extended by the Commissioner of Customs in terms of Proviso to Section 110 (2). This is necessary in order to avoid the play of unconditional release of seized goods to the person from whom the goods were seized.
3) The field formations should invariably report all cases (including seizure cases) pending investigation in Annexure-IV of Customs MTR on Anti-smuggling Performance giving reasons for pendency of instigation wherever, the pendency is more than 3 months. All Chief Commissioners / Commissioners should monitor the position of cases under investigation (including cases involving seizure of goods through the MTR and otherwise) and take steps for issue of Show Cause Notices within the time limit prescribed under Section 110(2) of the Customs Act, 1962.
As usual, any deviation from the above stated procedure would be viewed seriously in view of possible loss of Revenue to the Government Exchequer .
This Circular is numbered as 7/2013 dated 19th February 2013 and had been mysteriously missing all these days. After this, Board had issued Circular Numbers 8,10 and 11. Circular No. 9 is still missing.
CBEC Circular No. 07/2013-Cus., Dated: February 19, 2013