Seizure of goods – clarification – be careful about the six months period
In compliance with a recent Court order, the Government has paid a large amount of damages in a case where an imported car was cleared by the Customs authorities on 05.06.1993, impounded on 11.06.1993, and seized nearly 2 years later on 05.03.1995. Consequently, the Show Cause Notice dt. 08.05.1995 was quashed by the High Court for the reason that it was time barred. Though the Department argued that the car had been seized in March 2005, and the Show Cause Notice was therefore not time barred, the High Court pointed out that the act of impounding the car and depriving the owner of its use amounted to its seizure, and that the physical deprivation of the custody or enjoyment of the goods in question is the test for determining whether there is seizure of goods.
Board has reiterated that any act of the Customs authorities whereby the owner of the goods is deprived of the custody or physical possession or enjoyment of the goods amounts to seizure, attracting the statutory requirement of issuing a Show Cause Notice within 6 months (or the extended period of 1 year) of the seizure of the goods. Thus, seizure of goods will include detention of the goods, impounding of the goods, issuing a notice to the owner of the goods that he shall not remove, part with, or otherwise deal with the goods except with prior permission/taking physical possession of the goods etc.
Board also reiterates that there is no provision in the Customs Act for detention of goods, as distinct from the seizure of goods. Sec 110 of the Customs Act provides for seizure of goods when there is a reasonable belief that the goods are liable for confiscation. Where it is not practicable to seize goods, in the sense of taking physical possession of the goods, a notice may be served on the owner of the goods that he shall not remove, part with, or otherwise deal with the goods except with prior permission. When goods are thus detained, the statutory requirement of issuing a Show Cause Notice within 6 months (or the extended period of 1 year) should not be lost sight of merely because the Department has not taken physical possession of the goods.
F.No. Dated : March 06, 2007