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Judgment
J.H. Bhatia, J.—Rule. Rule returnable forthwith. With consent of the learned Counsel, the matter is taken up immediately for final hearing.
Admittedly, on 31.7.2002, the Customs Officers raided the premises situated at Fanas Wadi, Mumbai on information that 598 Rolls of imported polyester knitted fabric, imported and cleared duty-free under Advance Licence issued under the name of M/s. Sweety International Pvt.Ltd., Surat were lying in the said premises owned by the present petitioners or one M/s. Unicorn Textiles. During the raid, the said 400 Rolls with marking `Kabul SYN'' and 198 Rolls of fabric having marking `Her Ching'' were found. Accordingly, panchnama was prepared. On 13.11.2002, a seizure memo and a fresh panchnama of the seized goods were prepared. The petitioners, who claimed to be the owners of the said Rolls, made a request by a letter dated 21.11.2002 to the Joint Commissioner of Customs, who had seized the said Rolls, to release the same on their giving assurance that the petitioners would bear and incur the liability to pay custom duty on any further portion of goods liable for duty payment. It was also informed that an amount of Rs. 15 lakhs was already deposited. Similar letter was addressed to the Deputy Commissioner of Customs. However, there was no response. Thereafter, on 14.1.2003, a fresh application of the same nature was made to the Deputy Commissioner of Customs. On 8.8.2006, 17.1.2007, 30.7.207 and 8.12.2008, repeated requests were made to the Commissioner of Customs and finally to the Chairman, Central Board of Excise & Customs to release the said Rolls of fabric, clearly pointing out that even though the Rolls of Fabrics were seized on 13.11.2002, no show cause notice was issued u/s 124 to them as required u/s 110 of the Customs Act and on expiry of the statutory period u/s 110, seized goods are required to be released in favour of its owner. It was also pointed out that on 9.1.2006, a show cause notice was issued to the petitioners along with M/s. Sweety International Pvt. Ltd. in respect of certain goods, but 598 Rolls of fabric, involved in th present petition, were not included in the show cause notice. In these circumstances, the petitioners by this petition seek Writ of Mandamus or direction to the respondents to immediately lift and vacate the seizure.
On behalf of the respondents, Rajiv Garg, Assistant Commissioner of Customs filed affidavit in reply dated 5.5.2009 contending that the present petitioners are involved in large scale evasion of Customs duty by clearing imported fabrics under DEEC Scheme and diverting the same into the local market instead of consuming imported goods for fulfillment of export obligation. He also contended in the affidavit that a show cause notice including these 400 Rolls and 198 Rolls of Fabric has been issued and, therefore, the goods are not liable to be released.
There is no dispute that the said 598 Rolls of Fabric were seized on 13.11.2002, even though initial panchnama was made on 31.7.2002. Section 124 of the Customs Act requires issuance of show cause notice before confiscation of goods. Section 110(1) provides 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. Subsection (2) provides that where any goods are seized under Sub-section (1) and no notice in respect thereof is given under Clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. The proviso to Sub-section (2) further provides that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Commissioner of Customs for a period not exceeding six months. From this, it is clear that a show cause notice u/s 124 is required to be issued within six months from the date of seizure but period for issuance of show cause notice may be extended by further period of six months if he Commissioner is satisfied that there are sufficient reasons for the delay. However, there is no provision in law to extend that period any more. It means the notice u/s 124 could be issued within six months or with permission of the Commissioner of Customs within 12 months from the date of seizure. The affidavit-in-reply reveals that show cause notice in respect of these 598 rolls was issued on 22.6.2006. Admittedly, i the earlier notice issued on 9.1.96 also these goods were not included.
The learned Counsel for the petitioners rightly pointed out that in view of the provisions of Sub-section (2) of Section 110 of the Customs Act, due to non-issuance of the notice within the specified period, the goods shall be returned to the person from whose possession they were seized and that is the mandate of law. Admittedly, the show cause notice was issued about 3-1/2 years after the seizure. In view of this, under the provisions of Section 110(2), the respondents are bound to return the goods to the petitioners from whose possession the same were seized.
For the aforesaid reasons, Rule made absolute in terms of prayer Clause (a).