A division bench of the Bombay High Court has held that an importer of the goods cannot be treated as an “owner” of the goods for the purpose of provisional release of goods under section 110A of the Customs Act.
The Directorate of Revenue Intelligence seized two consignments under Section 110A of the Act arriving from Hong Kong after they were found to be mis-declared. The consignments were purportedly containing Memory Module of 4GB, 8GB and 32GB DRAM valuing about 80 lakh rupees. On inspection it was found to contain 3800 iPhones valuing about 42 Crore Rs.
The respondent, Dinesh BhabootmalSalecha filed an application for release of goods under Section 110A of the Act. The adjudicating authority rejected the application stating that there was no evidence to show that the respondent was the owner of the goods. Respondent appealed before the CESTAT which allowed the appeal reasoning that ownership could be claimed by an importer.
A division bench comprising Justice Dhiraj Singh Thakur and Justice Abhay Ahuja observed that “nothing could prevent the legislature from specifically incorporating a provision in Section 110A, which would alsoentitle, besides an owner, an importer, a beneficial owner or any person holding himself to be an importer to claim a right to seek provisional release of goods in terms of Section 110A of the Act. If one were to read the provisions of Section 125 of the Act, it would make things a bit clearer. The said Section envisages that when confiscation of any goods is authorized by the Act, the officer adjudging may give to the owner of the goods or where such owner is not known, the person from whose custody such goods have been seized, an option to pay in lieu of such goods, such fine as the said officer thinks fit. It thus goes to show that goods can be got released by a person other than an owner, in the circumstances as envisaged in Section 125 of the Act at a time when confiscation is authorised, which right of release of goods is not available to any other person except an owner as envisaged under Section 110A of the Act at any preliminary or intermediate stage.”
Dismissing the plea of the importer, the Court held that “In our opinion, in view of the specific and clear mandate of Section 110A, goods could have been permitted to be released only in favour of an owner and since the Respondent had failed to prove ownership over the goods in question, asheld by the adjudicating authority inasmuch as no evidence had been submitted to prove such ownership, which finding of fact has not been unsettled by the Tribunal, except to the extent that the Respondent has been held to be the owner by an erroneous legal interpretative process of the provisions of the Act.”
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