The Delhi High Court has held that notice of proceedings under Section 110(1b) of the Customs Act, 1962 must be issued to the owner of seized goods.
Ganesh Sawant, the petitioner challenged the order by the Commissioner of Customs (Appeals) concluding the proceedings under Section 110(1D) of the Customs Act, 1962 without issuing any notice of the proceedings to the petitioner.
The petitioner engaged in the business of manufacturing gold jewellery and selling the same in the domestic market. He states that he carries on the business in the name and style of a sole proprietorship concern named M/s Tanishka Bullions and Jewells. He states that although the said concern is registered with the Goods and Services Tax Department in the name of his wife, he is responsible for carrying on the day-to-day affairs of the concern.
The officers of the Directorate of Revenue Intelligence (DRI) stopped the petitioner’s car on NH-24 and searched the Vehicle. Five gold bars weighing 1000 grams each were found and seized by the said officers under Section 110 of the Customs Act.
The said goods were valued (five gold bars of 1000 grams each) at a tariff value of ₹2,15,57,250/- (Rupees two crores fifteen lacs fifty-seven thousand two hundred and fifty only). The market value of the said goods was determined at ₹2,34,00,000/- (Rupees two crores thirty-four lacs only). A show cause notice dated 16.08.2021 was issued, inter alia, to the petitioner. The respondents returned four gold bars, which were seized on 20.02.2021.
It was stated that the proceedings under Section 110(1D) of the Customs Act were conducted by the Commissioner of Customs (Appeals) on 21.11.2022 and the seized inventory was certified. Further, by an order dated 24.11.2022, the respondents were also granted permission for disposal of the seized gold.
The respondents issued a notice dated 25.11.2022 under Section 150 of the Customs Act informing the addressees, including the petitioner, that proceedings under Section 110(1D) of the Customs Act were completed on 21.11.2022, and by an order dated 24.11.2022, the Commissioner (Appeals), New Delhi had confirmed and certified the inventories mentioned in the panchnama.
It was stated that with the introduction of Sub-section (1D) in Section 110 of the Customs Act, Commissioner (Appeals) was specified as the concerned authority in respect of seized gold in any form. The proper officer is now required to make an application to the Commissioner (Appeals) having jurisdiction instead of the Magistrate under Sub-section (1B) in respect of gold in any form, which is seized under Section 110(1) of the Customs Act.
A two-judge bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that notice of proceeding under Section 110(1B) of the Customs Act was required to be issued to the owner or the persons from whom the goods were seized.
It was viewed that the contention of the respondent that no notice is required to be served of the proceedings under Section 110(1D) of the Customs Act is not valid. In light of precedent in the case of Ishwar Parasram Punjabi v. Union of India (supra), the Court held that the petitioner is entitled to insist that the proceedings under Section 110(1D) of the Customs Act be conducted de novo.
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