Bombay HC Strikes Down EEZ Customs Seizure Without Notification: SC to Decide on Department’s Appeal [Read Order]

The Supreme Court is to hear the appeal of the customs department following the ruling of the Bombay High Court that the Commissioner of Customs lacked jurisdiction to seize an offshore rig located in the Exclusive Economic Zone (EEZ) without a specific notification assigning such authority under Section 4 of the Customs Act, 1962.

The judgment came in a customs appeal filed by the Revenue against a 2005 order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which had quashed the department’s demand for duties on the rig “Noble Jimmy Puckett” owned by Noble Asset Co. Ltd.

The rig was detained on 12 May 2001 while operating at coordinates 19°38′28″N and 71°17′31″E, an area outside the designated zones notified under the Maritime Zones Act, 1976. The Commissioner (Preventive) had issued a show cause notice demanding duties on the ground that the rig was imported and misjudged.

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However, the High Court held that only officers specifically notified for designated areas in the EEZ, such as the Commissioner of Customs (Imports), could exercise jurisdiction over such locations. The court rejected the department’s argument that concurrent jurisdiction extended to EEZ operations, noting that statutory notifications must explicitly confer such powers.

The High Court emphasised that jurisdiction under the Customs Act flows strictly from notification and cannot be presumed based on administrative convenience or past practice. Referring to Notification No. 27/97-Cus. (NT) and its successors, the court observed that designated areas in the EEZ were assigned to specific commissioners, and the Commissioner (Preventive) was notified only for Mumbai, Thane, and Raigad districts.

The High Court also cited precedents from the Supreme Court and Karnataka High Court to reinforce the principle that jurisdictional allocation must be respected in adjudication and enforcement.

In a related development, the Supreme Court has listed the department’s appeal in the Paragon Assets Co. Ltd. matter for early hearing. The civil appeal pertains to similar jurisdictional questions involving offshore operations and customs enforcement. The case now awaits final adjudication by the Supreme Court.

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