Customs' "Reasonable Belief" in Goods Misclassification Beyond Writ Jurisdiction: Kerala HC dismisses Importer's Plea [Read Order]
The court noted that the seizure memo under Section 110 is a preliminary step, and the substantive challenge to the classification must be addressed in the proceedings under Section 124, which are before the adjudicating authority.
The Kerala High Court has dismissed a writ petition filed by an importer challenging the seizure of imported goods, establishing that a customs officer's "reasonable belief" in misclassification is beyond the scope of writ jurisdiction and must be adjudicated through statutory remedies.
The petition was filed by Sri. Shimwas Hussain, proprietor of M/S. Deccan Traders, who imported "NATA DE COCO," an edible product made from coconut water and milk. The petitioner had classified the goods under Customs Tariff Heading (CTH) 2007 9990, claiming this classification was consistent with the exporting country's classification and supported by the Indian Coconut Journal published by the Ministry of Agriculture.
However, customs authorities seized the goods under Section 110 of the Customs Act, 1962, suspecting misdeclaration. For provisional release, they required the petitioner to execute a bond and furnish a bank guarantee.
The issue was whether the High Court, in its writ jurisdiction, could interfere with a customs officer's "reasonable belief" that goods were misdeclared and liable for confiscation. The petitioner argued that the seizure was arbitrary as the officer did not specify the correct classification in the seizure memo.
The customs department countered that a show cause notice under Section 124 had been issued proposing confiscation under Section 111(m) and (o) of the Customs Act, and that the matter was sub judice before the adjudicating authority.
The bench, comprising Justice Ziyad Rahman A.A., held that the "reasonable belief" of a customs officer is a subjective determination based on their experience and expertise in interpreting suspicious circumstances. Relying on the Supreme Court's decision in Indru Ramchand Bharvani v. Union of India, the court stated that it cannot sit in appeal over such a belief formed by a specialized authority.
The court noted that the seizure memo under Section 110 is a preliminary step, and the substantive challenge to the classification must be addressed in the proceedings under Section 124, which are before the adjudicating authority.
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The court found that even though the correct classification wasn't explicitly stated in the initial seizure memo, this was rectified in the subsequent show cause notice, which fortified the officer's initial belief that the goods should fall under CTH 2008 9999 (covering fruits, nuts, and other edible parts of plants). Since the petitioner has a statutory right to appeal against the final order in the Section 124 proceedings, the writ petition was premature.
Regarding the bank guarantee requirement, the court observed that the petitioner himself had previously requested provisional release against a bank guarantee, undermining his current objection to that condition. The court dismissed the writ petition, clarifying that it has not expressed any opinion on the merits of the classification dispute, which is to be decided by the competent authority through the statutory process.
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