Foreign Origin of Seized Areca Nuts Not Established, S. 110 & S. 111 of Customs Act cannot be Applied: Gauhati HC [Read Order]

The Gauhati High Court has quashed the seizure of areca nuts by Customs authorities, ruling that in the absence of any material establishing that the goods were of foreign origin, the powers of seizure under Section 110 of the Customs Act, 1962 could not be invoked.

Justice Devashis Baruah observed that mere suspicion of smuggling is insufficient and that Customs authorities must possess “reasons to believe” supported by relevant material before exercising powers of seizure under the statute.

M/s Aliya Enterprise, a proprietorship concern engaged in the trade of areca nuts challenged the seizure of 17,200 kilograms of Assam dried areca nuts valued at ₹33.81 lakh, which were being transported from Hailakandi to Rupahi in Nagaon district pursuant to a sale transaction.

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On December 2, 2025, Customs authorities in Badarpur seized a consignment of areca nuts, suspecting they were illegally imported from Myanmar without valid documents.

The petitioner requested the provisional release of the seized goods. However, this request was rejected on February 12, 2026, with authorities stating their belief that the areca nuts were of foreign origin and had been smuggled into India.

The High Court noted that while laboratory testing confirmed the seized areca nuts were fit for human consumption, the Customs Department failed to produce any report proving a foreign origin. The Court observed that despite conducting tests specifically for this purpose, authorities could not establish that the consignment was smuggled.

The single bench stated that Section 110 of the Customs Act mandates a "reason to believe" not mere suspicion, conjecture, or a hunch that goods are liable to confiscation under Section 111. For goods brought from outside India, Customs must possess actual material showing foreign origin before invoking these provisions.

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The Court found that neither the seizure inventory nor contemporaneous records disclosed any basis for concluding the areca nuts were of foreign origin. No material evidence regarding their size, appearance, characteristics, or laboratory analysis was presented to substantiate the department's claim.

The High Court criticized Customs authorities for focusing on the missing FSSAI license, noting this pertains to food safety laws and fails to prove the goods' foreign origin. It was ruled that without evidence of foreign origin, Section 111's confiscation provisions do not apply, invalidating the seizure powers under Section 110.

The court opined that “there are no materials to show that the goods in question were of foreign origin, the basis on which the seizure was carried out cannot be said to be based upon ‘reasons to believe’, but rather it was on account of suspicion and, therefore, it was without jurisdiction, inasmuch as, ‘reasons to believe’ is a condition precedent for exercise of power under Section 110 of the Act of 1962.”

Therefore, the Court quashed the seizure of both the areca nuts and the transport vehicle, and ordered their immediate release. Furthermore, the Customs Department was directed to close all related proceedings against the petitioner unless fresh, contradictory evidence emerges.

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