The Bombay High Court while directing the release of Mercedes-Benz Engine Oil noted that the Customs Authority exceeded the time limit of 6 months to keep consignments under seizure.
The petitioner, Indoshell Mould Limited invokes the jurisdiction of this Court under Article 226 of the Constitution of India inter alia seeking relief and protection from unjustified investigation being carried out by respondent into import of Mercedes-Benz Engine Oil on alleged grounds of undervaluation; vacating of the seizure of two consignments of Mercedes-Benz Engine Oil by respondent; unconditional release of the said two consignments of Mercedes-Benz Engine Oil without furnishing bank guarantee of Rs.2 Crores as directed by respondent and closure of investigation into alleged undervaluation by respondent against the petitioner.
The petitioner contended that they imported the engine oil in terms of framework contract for the supply of Mercedes-Benz labelled lubricants entered into between Daimler AG and Sinopec Lubricant Company Limited on January 26, 2018. As per the framework contract, Sinopec Lubricant Company Limited is required to supply private label products to the Daimler Group in the countries set forth in the contract.
The division bench of Chief Justice Dipankar Dutta and Justice M.S.Karnik held that proper officer then is obliged to follow the procedure prescribed in sub-section (2) of Section 110 of the said Act, in that he has to issue notice under clause (a) of section 124 of the said Act within six months of the seizure of the goods. The notice under clause (a) of Section 124 within six months of the seizure is not issued and therefore the consequence of release must follow.
“Assuming that the competent authority in exercise of the powers conferred by the first proviso extends period so specified by sub-section (2) of Section 110 by a further period of six months, the maximum period during which the goods shall remain under seizure is 12 months from the date of seizure. The effect of non compliance of the provisions of sub-section (2) of Section 110 would only be that the seized goods are to be returned to the persons from whose possession they were seized. It would not render the initial seizure of the goods illegal. Thus, under sub-section (2) of Section 110, time limit is fixed for retaining the goods seized by the customs authority. In case the confiscatory proceedings are not initiated, custody of the goods to the persons from whom they were seized are to be handed over,” the court said.
The bench further held that the respondents have exceeded the time limit to keep the consignments under seizure and are not entitled to detain the goods any further, hence we have no hesitation in entertaining the present petition under Article 226 of the Constitution of India despite availability of alternate remedy.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
