MUHAMMAD RAZI VS COLLECTOR OF CUSTOMS (APPRAISEMENT), CUSTOM HOUSE, KARACHI, 2003 PTD-KARACHI-HIGH-COURT-SINDH 2821 (2003)

(a) Customs Act (IV of 1969)‑‑‑--

‑‑‑‑Ss. 32 & 223‑‑‑Customs General Order No. 12 of 2002, dated 15‑6‑2002‑‑‑Assessment of duty and taxes on goods and release thereof and any action directed under S.32, Customs Act, 1969 do not amount to performance of quasi‑judicial functions‑‑‑Such acts are purely in the nature of executive functions, performed in the execution of provisions contained in the Customs Act, 1969, therefore, directions contained in Customs General Order No. 12 of 2002, dated 15‑6‑2002 are binding on the Customs Officials‑‑‑Principles.

It is provided in section 223 of the Customs Act, 1969 that all Officers of the Customs and other persons employed in the execution of Customs Act shall observe and follow the orders, instructions and directions of the Board. The sole exception is provided in the proviso according to which the Board shall not issue such orders, instructions or directions which tend to interfere with the discretion of the appropriate Officer of Customs, in the exercise of his quasi‑judicial function. The assessment of duty and taxes and the release thereof and any: action directed towards the initiation of proceedings under section 32 of the Customs Act, 1969 do not amount to performance of quasi‑judicial function. Such acts are purely in the nature of executive functions, performed in the execution of provisions contained in the Customs Act, 1969. Thus, directions contained in the Customs General Order No. 12 of 2002, dated 15‑6‑2002 are binding on the Customs Officials.

(b) Customs Act (IV of 1969)‑‑‑--

‑‑‑‑Ss.32 & 223‑‑‑Customs General Order No.12 of 2002, dated 15‑6‑2002‑‑‑Customs General Order No.12 of 2002, dated 15‑6‑2002 providing clear instructions on the option of first appraisement system, the importer could not be charged for misdeclaration under S.32, Customs Act, 1969‑‑‑Action on the part of Customs Officials whereby imported goods assessed to duty and taxes were not allowed to be released and show‑cause notice was issued were thus not sustainable in law and such actions were liable to be struck down as illegal and without lawful authority‑‑‑Principles.

(c) Customs Act (IV of 1969)‑‑‑--

‑‑‑‑Ss.2(rr), 168, 171, 186 & 180‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑--"Seized"‑‑‑Meaning and scope‑‑ "Seized" and "detained"‑‑‑Distinction‑‑‑Principles‑‑‑"Notional seizure"‑ Concept‑‑‑For the purpose of seizing the goods under the Customs Act, 1969, it was not necessary to take it physically into custody the goods in respect of which some offence had been committed or was believed to have been committed‑‑‑Constructive possession of the goods would also amount to seizure for the purpose of Customs Act, 1969‑‑‑Whenever, any seizure of goods occurred in consequence of an order in writing or by verbal instructions or conduct having the consequences of depriving the owner of his rights of ownership of the goods in accordance with the law and the reasons as contemplated under S.171, Customs Act, 1969 were not communicated to the person from whose physical or constructive possession the goods were seized, the order/act of seizure became illegal and invalid‑‑‑Non‑issuance of notice under S.180, Customs Act, 1969 within two months of the seizure of goods, would entitle the person from whose possession the goods were seized to return thereof‑‑‑Goods imported, in the present case, were duly assessed to duties and taxes, however, the importer was not allowed to get the goods imported to be released on payment of duties and taxes as assessed by the Customs Authorities and show‑cause notice under S.180 of the Act was also issued which was beyond a period of two months as specified in S.168(2) of the Customs Act, 1969‑‑‑Held, there was a "notional seizure" of the goods within contemplation of S.168(1) of the Customs Act, 1969 with effect from the date the goods were assessed to duties and taxes, as the importer was not allowed to remove/release the same and provisions contained in Ss. 171 & 168(2), Customs Act, 1969 became operative from the said date and the violation of mandatory provisions contained in the said provisions was apparent on record‑‑‑Show‑cause notice issued being beyond the period of two months from the date of seizure of the goods was illegal and without lawful authority. High Court directed the Customs Authorities to return the goods to the importer forthwith after recovery of customs duty and other taxes as assessed by the Customs Officials.

Ilam Khan v. Government of Pakistan 1983 CLC 786 and Haji Noor‑ul‑Haq v. Collector of Customs 1998 MLD 650 fol.

Khanan Jan v. Deputy Collector Central Excise and Land Customs PTCL 1983 CL 184 ref.

Khawaja Shamsul Islam for Petitioner.

S. Ziauddin Nasir. Standing Counsel assisted by S. M. Tariq Huda, Additional Collector of Customs, Wajid Ali, Deputy Collector of Customs and Wazir Rizvi for Respondents.

Date of hearing: 21st August, 2003.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---The petitioner has sought the following relief:‑‑

"This Hon'ble Court may graciously be pleased to pass order against the respondents under:‑‑

(I)Declare that the blocking of bill of, entry by the respondent No.1, is, contrary to law and violative of sections 79, 80 and 81 of the Customs Act 1969 and having no legal effect, consequently petitioner became entitled for return of his goods in view of section 168 read with section 180 of the Customs Act, 1969 on payment of duties and taxes as assessed by the respondent No. 1

(II)Direct the respondent No.1 to immediately release the consignment of the petitioner in terms of their own examination and assessment of duty to the tune of Rs.15,62,808 with delay detention certificate and free slip.

(III) Declare that the petitioner is not liable to pay any demurrages of port of allied charges either to respondent No.1 or the respondent No.2 and entitled for the full benefit of delay detention certificates and free slip, consequently the respondents Nos. 1 and 2 shall be restrained from creating any hurdles in the smooth clearance of the goods in question.

(IV)Permanent injunction restraining the respondents specially respondents Nos. l and 2, their agents, sub‑ordinates, representative, officers or any other person(s) acting for and on their behalf from taking any coercive action (including but not limited to penal action in terms of section 32 read with section 156 of the Customs Act) and from taking any adverse action or other action whether direct or indirect in pursuance to their illegal blocking of bill of entry since 17‑12‑2002 and further blocking of amended bill of entry, dated 27‑3‑2003 on 15‑4‑2003 and 17‑4‑203.

(V)Grant such order/better relief which this Honourable Court may deem fit and proper under the circumstances of the case.

(VI)Costs of the petition."

After hearing the learned Advocates for the parties on 21‑8‑2003, the petition was allowed as under:‑‑

"For reasons to be recorded later, this petition is allowed in the following terms:

(1)All actions taken pursuant to the show‑cause notice, dated 18‑6‑2003 issued by the Collector of Customs are declared to be illegal and without lawful Authority.

(2)Respondent No.1 is directed to return the goods to the petitioners forthwith after recovery of customs duty and other taxes as assessed by the Customs Officers.

(3)Respondent No.1 shall also issue a Delay and Detention Certificate to the petitioners.

(4)Petitioners shall file an application with KPT seeking concessional rate of demurrage on the basis of the Detention Certificate which Mr. Wazir Rizvi. counsel for KPT has conceded shall be allowed in accordance with the KPT Rules."

The detailed reasons in support of the above short order are as under:‑‑

The petitioners imported a consignment of misc. electronic goods from Singapore Vide Bill of Lading, dated 4‑11‑2002 and Invoice, dated 1‑11‑2002. The bill of entry for home consumption was filed on 12‑11‑2002. In the said bill of entry option was exercised for first appraisement for determination of correct description, PTC heading and quantity of goods. However, the consignment imported by the petitioners remained unattended and the petitioners requested for filing amended bill of entry. On 27‑3‑2003 amended bill of entry was filed. Again a request was made for 100% examination under first appraisement system. On 28‑3‑2003 Deputy Collector of Customs Intelligence Branch ordered manifestation of bill of entry. On 2‑4‑2003 cancellation of first set of bill of entry was allowed and ultimately the Appraising Intelligence Branch of Collector of Customs (Appraisement Karachi) examined the consignment and finally assessed the goods on 15‑4‑2003 and such endorsement was made on the bill of entry. The value of consignment was determined at US$ 69,985. The customs duty and other allied taxes were determined at Rs.15,62,808.

However, the Customs officials under the administrative control of Collector of Customs (Appraisement Karachi) had blocked the bill of entry from 17‑12‑2002 and did not release the goods even after the 100% examination of the goods and assessment of the duties and taxes paid. According to the petitioner the goods were not released inspite of best efforts on his part. The petitioner has contended that the blocking of goods amounts to seizure of the same and under section 168(2) of the Customs Act, a show‑cause notice is required to be issued under section 180 within two months of the seizure of goods failing which the goods are bound to be returned to the persons from whose possession they were seized. It is alleged that no show‑cause notice was issued within a period of two months from the date of seizure of goods and before the expiry of the period of two months, the period has not been extended by Collector of Customs in terms of proviso to subsection (2) of section 168 of the Customs Act, with the result that the petitioner has acquired a vested right for return of the goods on payment of customs duty and other taxes as already assessed by the Custom officials. The respondent No.1 in their parawise comments have stated that the bill of entry was filed on 15‑11‑2002 and not on 12‑11‑2002. It is further alleged that the first bill of entry was returned to the petitioner for removal of discrepancies. The plea of the petitioner was that he was short of necessary information and documents. It is denied that the request was made for 100% examination of the goods with the bill of entry, dated 15‑11‑2003 a request was made for filing of fresh set of bill of entry and the request was allowed. It is also contended by the respondent No.1 that on examination of goods massive misdeclaration in quantity, misdescription and value was found. It has not been denied that the goods were examined and assessed to duty on 15‑4‑2003 and the duties and taxes were assessed at Rs.15,62,808. It is further stated that after detection of misdeclaration, a contravention report was reported and sent to the Adjudication Collectorate for necessary action and a show‑cause notice has been issued on 18‑6‑2003. A plea has been taken that provisions of section 168 and section 180 were not attracted as the goods were not seized. The blockage is not denied but it is stated that it is an internal alert system to target suspect consignment so that when a suspected bill of entry is traced, it may be brought forth before the officer who has initiated this Computer Alert. It is urged that past history of the petitioner warranted the Computer Alert so that the goods may not be cleared through evading duties and taxes. It is further maintained that after issuance of show‑cause notice adjudication process is on way.

Objection has been raised to the maintainability of the petitioner for the reason that after issuance of the show‑cause notice issued by the Adjudication Collectorate, the petitioner may peruse the remedy available under the Customs Act.

We have heard Mr. Khawaja Shamsul Islam, learned counsel for the petitioner, Syed Ziauddin Nasir, Standing counsel for the respondents Nos.1 and 3, assisted by Mr. S.M. Triq Huda. Additional Collector of Customs and Mr. Wajid Ali, Deputy Collector of Customs and Mr. Wazir Rizvi, learned counsel for respondent No.2, KPT.

The main contention raised by the Mr. Khawaja Shamsul Islam, learned counsel or the petitioner is that the Custom officials allowed the cancellation of first set of bill of entry presented on 15‑11‑2002 and allowed the submissions of second set of bill of entry The second bill of entry was submitted with option for assessment on first appraisement system in terms of Customs General Order No. 12 of 2004, which provides that the importers may not be charged for misdeclaration under section 32 of the Customs Act, 1969 where option is exercised for first appraisement for determination of correct description, PTC heading and quantity of goods. The impugned action of the Customs officials being violative of the instructions of C.B.R. contained in Customs General Order 12 of 2002 is not sustainable and is liable to be struck down.

His next contention is that the goods imported by the petitioner were admittedly assessed to duty and taxes on 15‑4‑2003. The goods were not allowed to be released on payment of duty and taxes assessed by the Customs officials which amounts to seizure of the goods. He has contended that as soon as any goods, in the opinion of appropriate officer under the Customs Act are liable to confiscation and are seized, the provisions contained in section 171 of the Customs Act And sub section (2) of section 168 become operative. Non‑compliance of these mandatory provisions shall render the‑seizure of goods to be illegal and a vested right shall be created in favour of the importer for the return of the goods. In support of this contention he has placed reliance on the judgments in following cases:‑‑

(1)Khanan Jan v. Deputy Collector Central Excise and Land Customs. PTCL 1983 (CL‑184); (2) Ilam Khan v. Government of Pakistan. 1983 CLC 786 (Karachi) and (3) Haji Noorul Haque v. Collector of Customs 1978 MLD 650.

On the other hand, the learned Standing Counsel and Mr. M. Tariq Huda, Additional Collector of Customs, have contended that there is a discrepancy, in the first bill of entry which was taken back by the petitioner and was never re‑presented on the plea that it was lost but the information contained therein was preserved in the computer and in the second set of bill of entry, which was processed and on the basis whereof the custom duty and taxes were assessed. They have submitted that the petitioner attempted to hoodwink the Customs officials and opted for first appraisement system in order to avoid the punitive action on the part of Customs officials. The have contended that the intention of the petitioners was not bona fide and therefore, notwithstanding, cancellation of first set of bill of entry and permission to file the second bill of entry and exercise of option for first appraisement system by the petitioner under Customs General Order 12 of 2002, the 'petitioner shall not be absolved of the liability for initiation of proceedings 'under section 32 and imposition of penalty under section 156 of the Customs Act, 1969. They have further submitted that although the goods imported by the petitioner were assessed to duty and taxes on 15‑4‑2003 and the release of goods was not allowed but there was no seizure of goods as contemplated under subsection (1) of section 168 of the Custom Act and therefore, section 168(2) of the Customs Act, never became operative and no vested right for return of goods has taken place in favour of petitioners. They have not denied the fact that the goods imported by the petitioner were assessed to duty and taxes on the basis of second set of bill of entry on the basis of first appraisement system (100% examination of the goods) and even thereafter the release of the goods was not allowed and the show‑cause notice under section 180 read with section 32 was issued on 18‑6‑2003.

We have carefully considered the contentions raised by the learned Advocates for the parities, the material placed on record and the relevant provisions of law.

So far, the first contention pertaining to assessment, dated 15‑4‑2003 on first appraisement system and the direction of C.B.R contained in Customs General Order No1.2 of 2002, dated 15‑6‑2002 is concerned, we find substance in the contention of learned counsel for the petitioners. It is provided in section 223 of the Customs Act, 1969 that all Officers of the Customs and other persons employed in, the execution of Customs Act shall observe and follow the orders, instructions and directions of the Board. The sole exception is provided in the proviso according to which the Board shall not issue such orders, instructions or directions which tend to interfere with he discretion of the appropriate Officer of Customs, in the exercise of his quasi‑judicial function. The assessment of duty and taxes and the release thereof and any action directed towards the initiation of proceedings under section 32 of the Customs Act, 1969 do not amount to performance of quasi judicial function. Such acts are purely in the nature of executive functions, performed in the execution of provisions contained in the Customs Act, 1969. Thus, directions contained in the Customs General Order No. 12 of 2002, dated 15‑6‑2002 are binding on the Customs officials.

As already observed the Customs officials allowed the cancellation of first set of bill of entry and submission of second set of bill of entry, which was duly filed with option of first appraisement for determination of correct description, PTC heading etc. The second bill of entry contains a specific request as follows:‑‑

"Sir,

We are filing said Bill of Entry in the light of import documents provided by importer. Kindly examine the goods 100% before releasing the goods to check all aspects like classification complete description, quantity Art/Part No. weight, origin etc. in terms or Customs General Order 12 of 2002."

The above request was allowed by all the concerned Customs officials and thereafter it does not lie with the Customs officials to allege that notwithstanding, the clear instructions contained in Customs General Order No. 12 of 2002, they were justified in holding that there was a misdeclaration as contemplated under section 32 of the Customs Act and the initiation of proceedings in the said section was warranted. The Central Board of Revenue is the apex body in the tax hierarchy of Federation and the instructions/directions issued by C.B.R. from time to time are binding on the customs officials and any action/omission in violation of such directions/instructions is unwarranted and shall always be liable to be struck down. It is therefore, held that in the wake of clear instructions contained in Customs General Order No. 12 of 2002 that on option of first appraisement system, the importer may not be charged for misdeclaration under section 32 of the Customs Act, 1969, the impugned action on the part of Customs officials whereby imported goods assessed to duty and taxes were not allowed to be released and show‑cause notice was issued are not sustainable in law and are liable to be struck down as illegal and without lawful authority.

Now we, come to the second contention raised by the learned counsel for the petitioner to the effect, that non‑release of goods duly assessed to duty and taxes amounts to seizure of goods, and brings into operation the provisions contained in sections 171 and 168(2) of the Customs Act and non‑issuance of show‑cause notice under section 180 within a period of two months has the effect of creating a vested right in favour of petitioners for return of the seized goods.

The question as to what amounts to seizure was considered in the case of Khanan Jan v. Deputy Collector Central Excise and Land Customs (supra) and it was observed that seizure takes place when the appropriate officer overtly seizes the movable property by divesting the possession thereof with its possession and investing the possession in himself or through himself in some other person. It was further held in this case that the departmental proceedings could not be taken if the notice is not given within the prescribed period of two months from the date of seizure of the goods.

The point in issue came for consideration before a Division Bench of this Court in the case of Ilam Khan v. Government of Pakistan 1983 CLC 786. In this case the goods were cleared from Customs but the petitioner was restrained from removing or to part with or otherwise deal with the goods except with the previous permission of the Customs officials. The petitioner inter alia submitted that, failure of Customs officials to give the reasons for seizure of goods as required under section 171 has rendered the seizure under section 168 of the Customs Act as unlawful, and with the non‑issuance of show‑cause notice under section 180 within two months of the seizure, the goods were liable to be returned to the petitioner. The respondents took plea that the order whereby the owner or any person holding them in his possession or charge was restrained from removing, part with or otherwise dealing with the goods except with the previous permission of the concerned custom officials, was not an order amounting to seizure of goods and therefore, the provisions contained in subsection (2) of section 168 of the Customs Act were not attracted and for the same reason, the Customs official passing the restraint order was not required to serve the petitioner with the grounds of seizure as required under section 171 of the Customs Act. It was urged that section 168 of the Custom Act contemplates passing of two types of orders by the Customs officer. It can either be for seizure of goods, where the goods were capable of seizure and in other cases the order of restraint can be passed. In the latter case, the order of restraint would not amount to seizure of goods. The contention was not accepted. It was held as follows:‑‑

"However, seizure of goods under the section may take place either by physical taking over of such goods by the Customs officials or where physical taking over of the goods is not possible or practicable it may be effected by serving of the owner of the goods or any person holding these goods in possession or charge an order that he shall not remove, part with or other misc. deal with the goods except with previous permission of such officer. The effect in both the cases is same, namely' the owner or the person in possession of goons is deprived of the right to deal with goods in any manner. It is true that in the latter case the owner or the person in possession of such goods is not deprived of its physical possession but in effect as soon as the restraint order is served on him, he is deemed to hold those goods for and on behalf of Customs Authorities and its disposal become subject to the orders of Customs Authorities. We are, therefore, unable to agree with the learned counsel for respondents Nos. 1 to 3 that where an order as contemplated in the later part of subsection (1) of section 168 of the Customs Act is served on a person it does not amount to seizure and, therefore, the provisions of subsection (2) of section 168 and section 171 of the Act are not attracted. If the interpretation placed by the learned counsel for respondents 1 to 3 is accepted, starting result will follow and the safeguards provided in subsection (2) of section 168 and section 171 of the Act by the Legislature against an arbitrary action of Customs Authority will be nullified. For instance a Customs Officer may serve a restraint order as provided in the later part of subsection (1) of section 168 of Customs Act on the owner or person in possession of goods and thereafter neglect to issue a show‑cause notice under section 180 of the Act, for an indefinite period and may also refuse to hand over the goods on the expiry of the period of two months from the date of service of the order on the plea that it was not a `seizure' of goods under section 168 of the Act. Similarly the Customs Officer may also refuse to disclose the grounds of seizure of such goods to the owner or the person in possession of such goods and thus deprive him of the remedy available to him under the Act for an indefinite period. It is an admitted position in the case that the order under section 168 of the Customs Act was served on respondent 4 who was then holding the goods after clearance from Customs, on 16‑6‑1981 and no notice under section 180 of the Customs Act has been served on the petitioner within two months of the service of that order as required under sub section (2) of section 168 of the Act. The learned counsel for respondent in spite of opportunity having been given to him was unable to satisfy us from the record that any extension of time as provided in the proviso to subsection (2) of section 168 was obtained in the case from the Collector of Customs. It is also admitted before us that no grounds of seizure have been served on the petitioner as required under section 171 of the Customs Act so far. These omissions are however, sought to be justified by the learned counsel for respondents 1 to 3 on the plea that the order, dated 16‑6‑1981 served on respondent 4 in the case was not a seizure of goods. We have already held that an order served on the owner or person in possession of goods in accordance with the latter part of subsection (I) of section 168 of the Customs Act takes effect as seizure of goods and, therefore, the order, dated 16‑6‑1981 served on respondent 4 amounted to seizure of those goods. Since respondents 1 to 3 have admittedly not complied with requirement of sub section (2) of section 168 and section 171 of the Customs Act, the order, dated 16‑6‑1981 is rendered ineffective and the petitioners are entitled to delivery of goods. We accordingly accept this petition and declare the order, dated 16‑6‑1981 served on respondent 4 by respondents 1 to 3 in respect of 6 cases of machinery imported by the petitioners is without any lawful authority and of no legal effect. "

The question as to what amounts to seizure of goods was considered by a Division Bench of Lahore High Court, in the case of Haji Noor‑ul‑Haq v. Collector of Customs 1998 MLD 650. Certain goods were seized on the allegation that they were smuggled and after completion of inquiry show‑cause notices were issued. The petitioner prayed for return of goods seized on the ground that the Customs officials failed to issue show‑cause notices within the period stipulated in section 168(2) of the Customs Act, 1969. A plea was taken on behalf of the learned counsel for Customs Department that the goods were only detained for the purpose of inspection at the godown and no order of seizure was passed therefore, the detention of goods does not amount to seizure. The learned Division Bench of the Lahore High Court, formulated the questions for consideration to the effect whether detention of goods by the Customs Authorities amounted to seizure within the contemplation of section 168(2) of the Customs Act and whether the non issuance of show‑cause notice, under section 180 of the Customs Act, within two months of the seizure of the goods entitles the petitioner to the return of goods seized. By placing reliance on the Division Bench judgment of Sindh High Court in the case of Ilam Khan (Supra) it was held that the action on the part of Customs authorities amounted to seizure of goods. It was further observed that a deeper look to section 168 of the Customs Act, would show that the intention of law makers appears to be that the period of seizure should not be prolonged and that the Customs Authorities must give a show‑cause notice for confiscation of the goods in question within two months of seizure failing which the person from whom the goods were recovered earns the right to restore the possession of those goods. It was further held that the mandatory provisions for notice within two months had been enshrined for twofold purposes, firstly, to ensure that the Custom Authorities proceed and adjudicate the matter expeditiously and secondly, that the affected persons are not left at the vagaries of Customs Authorities to the utter peril of their business. Beneficial construction has to be accorded and any violation thereof follows a consequence which deprives the Customs Authorities to retain the goods and confers right on the person from whom the goods were recovered to claim their restoration. Reliance in this behalf was placed on the judgment of Hon'ble Supreme Court in the case of Joint Secretary, Central Board of, Revenue (Customs) v. Raja Nazar Hussain 1991 SCMR 647. The petition was ultimately allowed and the Custom officials were directed that the goods be returned to the petitioner:

We respectfully subscribe to the views held in the cited judgments on the point as to what amount to seizure of goods within the contemplation of section 168(1) of the Customs Act, 1969. It would be appropriate to reproduce the definition of word `seizure' contained in section 2(rr) of the Customs Act, 1969, which read as follows:‑‑

2(rr) `Seize' means to take into custody, physically or otherwise, goods in respect of which some offence, has been committed or is believed to have been committed under this Act or the rules; and all cognate words and expressions shall be construed, accordingly."

A bare reading of the above definition shows that for the purpose of seizing the goods under the Customs Act, 1969, it is not necessary to take it physically into custody the goods in respect of which some offence had been committed or is believed to have been committed. A constructive possession of the goods shall also amount to seizure for the purpose of Customs Act, 1969. At this stage, it would be expedient to observe that the legislature has used two different expressions in the Customs Act, namely, `seized' and "detained" and different provisions have been enacted for seizure and detention of goods. The seizure has been dealt with in sections 168 and 171 of the Customs Act, while the detention has been dealt with under section 186 of the Customs Act. The two Acts are distinct from each other and the provisions relating to the two Acts are also distinct and separate. The difference in the two Acts and the provisions governing them are always required to be kept in view. Under section 186, the goods can be detained pending payment of fine or penalty while under section 168, the goods can be sized if they are liable to confiscation under the Customs Act. For the purpose of detention of goods no separate reasons are required to be recorded and communicated to the owner or person in possession of the goods except that the detention is for the purpose of payment of fine or penalty which has been imposed or the imposition whereof is under circumstances. However, in the case of seizure of goods under section 168 the reasons are to be recorded under section 171 and communicated to the person from whose possession the things are seized and the notice under section 180 of the Customs Act, is also required to be issued within two months of the seizure of goods failing which the owner or the person from whose possession they were seized shall earn a right for return of the goods seized. A careful consideration of section 168(1) and section 2(rr) leads to the conclusion that the word `possession' is not confined to the physical possession and is inclusive of constructive possession as well. We are further of the considered opinion that the seizure of goods cannot be confined to the cases where an order in writing in this behalf is made but is inclusive of notional seizure as well, meaning thereby, that if the Customs official has not passed any specific order in writing about the seizure of goods but has verbally given instructions or by his conduct has made the release for removal of goods under restraint thereby depriving to the owner of the goods of exercising all the incidents of the right and title and interest in the goods, it would also amount to seizure of goods within contemplation of section 168(2) of the Customs Act. The restraint imposed on the goods other than a detention contemplated under section 186, by any nomenclature such as blockage, detention etc. falls within the contemplation of section 168(1) read with the definition C contained in section 2(rr), and would amount to a seizure, bringing the provisions contained in sections 171 and 168(2) into operation. Thus, whenever, any seizure of goods occurs in consequence of an order in writing or by verbal instructions or conduct having the consequences of depriving the owner of his rights of ownership of the goods in accordance with the law and the reasons as contemplated under section 171 are not communicated to the person from whose possession physical or constructive the goods are seized. The order/act of seizure becomes illegal and invalid. Likewise, the non‑issuance of notice under section 180 within two months of the seizure of goods as described above, would entitle the person from whose possession the goods were seized to the return thereof.

Applying the above principles to the facts of the present case, we find that the admitted position is that the goods imported by the petitioner were duly assessed to the duties and taxes on 15‑4‑2003. However, the petitioner was not allowed to get the goods imported to be released on payment of duties and taxes as assessed by the Customs Officials. The show‑cause notice under section 180 was also issued on 18‑6‑2003 which is beyond a period of two months specified in subsection (2) of section 168 of the Customs Act. Thus, in the facts and circumstances of this case, there was a notional seizure within contemplation of section 168(1) of the Customs Act with effect from 15‑4‑2003, the date from which the goods were practically seized and the petitioner was not allowed to remove/release the same. The provisions contained in sections 171 and 168(2) became operative from 15‑4‑2003 and the violation of mandatory provisions contained in these two sections is apparent on record.

For the foregoing reasons, it is held the show‑cause notice issued on 18‑6‑2003 being beyond the period of two months from the date of seizure of the goods is illegal and without lawful authority. Consequently, the respondent No. 1 is directed to return the goods to the petitioner forthwith after recovery of custom duty and other taxes as assessed by, the custom officials.

The petition is allowed in terms of the short order dated 21-3-2003.

M.B.A./M-540/KPetition allowed.