Bombay High Court: In an appeal filed by Commissioner of Customs (Import) (‘appellant’) challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (CESTAT), directing provisional release of the seized goods in the shape of iPhones in purported exercise of powers under Section 110-A of Customs Act, 1962, a Division Bench of Dhiraj Singh Thakur and Abhay Ahuja JJ. set aside the impugned order as Dinesh Bhabootmal Salecha (‘respondent’) seeking release of the seized goods, was found to be an ‘importer’ and not ‘owner’ of the goods. The clear mandate of Section 110-A Customs Act, 1962 states that goods could be permitted to be released only in favour of an owner and the respondent failed to establish his ownership over the seized goods during the proceedings.
Based upon an intelligence input, the consignment (under challenge) was supposed to contain Memory Module of 4GB, 8GB and 32GB D-RAM valuing Rs. 80 Lakhs approximately, but on inspection was found to contain 3800 iPhones valuing approximately Rs. 42 Crores. Since the goods were mis-declared, the goods were seized under Section 110-A of Customs Act.
An application under Section 110-A of Customs Act was filed which was rejected by the adjudicating authority due to lack of evidence regarding ownership by Salecha Electronics Inc/Dinesh Bhabootmal Salecha. Assailing this, an appeal was preferred before CESTAT which was thereby allowed. and provisional release of the goods were directed. The Tribunal held that even when an ‘owner’ had not been defined in the Customs Act yet, the term ‘owner’ was deployed in the definition of an ‘importer’ under Section 2(26) of Customs Act and by default, ownership could be claimed by an ‘importer’.
On the contention of the respondent that the authorities had considered the Respondent to be an owner because the show cause notice was issued to him in terms of Section 124 Customs Act, the Court noted that on a perusal of Section 124 Customs Act, it can be seen that issuance of a show cause notice in terms of Section 124 does not necessarily establish that the person in whose name it is issued, is necessarily the owner.
The Court further noted that on a careful reading of Section 110-A of Customs Act, it is abundantly clear that goods seized may be released to the owner. The said section does not include or envisage release of goods provisionally in favor of an ‘importer’ of goods much less does it envisage, a release in favor of ‘any person’, in addition to the ‘owner’ as mentioned in Section 124 of Customs Act, who has been served a notice under the said section.
The Court held that the Tribunal has committed an error in importing the definition of an ‘importer’ as defined under Section 2(26) of Customs Act and reading the same in Section 110-A of Customs Act.
[Commissioner of Customs (Import) v. Dinesh Bhabootmal Salecha, 2022 SCC OnLine Bom 1808, decided on 08-09-2022]
Advocates who appeared in this case :
Mr. Advait Sethna a/w Mr. Rangan Majumdar i/b Ms. Ruju Thakker, Advocates, for the Appellant;
Mr. Prakash Shah a/w Mr. Jas Sanghavi i/b PDS Legal, Advocates, for the Respondent.
*Arunima Bose, Editorial Assistant has put this report together.
