Case Note & Summary
Background: The petitioner, a subsidiary of Bajaj Auto Ltd., is engaged in the manufacture and sale of electric scooters and imported consignments of Lithium Ion Cells. Facts: Out of nine bills of entry, seven were cleared by customs after physical examination and assessment, but two companion bills of entry both dated 8 February 2023 were detained. The Additional Commissioner of Customs passed an order-in-original dated 23 May 2023 confiscating the goods under Section 124 of the Customs Act, 1962 on the ground that BIS markings were affixed on the cartons/packages and not on the cells themselves, allegedly in violation of Public Notice No.136/2008 and the Bureau of Indian Standards (Conformity Assessment) Regulations, 2018. The petitioner challenged the confiscation order in Writ Petitions No.8768 and 8769 of 2023, contending that no show cause notice was issued prior to passing the order. The High Court, by order dated 17 July 2023, set aside the order-in-original for breach of the principles of natural justice, holding that Section 124 expressly requires a written notice, an opportunity of representation, and a hearing before confiscation. The Court relied on Supreme Court decisions in Gajanan Visheshwar Birjur v. Union of India and Metal Forgings v. Union of India to underscore that the right to trade under Article 19(1)(g) is a guaranteed freedom that cannot be restricted by orders passed without due process. After quashing the confiscation, the Court granted liberty to the petitioner to apply for release of the goods. The present writ petition was filed seeking release of the very same detained consignments. The matter was heard finally on 31 October 2023 and judgment pronounced on 2 November 2023. The specific operative directions of this judgment are not detailed in the available text, but the background and legal reasoning highlight that any detention or confiscation must strictly comply with the procedural safeguards of Section 124 and the principles of natural justice.
Headnote
A) Customs Law - Confiscation of Goods - Natural Justice and Section 124 Customs Act, 1962 - Confiscation without show cause notice is void and violates fundamental rights - The Additional Commissioner of Customs passed an order-in-original confiscating imported lithium ion cells on the ground that BIS markings were affixed on cartons and not on the cells themselves, without first issuing a show cause notice to the importer. The Court held that Section 124 of the Customs Act, 1962 mandates a prior written notice, opportunity of representation, and hearing before any confiscation; failure to follow this procedure vitiates the order and breaches principles of natural justice. Reliance placed on Gajanan Visheshwar Birjur v. Union of India and Metal Forgings v. Union of India to emphasize that the right to trade under Article 19(1)(g) cannot be restricted without due process. The confiscation order was set aside and the matter remanded for fresh adjudication in accordance with law (Paras 5-10).
Issue of Consideration
Whether the Customs Authorities can detain imported goods and pass an order of confiscation without issuing a show cause notice as required under Section 124 of the Customs Act, 1962, thereby violating the principles of natural justice
Final Decision
Decision not clearly stated
Law Points
- Legal points not extracted
- Confiscation without show cause notice void
- Section 124 Customs Act 1962 mandates prior notice and hearing
- Principles of natural justice demand prior notice and hearing before confiscation
- Non-compliance with BIS marking requirements must be adjudicated after due process
- Right to trade under Article 19(1)(g) protected
Case Details
2023 LawText (BOM) (11) 14
Writ Petition No. 10943 of 2023
G.S. Kulkarni, Jitendra Jain
Citation not available, 2023:BHC-AS:34968-DB
Arshad Hidayatullah, Shailaja Kher Hidayatullah, Makarand Joshi, Anupam Dighe, Chandni Tanna, Prathamesh Chavan, Subir Kumar, Mamta Omle, Sruti Kalyanikar, Janhavi Hirlekar
Union of India (Through the Secretary) Ministry of Law and Justice, Department of Legal Affairs, Branch Secretariat; Commissioner of Customs (NS-V); Additional Commissioner of Customs, Appraising Group VA; Deputy Commissioner of Customs
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Nature of Litigation
Customs law - challenge to detention of imported goods and earlier confiscation order for non-compliance with BIS marking requirements, with focus on violation of natural justice.
Remedy Sought
Petitioner sought release of detained consignments of lithium ion cells and the setting aside of the order-in-original dated 23 May 2023 that confiscated the goods.
Filing Reason
Customs Authorities detained consignments and passed a confiscation order without issuing a show cause notice, alleging that BIS markings were on packages and not on the cells themselves, contrary to Public Notice No.136/2008.
Previous Decisions
The High Court by order dated 17 July 2023 in Writ Petition Nos. 8768 and 8769 of 2023 set aside the order-in-original for violation of natural justice, granting liberty to the petitioner to apply for release of the goods.
Issues
Whether confiscation of goods without issuing a show cause notice violates Section 124 of the Customs Act, 1962 and the principles of natural justice.
Whether the detention of imported goods is lawful after the confiscation order has been set aside for procedural irregularity.
Submissions/Arguments
Petitioner argued that the order-in-original was passed without a show cause notice, contravening Section 124 of the Customs Act and natural justice.
Petitioner contended that the goods complied with BIS marking requirements as the required markings were affixed on the packages.
Respondents maintained that the goods did not bear BIS markings on the cells themselves but only on the cartons, violating Public Notice No.136/2008.
Ratio Decidendi
An order of confiscation under the Customs Act, 1962 passed without issuance of a show cause notice as mandated by Section 124 is void and violates the principles of natural justice, as it affects the fundamental right to trade under Article 19(1)(g) of the Constitution.
Judgment Excerpts
The primary grievance of the petitioners is that such an approach on the part of the Additional Commissioner to pass an order without issuing a show cause notice could not have been adopted by the Additional Commissioner of Customs.
The nature of the order is quite drastic. When such an order was to be passed certainly, the law would require strict adherence of the principles of natural justice and by prior issuance of a show cause notice.
Section 124 which reads thus: '124. Issue of show cause notice before confiscation of goods, etc. No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person ...'
Procedural History
The petitioner imported lithium ion cells. Seven bills of entry were cleared after physical examination by customs. Two bills of entry dated 8 February 2023 were detained. The Additional Commissioner of Customs passed an order-in-original dated 23 May 2023 confiscating the goods for alleged non-compliance with BIS marking requirements. The petitioner challenged the order in Writ Petition Nos. 8768 and 8769 of 2023. The High Court by order dated 17 July 2023 set aside the order for violation of natural justice and granted liberty to apply for release. The present writ petition was filed seeking release of the detained goods under the two bills of entry.
Acts & Sections
- Customs Act, 1962: 124
- Bureau of Indian Standards (Conformity Assessment) Regulations, 2018:
