Badar Durrez Ahmed, J.
1. The questions involved in this writ petition are:-
(i) Whether detention of the petitioners' goods on 3.11.1976 amounted to seizure within the meaning of Section 110(1) of the Customs Act, 1962?
(ii) If the answer to question (i) above is in the affirmative, whether the Show Cause Notice which was issued under Section 124 of the Customs Act 1962 on 7.5.1977 was not bad in law in view of the provisions of Section 110 of the Customs Act, 1962?
(iii) Whether, in any event, the petitioners' goods could at all be confiscated or penalties be imposed upon the petitioners after the Bill of Entry in respect of the said goods had been assessed and the said goods had been cleared in terms of the provisions of Section 47 of the Customs Act, 1962?
2. To examine the questions in the perspective of the petitioners' case, a brief resume of the facts would be necessary.
3. The petitioner No.1 held an import license for, inter alia, importing 'Thin Walled Bearings - All Sizes'. By a letter of authority, the petitioner No.1 authorised and permitted the petitioner No.2 to import the goods and to open Letter of Credit and make remittance of foreign exchange against the said license held by the petitioner No.1. On 1.11.1976 the petitioner No.2 filed a Bill of Entry No. 11152 for the import of 'Thin Walled Bearings'(hereinafter referred to as the 'said goods') which landed at Palam Airport vide Consignment Note No. 098-07804661 (import rotation No. 76/7392-Flight Air India 106 of 19.10.1976). The said goods were taken delivery of by the petitioner No.2 on 2.11.1976 after payment of the duty on the basis of the declared value. The clearance had been allowed against import license No. T/S/1853921 dated 17.11.1971 in the name of the petitioner No.1. The Bill of Entry for home consumption which was filed by the petitioner No.2 was accordingly assessed, duty was paid and the goods were cleared and taken delivery of by the petitioner No.2. It is alleged that information was received in the Customs House to the effect that the consignment cleared by the petitioner No.2 under the said Bill of Entry had been grossly under-valued and that the import license against which the said goods had been released did not, in fact, cover the said goods. On the basis of this, certain documents were collected for re-examining the case in the light of the information received in the Customs House.
4. On 3.11.1976 at about 18:00 hours, Customs Officers examined the said consignment of goods at the residence of the petitioner No.3 at H-5/2, Model Town, Delhi. The petitioner No.3, it may be pointed out, was the Manager of the petitioner No.2. The goods were examined and two representative samples were drawn in the presence of the petitioner No.3. One set was sealed with Customs Seal No.7 and was handed over to petitioner No.3 and the other set duly sealed was taken over by the Customs Officers for further investigation and examination. As per the Memo of Examination dated 3.11.1976 a copy whereof is at page 32 of the paper book, it is indicated that the examination of the consignment was done in a peaceful manner. Most importantly, it is recorded therein as under:-
'The party has been directed not to deliver the said consignment without the consent of the Assistant Collector of Customs, New Delhi.'
It is in view of this direction that the petitioners allege that the examination carried out on 3.11.1976 itself amounted to a seizure of the said goods as contemplated under Section 110 of the Customs Act, 1962 (hereinafter referred to as the said Act). On 11.11.1977 a formal seizure memo was drawn up and the said goods were physically seized and taken possession of by the Customs Officers under the alleged reasonable belief that the same had been smuggled into India. Thereafter, on 9.5.1977 a show cause notice was served on the petitioner No.1 contemplating confiscation and penalty under the provisions of Section 111(d) and (m) and Section 112 of the said Act. This show cause notice was served on the petitioner No.2 on 10.5.1977. At this stage, the petitioners filed the present writ petition challenging the orders dated 3.11.1976, 11.11.1976 and the shown cause notice dated 7.5.1977. By an order dated 6.12.1977 in CM 1528-W/1977 this Court, inter alia, passed the following order:-
'The goods are at present in the possession of the respondents who were permitted to draw samples from those goods in case of future need. The goods are directed to be released to the petitioners conditional on the petitioners' furnishing a bank guarantee of any scheduled bank valid for a period of one year in the first instance subject to its renewal at least fifteen days before the date of expiry for another one year and for its similar renewal from time to time. The Bank Guarantee will be in the sum of Rs.5,50,000/- to satisfy the claim of the respondents for duty, penalty or other such claims against the petitioner for the said goods. The Bank Guarantee will be to the satisfaction of the Registrar of this Court.
The respondents are free to take further steps and proceedings in pursuance of the impugned notice but no final orders shall be passed till the disposal of the writ petition.'
Thus, from the aforesaid order, it is clear that the goods have already been released however, subject to the petitioner giving a bank guarantee for the sum of Rs.5.5 lakhs which the petitioners have done. It is also clear that the respondents were free to undertake further steps pursuant to the impugned show cause notice and that only the final orders could not be passed till the disposal of the present writ petition.
5. In the background of the aforesaid facts and circumstances, I now take up the consideration of the three questions which arise for determination in the present petition.
Question No.1.
6. It is the petitioners' contention that the direction that was given on 3.11.1976 amounted to a seizure of goods contemplated under Section 110 of the said Act. On the other hand, learned counsel appearing for the respondents submitted that the seizure memo is, in fact, dated 11.11.1976 and it is on that day that actual physical possession of the said goods were taken over by the Customs Officers. Accordingly, he submits that, the date of seizure of the said goods would be 11.11.1976 and not 3.11.1976. The meaning of the word 'seizure' is, inter alia, given in Black's Law Dictionary, Sixth Edition as under:-
'Seizure. The act of taking possession of property, e.g. For a violation of law or by virtue of an execution of a judgment. Term implies a taking or removal of something from the possession, actual or constructive, of another person or persons. Molina v. State, 53 Wis.2d 662, 193 N.W.2d 874, 877.
The act performed by an officer of the law, under the authority and exigencyof a writ, in taking into the custody of the law the property, real or personal, of a person against whom the judgment of a competent court has passed, condemning him to pay a certain sum of money, in order that such property may be sold, by authority and due course of law, to satisfy the judgment. Or the act of taking possession of goods in consequence of a violation of public law.
A 'Seizure' of property (under Fourth Amendment) occurs when there is some meaningful interference with an individual's possessory interest in that property. U.S. v. Jacobsen, U.S.Minn., 466 U.S. 109, 104 S.Ct. 1652, 1656, 80 L.Ed.2d 85.'
From the above definition, it is clear that 'seizure' implies the taking or removing of something from the possession of another person, be it actual or constructive. Seizure of property is also used in the sense whenever there is some meaningful interference with an individual's possessory interest in that property. The direction given on 3.11.1976 to the petitioners was clear and categorical and was to the effect that the petitioners were not to deliver the said goods without the consent of the Assistant Collector of Customs. This, to my mind, clearly implies an interference with the petitioner's possessory interests in the said goods and would, thereforee, amount to seizure of the said goods. Moreover, the seizure does not necessarily imply actual taking of possession. Even taking of constructive possession would amount to seizure. When a direction is given to a person that he shall not remove or otherwise part with or dealt with the goods, albeit in his possession, such a direction would amount to a seizure of the goods. In fact, even the proviso to Section 110(1) contemplates this. Section 110(1) and the concerned proviso are set out as under:-
'110. Seizure of goods, documents and things. -(1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods:
Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.'
It is clear that detention of the goods at the owner's premises with the direction that the owner shall not remove, part with or otherwise deal with the said goods except with the previous permission of the proper officer would be included in the concept of seizure of goods contemplated under Section 110(1) of the said Act. In respect of seizure of documents, the Supreme Court in the case of Durga Prasad etc. v. H.R. Gomes, Superintendent (Prevention) Central Excise, Nagpur and another etc., : 1983(13)ELT1501(SC) held that the power of seizure does not necessarily involve, in every case, the act of physical possession of the person who had a right to seize the articles. The Supreme Court was clearly of the view that actual physical possession was not at all necessary to constitute seizure. There could be seizure of the documents, and, in this case of the said goods, if the proper officer exercised the full incidents of possession over the said documents or the said goods as the case may be. In the present case, the direction given on 3.11.1976 amounted to the proper officer exercising incidents of possession in respect of the said goods by requiring the petitioners not to deliver the said goods without the consent of the Assistant Collector of Customs, New Delhi. In view of the aforesaid discussion I find that the seizure of the said goods as contemplated under Section 110 of the said Act took place on 3.11.1976 itself and not on 11.11.1976 when actual physical possession of the said goods was taken over by the Customs Officers.
Question No.2:
7.1 Having held that the seizure of the goods did in fact, and in law, take place on 3.11.1976, it is to be seen what is the effect of such a finding. Mr. G.L. Rawal, learned counsel for the petitioners argued that in view of the express provision of Section 110 (2) of the said Act the show cause notice ought to have been issued within six months of the seizure. The seizure took place on 3.11.1976. thereforee, show cause notice could have been served on the petitioners on or before 3.5.1977. It is an admitted fact that it was served on the petitioner No.1 on 9.5.1977 and on petitioner No.2 on 10.5.1977. This was beyond the period of six months prescribed under Section 110(2) and, thereforee, the show cause notice itself is bad in law and is liable to be set aside and all proceedings pursuant thereto are vitiated. This argument has been controverter by Mr. Nishakant Pandey, learned counsel for the respondent who submitted that the only consequence of the show cause notice not being served within six months of the seizure was that the goods were liable to be returned to the person from whose possession they were seized. This would have no effect on the proceedings pursuant to the show cause notice which would continue in terms of the provisions of Section 124 of the said Act. To appreciate the rival contention, it would be appropriate to set out the provisions of Section 124 of the said Act as well as those of Section 110(2) thereof:-
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 -
(a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty;
(b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and
c) is given a reasonable opportunity of being heard in the matter;
Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may at the request of the person concerned be oral.'
'110 (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized:
Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the [1Commissioner of Customs] for a period not exceeding six months.'
7.2. From a plain reading of the aforesaid provisions it is clear that Section 124 requires that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty. Thereafter, an opportunity of making a representation in writing within such reasonable time is to be granted and a reasonable opportunity of being heard is also to be provided. However, this Section does not in any manner prescribed any time frame as to when the notice in writing is to be issued. In other words, there is no time limit prescribed for the issuance of such a notice as contemplated under Section 124 (a) of the said Act. Now, looking at the provisions of Section 110(2), it is apparent that it relates only to the question of seizure of the goods. It clearly stipulates that if after the goods are seized under the provisions of Section 110 (1) of the said Act and no notice in respect thereof is given under Clause (a) of Section 124 within six months of the seizure of the goods, the goods are to be returned to the person from whose possession they were seized. The effect of not giving a notice within six months of the date of seizure is that the seized goods are liable to be returned forthwith to the person from whose possession they were seized. This is the total effect of the provision of Section 110(2) with regard to the non-issuance of a notice under Section 124(a) within six months of the date of seizure of the goods. I am in agreement with the submission of the learned counsel for the respondent that the only effect of any non-service of a show cause notice within the stipulated period of six months would be that the seized goods would be liable to be returned forthwith to the person from whose possession they were seized.
7.3. In the present case, this would imply that the said goods which were seized on 3.11.1976 became liable to be returned on the expiry of six months there from as no show cause notice had been issued till then. This, however, does not mean that if a show cause notice was issued after the expiry of the period of six months, it would be bad in law. This is because the show cause notice is issued under Section 124 which does not prescribe any such period of limitation. This is what the Supreme Court also clearly held in the case of Assistant Collector of Customs v. Charan Das Malhotra, : 1973ECR1(SC) :-
'Section 124 provides that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty. The Section does not lay down any period within which the notice required by it has to be given. The period laid down in Section 110(2) affects only the seizure of the goods and not the validity of the notice.'
Furthermore, in the case of Chaganlal GainmullVs. Collector of Central Excise and Others, 1990 (Supp) Supreme Court Cases 527, (at page 529, paragraph 5). The Supreme Court categorically held that 'the delay beyond six months in the issue of the show cause notice goes to and affects the power to detain the seized goods beyond six months and does not denude the adjudicating authority of the power to initiate proceedings even thereafter.' The Supreme Court, following the aforesaid two decisions, in the case of M/s. J.K. Bardolia Mills v. M.L. Khunger, Dy. Collector and Others, : 1994(72)ELT813(SC) held that the effect of non-compliance of the provisions of Section 110(2) would only be that the seized goods are to be returned to the person from whose possession they were seized. It would not render the initial seizure of the goods illegal.
7.4. In view of the foregoing discussion and particularly the pronouncements of the Supreme Court, it is clear that the non-issuance of the show cause notice within the prescribed period of six months would only result in the continuance of the seizure being bad and the petitioners' entitlement to the return of the said goods. It would not affect the validity of the seizure itself or the show cause notice which has yet to be adjudicated upon.
Question No.3:
8.1. It is Mr. Rawal's contention that once the bill of entry was assessed and goods were cleared for home consumption under Section 47 of the said Act and the same had left the control of the Customs Authorities, the Customs Authorities had no jurisdiction as regards the confiscation of the said goods. Mr. Rawal relied on several decisions of High Courts as well as of the Supreme Court in an attempt to support the aforesaid submission. The decisions relied upon by Mr. Rawal were, inter alia:-
1. Best & Crompton Engineering v. Collector of Customs, Madras. : 1997(93)ELT21(Mad)
2. Union of India and Others v. Popular Dyechem : 1987(28)ELT63(Bom) .
3. Collector of Customs, Cochin v. Arvind Export (P) Ltd.
4. Union of India v. Kamlakshi Finance Corporation Ltd. : 1991ECR486(SC) .
5. Union of India v. Tarachand Gupta and Bros., : 1983(13)ELT1456(SC) .
6. C.L. Jain Woollen Mills v. Union of India : 1995(79)ELT197(Del)
7. Titan Medical Systems Pvt. Ltd. v. Collector of Customs, New Delhi, : 2003(151)ELT254(SC) .
8. East India Commercial Co. Ltd., Calcutta v. Collector of Customs, Calcutta 1983 ELT 1342 .
9. Union of India v. Sampat Raj Dugar, : 1992(58)ELT163(SC)
10. Durga Prasad etc. v. H.R. Gomes, Superintendent (Prevention), Central Excise, Nagpur and another etc, : 1983(13)ELT1501(SC)
None of these decisions are directly on the point. However, the very question which is being raised by the learned counsel for the petitioner has been answered by the Supreme Court in the case of Union of India and Others v. Jain Shudh Vanaspati Ltd., And Another, : 1996(86)ELT460(SC) . In the case before the Supreme Court, the High Court had taken the view that no show cause notice under Section 28 or Section 124 could have been issued unless and until the order under Section 47 had been revised under the provisions of Section 130. In other words, the High Court therein was of the view that an order under Section 47 attained a certain finality and unless altered or modified in an appropriate proceedings, it could not be disturbed particularly by issuance of a show cause notice under Section 124. This is exactly what Mr. Rawal's contention is. This view of the High Court in that decision was negatived by the Supreme Court. The Supreme Court in paragraph 9 of the said decision held as under:-
'A clearance order under Section 47 obtained by fraudulent means such as this (if it, in fact, be so) cannot debar the issuance of a show-cause notice for confiscation of goods under Section 124. Fraud, if established, unravels all. An order under Section 47 obtained by the employment of fraudulent methods does not have to be set aside by the exercise of revisional powers under Section 130 before the ill effects of the fraud can be set right by initiation of the process of confiscation of the fraudulently cleared goods under Section 124.'
8.2. In response to the aforesaid decision of the Supreme Court Mr. Rawal contends that this decision is limited to cases of fraud and the present case is not one of fraud, thereforee, the aforesaid decision would not be applicable to the facts and circumstances of the present case. I am unable to agree with this submission. Who is to decide the question of fraud or fraudulent means? Is it the authorities under the statute or this Court in exercise of its writ jurisdiction? In the very decision in Jain Shudh Vanaspati's case (supra), the Supreme Court categorically held in paragraph 12 that:-
'.....the High Court ought not to have entered into the thicket of evidence. Evidence was something for the authorities hearing the parties under Sections 28 and 124 to accept and weigh. We do not approve of stultifying, in exercise of powers under Article 226, an investigation, still at the show-cause stage, by going into facts.'
In the said decision, it is further made clear as under:-
'It is relevant to bear in mind that the issuance of the show-cause notice under Section 124 contemplates that the respondents' response shall be considered and only thereafter will the matter be decided. The respondents shall, thereforee, have full opportunity to satisfy the authorities that there was no importation of banned goods which makes them liable to confiscation.'
In the present case, the petitioners have come to Court after the issuance of the said show cause notice. The issuance of the show cause notice has already been held to be valid. The mere clearance of the goods under Section 47 does not debar the issuance of a show cause notice under Section 124 as has been held by the Supreme Court.
9. In view of the answers to the aforesaid three questions as indicated above, the writ petition is liable to be dismissed. It is made clear that the non-issuance of the show cause notice within the stipulated six months period merely entitled the petitioners to the return of the seized goods without any conditions. The goods have already been returned vide order dated 6.12.1977 although, upon the imposition of the condition of a bank guarantee. That condition is removed by this order. The bank guarantee be returned to the petitioners and they may have the same canceled. The proceedings pursuant to the show cause notice shall be continued and after due compliance of the provisions of Section 124 the appropriate order be passed by the concerned authorities. As the matter has been pending since 1977 it is expected that the proceedings are completed as expeditiously as possible.
10. Accordingly, the writ petition is dismissed with no order as to costs.