Exim Corporation Vs Union of India & Ors
Bombay High Court
Date-09th December,2020
Sub:Detention of goods without issuing show cause notice u/s 124 of Customs Act and without effective seizure u/s 110 of the said Act – difference between “detention” and “seizure” explained- goods ordered to be released.

The Bombay High court in the above case was dealing with a case where Pistachio imported from California were detained on the pretext that the proprietor of the appellant was engaged in illegal acts of importing rough diamond stones of inferior quality at a higher price in order to send foreign exchange illegally out of India as there was no import duty on these imports and IGST was also chargeable only @ 0.25% and thus the entire consignment of pistachio needed to be examined in presence of the Proprietor and presence of proprietor was required even for warehousing u/s 49 of the Customs Act.
The court examined the Central Apprising Manual of the department which dealt with detention, seizure and storage of seized goods. The manual interpreted the words “detention” and “seizure” of goods in the context of the Customs Act. It was mentioned that in ordinary parlance, there is a distinction between ‘detain’ and ‘seize’: ‘detain’ means ‘to keep back, withhold; especially to keep back what is due and claimed’. ‘Seize’ means ‘to be in possession or take possession of goods in pursuance of an order; to take possession by force (The Oxford English Dictionary)’. ‘Seizure’ is not equivalent to ‘detention’ as the latter word involves the idea of keeping what has been seized. If this view is accepted, then detention would be at a stage post seizure. First there has to be seizure of the goods only whereafter the goods can be detained. In the instant case, admittedly there is no seizure. Therefore, there can be no detention. The court noted that the authorities did not follows the procedure laid down in Customs Act while detaining the goods for more than an year.
On these facts, the court relying upon several decisions held the detention of the goods to be illegal and ordered the goods to be released forthwith within a period of two weeks following legal process of law. The court also noted that this is a case where having regard to the unauthorized nature of prolonged detention it had considered imposing cost on the respondents but after thoughtful deliberation it has refrained from doing so for the moment. However, the court put respondents on notice that henceforth Court may consider imposition of cost if any instance of misuse of power or such unauthorized and unlawful action is found on adjudication.

Ramesh Patodia
12-12-2020