Ganesh Sawant vs. Commissioner Of Customs (Appeals) & Ors.

Held

The Court held that the contention that no notice is required for proceedings under Section 110(1D) of the Customs Act is without merit. It reasoned that Section 110(1D) was introduced to substitute the authority before whom an application for certifying inventory, photographs, and samples is made, substituting the Magistrate with the Commissioner (Appeals). However, there was no amendment to the procedure to be followed. Therefore, the principles of natural justice, as established in cases like Smt. Maneka Gandhi and Ishwar Parasram Punjabi v. Union of India, apply equally to proceedings under Section 110(1D). The Court found that the decision in Pradeep Khandelwal v. Commissioner of Customs (Appeals) & Anr. was not based on concession but on established principles of natural justice and is a binding precedent. While the petitioner would ordinarily be entitled to have the proceedings conducted de novo, such an order is not warranted as the seized gold bar has already been sold. The petition is disposed of with these observations.

Facts

The petitioner, Ganesh Sawant, is engaged in the business of manufacturing and selling gold jewelry. On February 20, 2021, DRI officers seized five gold bars weighing 1000 grams each from his car. The seized goods were valued at ₹2,15,57,250/- (tariff value) and ₹2,34,00,000/- (market value). A show cause notice was issued on August 16, 2021. Subsequently, four gold bars were returned, leaving one gold bar retained by the authorities. Proceedings under Section 110(1D) of the Customs Act were conducted by the Commissioner of Customs (Appeals) on November 21, 2022, and permission for disposal of the seized gold was granted on November 24, 2022. A notice dated November 25, 2022, under Section 150 of the Customs Act informed the petitioner about the completion of proceedings and the impending disposal of the gold bar. The petitioner impugned this notice and sought de novo proceedings under Section 110(1D). The gold bar has since been disposed of.

Key Issues

1. Whether the proceedings conducted under Section 110(1D) of the Customs Act, 1962, by the Commissioner of Customs (Appeals) are vitiated due to the absence of notice to the petitioner from whom the goods were seized? Petitioner's Arguments: The petitioner contended that principles of natural justice mandate that notice be issued to the affected party before concluding proceedings under Section 110(1D) of the Customs Act. Reliance was placed on the High Court's decision in Pradeep Khandelwal v. Commissioner of Customs (Appeals) & Anr. (2022 SCC OnLine Del 1294), which held that notice and participation are required unless expressly excluded by the Act. Revenue's Arguments: The respondents argued that Section 110(1D) of the Customs Act does not require any notice to be served on the person from whom the goods are seized. They also contended that the decision in Pradeep Khandelwal was based on a concession and was not a binding precedent.