1 wpl 92733-20

Priya / BGP

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

Digitally CIVIL APPELLATE JURISDICTION
signed by
Balaji Balaji G.
Panchal
G.
Panchal
Date:
2020.11.05
11:19:42
WRIT PETITION (ST.) NO.92733 OF 2020
+0530

Mumbai Fabrics P. Ltd. … Petitioner

V/s.
Union of India and ors. … Respondents
---
Mr. Vikram Nankani, Senior Advocate with Dr. Sujay
Kantawala, Mr. Anupam Dighe, Ms. Chandni Tanna and Ms.
Shrushti Relekar i/by M/s India Law Alliance, Advocates for
the Petitioner.
Mr. Anil C. Singh, ASG with Mr. P. S. Jetly, Senior Advocate with
Mr. J. B. Mishra, Advocate for the Respondents.
Ms. S. D. Vyas, “B” Panel Counsel for the State.
---

CORAM : UJJAL BHUYAN &

ABHAY AHUJA, JJ.
RESERVED ON : OCTOBER 20, 2020
PRONOUNCED ON : NOVEMBER 5, 2020

P.C.:- (Per Ujjal Bhuyan, J.)

1. Heard Mr. Vikram Nankani, learned senior counsel
alongwith Dr. Sujay Kantawala, learned counsel for the
petitioner; and Mr. Anil C. Singh, learned Additional Solicitor
General alongwith Mr. Pradeep Jetly, learned senior counsel
for the respondents.

2. By fling this petition under Article 226 of the

Constitution of India petitioner seeks quashing of the seizure
memos dated 26th August, 2020 and further seeks a direction
to the respondents for release of the seized goods.
 2 wpl 92733-20

3. Question for consideration is whether the seized

goods imported by the petitioner are old and used rubber
tyres reusable as tyres or are old and used rubber tyres scrap
being in pressed baled form ?

4. Case of the petitioner is that it is a company

incorporated under the Companies Act, 1956 and is engaged
in recycling of “waste tyres scrap” into “rubber crumbs
granulation” at its factory. The process is a green category
industry and is environmentally friendly for which petitioner
has been granted consent by the Maharashtra Pollution
Control Board, Navi Mumbai on 11th February, 2019. Petitioner
has also been granted permission/no objection certifcate
dated 29th November, 2019 by the Ministry of Environment,
Forest and Climate Change, Government of India for import of
old and used rubber tyres scrap (multiple cuts/pressed baled/
shredded) for manufacture of crumb rubber.

5. Petitioner has been granted import license dated

27th December, 2019 by the Directorate of Foreign Trade,
Government of India for the import of old and used rubber
tyres scrap (multiple cuts/pressed baled/shredded). As per
the import license such imported goods have been classifed
under the customs tarif heading 4004000 which covers
waste, parings and scrap of rubber (other than hard rubber)
and powders and granules obtained therefrom.

6. On the basis of the consent of the Maharashtra

Pollution Control Board, permission/ no objection certifcate of
 3 wpl 92733-20

the Ministry of Environment, Forest and Climate Change,

Government of India and import license issued by the
Directorate of Foreign Trade, Government of India, petitioner
imported seven consignments of old and used scrap tyres in
pressed baled form at Nhava Sheva Port during the period
July - August, 2020 whereafter clearance of the consignments
were sought for by fling the following bills of entry:-
Bill of Entry No. Date
8252961 23.07.2020
8293747 27.07.2020
8288347 27.07.2020
8319380 29.07.2020
8325968 30.07.2020
8327426 30.07.2020
8325900 30.07.2020

7. It is stated that the imported goods were procured

from suppliers who deal in scrap and the source of
procurement is scrap yards. Invoices of the suppliers
described the imported goods as old and used scrap tyres in
pressed baled form.

8. Respondent No.4 who it is stated is the proper

ofcer under the Customs Act, 1962 (briefy “the Customs
Act” hereinafter) for examination, assessment and clearance
of imported goods at Nhava Sheva Port, ordered that the
imported goods be subjected to 100% examination under
docks supervision. Accordingly, the goods imported by the
petitioner were subjected to 100% examination and on
such examination it was found that those were tyres scrap in
pressed bale. After such examination respondent No. 4
assessed the imported goods to duty under the customs tarif
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heading 4004000 as waste and scrap of rubber. After the

assessment was made, petitioner paid the assessed duty.
Thereafter, respondent No.4 passed orders for clearance of
the imported goods i.e., out of charge.

9. However, before the imported goods could be

cleared from the Container Freight Station (CFS), respondent
No.3 directed the authorities at the CFS to put on hold the
seven consignments. This was followed by examination of the
goods by a customs approved Chartered Accountant. Based
on his report, fve seizure memos were issued from the ofce
of respondent Nos.2 and 3 dated 26 th August, 2020 in respect
of the consignments covered by fve bills of entry. As per the
seizure memos the imported goods detained were grossly
misdeclared and undervalued, thus, contravening provisions
of the Customs Act rendering those goods liable for
confscation. Accordingly, the goods were seized under
section 110(1) of the Customs Act. Such putting on hold and
thereafter seizure of the goods has been questioned by the
petitioner on the ground that when the proper ofcer i.e.,
respondent No.4 had subjected the goods to 100%
examination under docks supervision, thereafter assessed the
goods and levied duty, and upon payment of duty by the
petitioner had issued out of charge, respondent No.3 could not
have put on hold and seized the goods.

10. Respondent No.3 on 26th August, 2020 also called

upon the petitioner for submission of appropriate bond and
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bank guarantee as decided by the adjudicating authority for

provisional release of the seized goods.

11. According to the petitioner, the imported goods

are used scrap tyres in pressed bale; however, as per the
seizure memos which were on the basis of inspection report
of the Chartered Engineer respondent No.3 took the view that
a portion of the imported goods (30%) were found in usable
condition and those could be reused.

12. By letters dated 24th August, 2020 and 27th

August, 2020, both prior to and post seizure, petitioner
requested respondent No.3 that representative samples from
the disputed portion of the imported goods be drawn and
sent to the Indian Rubber Manufacturers Research
Association (IRMRA) for testing. It is stated that IRMRA is
an accredited laboratory of the Ministry of Commerce and
Industry, Government of India. When it was found that
respondent Nos.2 and 3 were not willing to draw such
samples for testing, petitioner requested IRMRA to depute
their technical ofcials for inspection of the goods. Following
such request IRMRA ofcials visited the place where the
seized goods were kept and carried out detailed inspection,
whereafter inspection report dated 31st August, 2020 was
issued. The inspection report confrmed that the imported
goods which have been seized are scrap tyres and cannot
be reused in any vehicle.
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13. It is further stated that respondent No.3 had

summoned and recorded the statements of Mr.Vishesh
Agarwal, Chief Executive Ofcer of the petitioner several
times. In all his statements Mr.Agarwal maintained that the
imported goods are used rubber tyres scrap only.

14. It is submitted that unless representative samples

are drawn from the disputed portion of the imported goods
and sent for testing, petitioner would not be in a position to
seek provisional release of the imported goods because once
the imported goods are out of customs control and become
unavailable, it would not be possible to decide whether the
imported goods are reusable as tyres or are scrap in the
absence of the test report. In this connection petitioner had
submitted representation dated 2nd September, 2020 before
the Chief Commissioner of Customs (Preventive). However,
there has been no response to the said representation.

15. On 9th September, 2020 ofcials working under

the third respondent drew up a panchnama wherein it was
recorded that as per petitioner’s request respondent No.3
had permitted handing over of samples to the petitioner.
Accordingly, fve tyres, one each from the containers covered
by the fve bills of entry which according to the Chartered
Engineer are usable, were handed over to the petitioner for
testing purpose. However, it was mentioned that customs
department has nothing to do with the testing and that the
above exercise has been facilitated only on the request of the
petitioner.
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16. It is under such circumstances that the present

writ petition has been fled by the petitioner seeking the
following reliefs:-
(a) to set aside and quash the fve seizure
memos dated 26th August, 2020 and the
panchnama dated 9 September, 2020 to the
th

extent it refuses to recognize the samples drawn

for testing;
(b) for a direction to the respondents to draw
samples jointly with the petitioner from the
disputed portion of the imported goods and to
send such samples to the IRMRA for testing to
ascertain whether those are usable in as is
condition as tyres; or in the alternative,
(c) to abide by the test report that may be
received in respect of the samples drawn on 9 th
September, 2020.
A further prayer has been made for a direction to
the respondents not to take any coercive action
against the petitioner and its ofcials.

17. An additional afdavit on behalf of the petitioner

has been fled by Mr. Vishesh Agarwal, Chief Executive Ofcer
of the petitioner. He has stated that pursuant to summons
issued by the customs authorities, he had attended ofce of
the customs authorities and his statement was recorded on
three occasions spanning several hours. According to him, he
had submitted all the records/documents which were asked
for and had fully co-operated with the customs authorities.
On one occasion, he was summoned by the customs
authorities at 8.30 p.m. However, when he reported, he found
the ofce to be closed. On another occasion, he was asked to
read section 135 of the Customs Act and was threatened.
 8 wpl 92733-20

17.1. It is stated that identical goods i.e. tyres scrap in

pressed baled form are being cleared by the customs
authorities. In this connection, petitioner has annexed a copy
of invoice of an importer by the name of Pragati Rubber.

17.2. Respondents had carried out search operations

/inspection in the factory premises of the petitioner on 8 th
August, 2020 and on 4th September, 2020. The inspecting
team verifed the plant and machinery used for manufacture
of crumb rubber and found that those were in operation.
Nothing incriminating was found in the factory premises of the
petitioner, though all the documents and computers were
taken away.

17.3. It is asserted that the goods imported are scrap

tyres and cannot be reused as such, which has been verifed
by the proper ofcer.

17.4. However, an ofer has been made on behalf of the

petitioner that since the preventive wing of the customs
department has some doubt about the nature of the imports,
petitioner is willing to mutilate the goods alleged to be
reusable scrap tyres for which petitioner would bear the cost.

18. On 17th September, 2020 this court directed the

respondents to fle afdavit.

19. Respondent Nos.1 to 4 have fled a common

afdavit. It is stated that specifc intelligence input was
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received that M/s. Mumbai Fabrics Private Limited i.e. the

petitioner is importing used tyres declaring the same as waste
and scrap of rubber falling under CTH 4004000. According to
the respondents, tyres can be declared as scrap under the
said CTH if and only if the bead wires are cut. This heading
allows import of used rubber tyres with one cut in bead wire
and import of used tubes cut in two pieces free from policy
restriction. On the basis of such intelligence input, the
containers corresponding to the seven bills of entry lying in
Dronagiri Rail Terminal, CFS were put on hold on 4 th August,
2020 for examination purpose. Examination was carried out
by the departmental ofcials and customs approved
Chartered Engineer. During examination, it was found that
the imported tyres covered by the bills of entry were in
pressed baled form. However, about 25% to 40% of the tyres
were found in good and in reusable condition with intact bead
wires and not completely worn out. Based on the above
observations, the consignments were detained for further
investigation.

19.1. Thereafter, the customs approved Chartered

Engineer submitted his report opining that 25% to 40% of the
tyres appeared to be reusable as such. Beads of the tyres
were intact and were found to be in good condition.

19.2. Based on the report of the Chartered Engineer, the

examined goods imported under fve bills of entry i.e. Bill of
Entry Nos.8319380 dated 29th July, 2020, 8325968 dated 30th
July, 2020, 8327426 dated 30th July, 2020, 8252961 dated 23rd
 10 wpl 92733-20

July, 2020 and 8293747 dated 27 th July, 2020 were seized

under section 110(1) of the Customs Act.

19.3. Referring to CTH 4012, it is stated that the said

heading deals with retreaded or used pneumatic tyres of
rubber, solid or cushion tyres, tyre treads and tyre faps of
rubber-retreaded tyres. All old and used tyres without bead
cut would fall under CTH 4012. Therefore, the contention is
that around 25% to 40% of the tyres in the import
consignment do not merit classifcation under CTH 4004000
as the important condition of the bead wire having one cut
has not been fulflled; those would fall under CTH 4012.

19.4. It is therefore contended that petitioner has

misinterpreted the description of import items by saying that
pressed baled would mean that the tyres are scrap. Again
referring to the report of the Chartered Engineer, it is stated
that he has certifed that 25% to 40% of the tyres are not
scrap and are reusable. Importer has not fulflled the
condition of single cut or multiple cuts in the imported tyre
bead, thus rendering the reusable tyres liable to confscation
under section 111(d) of the Customs Act.

19.5. It is also stated that respondents have no objection

to provisional release of the goods under section 110A of the
Customs Act on furnishing of appropriate bond and bank
guarantee.
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19.6. On the contention of the petitioner that since

respondent No.4 being the proper ofcer had examined,
assessed, cleared the goods and given out of charge it was
not open to respondent No.3 to further investigate and seize
the goods, it has been explained that the case was booked by
the preventive wing on specifc intelligence received.
Subsequent examination confrmed the intelligence input.
Adverting to various notifcations and circulars, it is stated
that ofcers of Mumbai Customs Preventive wing are declared
as ‘proper ofcer’ having over-riding jurisdiction for preventive
functions.

19.7. Referring to the additional afdavit fled by the

petitioner, it is stated that respondents have been following
all the laid down procedure of investigation. Allegation of
harassment has been denied. It is reiterated that action was
initiated on specifc intelligence input that the importer was
engaged in importing old and used tyres which are reusable
under the guise of rubber tyre scrap. Since the imported
goods are not rubber tyre scrap, they cannot be classifed
under CTH 4004000 even if they are in pressed baled form.

19.8. Referring to the report of the customs approved

Chartered Engineer, it is stated that he has not certifed that
pressing of bales has rendered the tyres unft for re-use.
Further, since he has certifed about the status of the
imported goods, there is no need for the customs department
to send the goods for testing. Acceptance of customs
 12 wpl 92733-20

approved Chartered Engineer’s certifcate is an established

practice of the department.

19.9. Customs Preventive Commissionerate is

investigating the petitioner as a case of misclassifcation of
goods that are imported in concealed manner as scrap tyres.

20. Another additional afdavit was fled on behalf the

petitioner on 12th October, 2020 contesting certain statements
made in the course of investigation by one Mr.Sabirali
Roshanali Shah, further reiterating that petitioner only imports
scrap tyres which are not reusable. It is stated that use of
scrap tyres as a raw material for production of rubber crumb
in the factory of the petitioner is being continuously monitored
by the Maharashtra Pollution Control Board. In this connection
letter dated 15th September, 2020 of the Maharashtra
Pollution Control Board has been annexed.

21. On 14th October, 2020 an additional afdavit on

behalf of respondents was fled. It is stated that in the course
of investigation, it was revealed that petitioner had issued
invoices to M/s Raza Tyre Services with description of goods
declared as ‘used tyre crumb’. On discreet inquiry it was
found that M/s Raza Tyre Services is a dealer in old, used and
scrap tyres. Search operation was carried out in the premises
of M/s Raza Tyre Services on 3 rd October, 2020. During the
search, invoices of the petitioner were recovered. Statement
of the proprietor of M/s Raza Tyre Services, Mr.Sabirali
Roshanali Shah was recorded on 3rd October, 2020 and 5th
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October, 2020 in which he stated that he had received tyres

from the petitioner in scrap as well as in usable condition. It is
stated that presently investigation is going on whereafter
appropriate show-cause notice would be issued.

22. When the case was heard next on 25 th September,

2020 court observed that petitioner should cooperate with the
investigation of the case and provide the necessary details. It
was directed that since the court was in the midst of hearing
the matter, parties should maintain status-quo as on 25th
September, 2020. Case was thereafter fnally heard on 20 th
October, 2020 when judgment was reserved.

23. Mr. Nankani, learned senior counsel for the

petitioner has referred to page 51 of the writ petition which
is an extract of the import policy containing schedule (1)
thereof. Under the heading 4004000 the items are expressed
as waste, parings and scrap of rubber (other than hard
rubber) and powders and granules obtained therefrom.
These are restricted items for import of which permission or
license would be required. However, as per the remarks
made in the remarks column, import of used rubber tyres
with one cut in bead wire and import of used rubber tubes cut
in two pieces however is free; no license is required for such
import. Referring to page 54 he submits that for the purpose
of the heading 4004000 the expression “waste, parings and
scrap” would mean rubber waste, parings and scrap from the
manufacture or working of rubber and rubber goods defnitely
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not usable as such because of cutting up, wear or for other

reason.

23.1. Mr. Nankani has referred to the ofce memo dated

29th November, 2019 of the Ministry of Environment , Forest
and Climate Change, Government of India whereby
permission for import of old and used rubber tyres scrap
(multiple cuts/pressed baled/shredded) to the petitioner has
been granted. He submits that on an application by the
petitioner Ministry has issued no objection certifcate to the
petitioner for import of 10,000 MT of old and used rubber
tyres scrap (multiple cuts/pressed baled/shredded) for
manufacturing of crumb rubber by the petitioner. According
to him, said permission was granted on the basis of site visit
report submitted by the Central Pollution Control Board and
after thread-bare discussion by the expert committee. For
rubber tyres to be treated as scrap it can be either having
multiple cuts or pressed baled or shredded i.e. in either of the
three forms. In the present case, it is pressed baled. He has
explained the process of baling stating that about 100 tyres
are pressed into a bale at a time and then high pressure of
about 200 tonnes are applied by a hydraulic baling machine
rendering the tyres as waste and scrap; totally unft for reuse.
He has also referred to the import export license
(authorization) dated 28th November, 2019 issued to the
petitioner by the Directorate General of Foreign Trade,
Government of India for importing old and used tyres scrap
(multiple cuts/pressed baled/shredded) for 10,000 MT.
 15 wpl 92733-20

23.2. Referring to the seizure memos he submits that

respondents acting on the report of the customs approved
Chartered Accountant have proceeded on the ‘reasonable
belief’ that the imported old and used scrap tyres in pressed
baled form contains usable tyres and therefore, there is
misdeclaration of the imported goods. He strenuously argues
that it is not open to the customs authorities to take a view
diferent from the licensing authority as to the defnition of
rubber tyre scrap. Such defnition given by the licensing
authority is binding on the customs authorities. In such a
case, it would not be a question of reasonable belief, he
submits. Going beyond such a defnition would be a
jurisdictional issue. In this connection, he has referred to a
decision of the Supreme Court in M G Abrol Vs. Shantilal
Chhotelal and Company, AIR 1966 SC 197 in support of
his contention that the view of the licensing authority would
be binding and the customs authorities would have no
jurisdiction to take a diferent view and then proceed on the
basis that there is misdescription of the goods.

23.3. According to Mr. Nankani, what the customs

authorities are insisting upon, that is, the used tyres should be
bead cut or should have multiple cuts to be considered as
scrap is self contradictory because in such a situation it
would be a free importable item for which no license or
permission would be required.

23.4. Mr. Nankani has referred to a letter dated 5 th

October, 2020 of the Ministry of Environment, Forest and
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Climate Change, Government of India addressed to the

petitioner on a clarifcation sought for by the petitioner on the
permission granted that old and used scrap tyres in pressed
baled form may be imported even without a cut in the bead
wire. In this letter Government of India has clarifed that old
and used rubber tyres scrap (multiple cuts/pressed
baled/shredded) for manufacturing of crumb rubber can be
imported and any one of the three conditions will make the
tyres unft for reuse. He submits that Government of India
has clarifed that petitioner can import used tyres scrap
either with multiple cuts or pressed baled or shredded for
manufacture of crumb rubber as per permission issued.

23.5. Mr. Nankani has also taken us to the report of the

Chartered Engineer and contends that the said report
sufers from several lacunas. The report was prepared most
perfunctorily without proper examination of the goods. In
such circumstances, it is beyond comprehension as to why
respondents should not accede to the prayer of the petitioner
for drawing samples of the seized goods and to get the
samples tested in an accredited laboratory like the IRMRA.
This is a very reasonable prayer of the petitioner, he submits

23.6. Finally, he submits that there is no justifcation at

all for seizure of the imported goods which should therefore
be released forthwith.

24. On the other hand, Mr.Anil C. Singh learned

Additional Solicitor General has referred to the prayer
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portion of the writ petition and submits that the reliefs

claimed besides being vague do not make out an actionable
cause of action for institution of a legal proceeding. He
submits that viewed in the above context the writ petition is
premature. Referring to the seizure memos he submits that
there is a reasonable belief formed on the basis of specifc
information and from the report of the Chartered Engineer
that in the guise of old and used scrap tyres in pressed baled
form petitioner is actually importing usable tyres. There is
clear misdeclaration of the goods which may warrant
confscation. Therefore, the customs authorities rightly
invoked the provisions under section 110(1) of the Customs
Act for seizure of the goods.

24.1. Mr. Singh submits that the report of the Chartered

Engineer clearly indicates that approximately 25% to 40%
of the imported tyres were found to be in good and in
reusable condition. Reiterating the contentions of the
respondents as pleaded in the afdavit in reply he submits
that all old and used tyres without bead cut would clearly
fall under CTH 4012. He has also drawn the attention of the
court to photographs of the tyres annexed to the afdavit in
reply and submits that the photographs clearly reveal the
reusable condition of the imported tyres.

24.2. On the prayer for mutilation of the tyres he

submits that the same is not acceptable at all at this stage. In
this connection, he has referred to a decision of the
Supreme Court in the Collector of Customs Vs. M/s
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Hardik International Corporation, AIR 1998 SC 823,

wherein the Supreme Court observed that the point of time
at which the respondents made the ofer of mutilation is
relevant. If at the very outset such ofer was made that could
have been a diferent matter but after the mischief is
detected if the ofer is made the same cannot be accepted.

24.3. He submits that petitioner will have all the

opportunity to defend itself and to prove its claim during the
stage of investigation and in the adjudicatory process that
would follow. No case for intervention at this stage is made
out. Writ petition should, therefore, be dismissed.

25. In his reply, Mr. Nankani submits that ofer of

mutilation was made only to show the bonafdes of the
petitioner which otherwise has a good case. It is a pragmatic
ofer and should be construed as such. Customs authorities
themselves and many courts are allowing mutilation at a later
stage.

26. Submissions made by learned counsel for the

parties have received the due consideration of the court. Also
perused the materials on record and the judgments cited at
the bar.

27. From an analysis of the above, the following facts

can be culled out. Ministry of Environment, Forest and
Climate Change, Government of India had issued ofce
memorandum dated 29th November, 2019 granting
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permission/no objection to the petitioner for import of 10,000

MT of old and used rubber tyres scrap (multiple cuts/pressed
baled/shredded) for manufacturing of crumb rubber. We also
fnd that Directorate General of Foreign Trade, Government of
India had issued import/export licence (authorisation) dated
28th November, 2019 to the petitioner for importing certain
restricted items which has been described as old and used
tyres scrap (multiple cuts/pressed baled/shredded). In terms
of such license, petitioner imported old and used scrap tyres
in pressed baled form covered by seven bills of entry which
were initially examined, assessed, duty paid and issued out of
charge by respondent No.4. However, on the basis of
information received that in the guise of old and used scrap
tyres pressed baled petitioner was importing reusable tyres,
respondent No.3 put on hold the consignments. Thereafter,
on the basis of report submitted by the Chartered Engineer
the imported goods covered by fve out of the seven bills of
entry were seized vide separate seizure memorandum dated
26th August, 2020.

28. Evidently there is a dispute between the petitioner

and the respondents regarding classifcation of the goods
imported. While according to the petitioner the goods
imported are old and used scrap tyres in pressed baled form
which being a restricted item is covered by the import license,
it is the stand of the respondents that 25% to 40% of the
imported goods were found to be tyres in good shape and in
reusable condition. Difering from the petitioner, it is
contended that old and used tyres without any bead cut would
 20 wpl 92733-20

fall under CTH 4012 which deals with retreaded or used

pneumatic tyres of rubber, solid or cushion tyres, tyre treads
and tyre faps of rubber retreaded tyres. However, petitioner
has contended and which has not been denied by the
respondents that respondent No.4 had carried out 100%
examination of the goods on arrival and thereafter levied duty
following which petitioner paid the assessed duty. Thereafter
out of charge was issued by respondent No.4.

29. Respondents have placed heavy reliance on the

report of the Chartered Engineer which has been severely
criticized by Mr. Nankani by pointing out what he termed as
grave faws in the report rendering it unft for any reliance.
However, we are of the view that when the matter is at a very
preliminary stage with investigation still on going, it would not
be proper to make any comment on the report of the
Chartered Engineer one way or the other. On the other hand,
it has been the consistent prayer of the petitioner that
samples should be drawn from the seized goods which should
thereafter be sent for testing to the IRMRA which is a
laboratory accredited to the Ministry of Commerce and
Industry, Government of India.

30. Having said so, we may refer to the panchnama

dated 9th September, 2020 drawn by the Inspector of Customs
(Prevention), Marine and Preventive Wing, Mumbai. Relevant
portion of the panchnama is extracted hereunder :-
“Then the ofcer allowed them to draw the three
samples from each of the containers, to which he
stated that they require only three tyres per Bill of
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Entry for testing. Accordingly, ffteen tyres (three

from each Bill of Entry) which appears to be
reusable, were drawn in presence of Chartered
Engineer, out of which fnally fve tyres (Sr No 1,
4, 7, 10 and 13 of Annexure) were sorted by Shri.
Vishesh Agarwal, as detailed in Annexure of this
Panchnama for testing purpose and the same
handed over to Shri. Vishesh Agrawal and it is
once again clarifed that the department has
nothing to do with the testing and this has been
facilitated on the request of M/s. Mumbai Fabrics
Pvt. Ltd.”

31. From the above, it is seen that three samples from

each of the fve seized containers were drawn, totalling ffteen
tyres which appeared to be reusable. This was done in the
presence of the Chartered Engineer. Out of the above, fve
tyres were fnally sorted by Mr. Vishesh Agarwal, Chief
Executive Ofcer of the petitioner for the purpose of testing
and which were handed over to Mr. Vishesh Agarwal.
However, the panchnama clarifed that customs department
has nothing to do with the testing and the above exercise has
been facilitated on the request of the petitioner.

32. Before dilating on this aspect, we also fnd that by

letter dated 26th August, 2020, Deputy Commissioner of
Customs (Prevention), Marine and Preventive, Mumbai had
written to the petitioner ofering provisional release of the
seized goods on submission of appropriate bond and bank
guarantee which has been reiterated by the respondents in
the afdavit in reply. Petitioner has averred in the writ
petition that it is hesitant to accept the said ofer of
 22 wpl 92733-20

provisional release because once the seized goods are out of

customs control without there being a test report, the
question as to whether the imported goods seized are
reusable as tyres or are scrap would not be possible to be
decided.

33. At this stage, we may advert to the provisions

contained in section 110 of the Customs Act. It deals with
seizure of goods, documents and things. Sub section (1) says
that if the proper ofcer has reason to believe that any goods
are liable to confscation under the Customs Act, he may seize
such goods. As per sub section (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 those were seized. As per the
frst proviso, the said period of six months can be extended to
a further period not extending six months. The second
proviso however says that in case of provisional release of the
seized goods, the specifed period of six months shall not
apply.

34. Section 110A deals with provisional release of

goods, documents and things seized (or bank account
provisionally attached) pending adjudication on taking a bond
with such security and conditions as the adjudicating
authority may require.
 23 wpl 92733-20

35. Confscation of improperly imported goods etc. is

dealt with in section 111 and as per clause (d) any goods
which are imported or attempted to be imported or are
brought within the Indian customs waters for the purpose of
being imported, contrary to any prohibition imposed by or
under the Customs Act or any other law for the time being in
force shall be liable to confscation.

36. However, section 124 mandates that there can be

no confscation or imposition of penalty without issuance of
show-cause notice and without giving a reasonable
opportunity of hearing to the owner of the goods or to the
person concerned.

37. From a conjoint reading of the aforesaid provisions

it is evident that seizure of goods is not an end in itself.
Goods can only be seized if the proper ofcer has reason to
believe that such goods are liable to confscation. Further
more, seizure cannot also be for an indefnite period. Timeline
is provided in sub section (2) of section 110. In case of
confscation, the statute has provided for the requisite
procedural safeguards in section 124. As a pragmatic
measure, provisional release of seized goods pending
adjudication is provided in section 110A.

38. Thus having regard to the dispute raised and the

statutory framework in place, we feel that it may not be
proper for the writ court to step in at this stage to render a
fnding as to whether the seized goods are old and used
 24 wpl 92733-20

rubber tyres scrap in pressed baled form or rubber tyre in

reusable form; in other words, whether the imported goods
fall under the customs tarif heading of 4004000 or under the
heading of 4012, which will basically be a fnding of fact.
Therefore, we are of the view that this aspect should be best
left to the adjudicating authority to decide, if it requires
adjudication. Preempting an adjudication on this issue by the
writ court by taking a view one way or the other may not be
justifed. Moreover, having regard to the provisions of section
110, it may also not be proper for the writ court to fx a
timeline for winding up of the investigation and for
commencement and completion of adjudication at a stage
when notice under section 124(a) of the Customs Act has not
yet been issued.

39. Having said so, it needs no reiteration that the writ

court is primarily concerned with the decision making process
and not with the correctness of the decision per se. The
decision making process and by extension the investigation
process has to be fair and reasonable, adhering to the due
process consistent with the principles of natural justice.

40. While respondents may place reliance on the report

of the Chartered Engineer, petitioner would have the right to
question the said report. Further more, request of the
petitioner to draw samples from the seized containers and
thereafter to send the samples for testing before an
accredited laboratory, in this case IRMRA, cannot be brushed
aside as being of no consequence. As a matter of fact,
 25 wpl 92733-20

respondents themselves have allowed the same vide

panchnama dated 9th September, 2020 though with the rider
that customs department would have nothing to do with the
testing; and that the drawing of samples for the purpose of
testing has been facilitated on the request of the petitioner.

41. We fail to understand the rationale behind such a

stand taken by the respondents. While respondents have
stated that getting the goods examined by a Chartered
Engineer is a well established departmental procedure, it is
also a well established departmental procedure that in the
case of seizure samples are drawn and then sent for testing in
accredited laboratory/laboratories. We see no harm in
acceding to such a request of the petitioner. Rather it will
only facilitate a fair investigation and consequently fair
adjudication. Test report from a laboratory which is accredited
to the Ministry of Commerce and Industry, Government of
India would certainly merit consideration being a relevant
document and should be considered alongwith all other
relevant documents including the report of the Chartered
Engineer by the investigating/adjudicating authority. After all
the procedure, be it investigation or adjudication, must not
only be fair but must also be seen to be fair.

42. That being the position, we are of the view that the
following directions will meet the ends of justice :-
I) Petitioner shall submit the samples in terms
of panchnama dated 9th September, 2020 to
an accredited laboratory, if not already
submitted, for testing and report of such
 26 wpl 92733-20

testing should be placed before the

respondents.

II) Such report in terms of direction (I) shall be

considered by the respondents and
authorities of the customs department
alongwith other relevant materials while
deciding the claim of the petitioner.

III) In view of directions (I) and (II) above,

petitioner may avail the ofer of provisional
release of the seized goods under section
110A of the Customs Act as per ofer letter
dated 26th August, 2020, which shall be
without prejudice to the claim of the
petitioner.

IV) Investigation and consequential steps,

including adjudication, if necessary, shall be
expedited.

43. Ordered accordingly.

44. We make it clear that we have not expressed any

opinion on merit. All contentions are kept open.

45. With the above directions, Writ Petition is disposed

of. However, there shall be no order as to costs.

46. This order will be digitally signed by the Private

Secretary/Personal Assistant of this Court. All concerned will
act on production by fax or email of a digitally signed copy
of this order.

(ABHAY AHUJA, J.) (UJJAL BHUYAN, J.)