Punjab and Haryana High Court – Customs Law – DRI Seizure after Clearance of Goods Held Without Jurisdiction; Seized Stock Ordered to be Released
Case Name: M/s Raghav Woollen Mills Pvt. Ltd. v. Union of India & others with M/s PDG Wool Traders v. Union of India & others
Citation: CWP No. 23588 of 2016 & CWP No. 23611 of 2016
Date of Judgment: 7 January 2020
Bench: Justice Jaswant Singh and Justice Girish Agnihotri
Held: The Punjab and Haryana High Court quashed the seizure of imported synthetic/acrylic waste effected by the Directorate of Revenue Intelligence (DRI) after clearance of goods, holding it to be without jurisdiction. The Court emphasized that under Section 144 of the Customs Act, 1962, samples may be drawn only before clearance from customs area, and once goods are assessed and cleared, no fresh samples can be taken. The DRI’s action of re-drawing samples from the factory premises months later was illegal.
Summary: The petitioners, engaged in import of acrylic waste, had cleared consignments in early 2016 under provisional assessments. Customs officers drew samples at the time of clearance under Section 144 of the Customs Act, and final assessment was framed upon receipt of laboratory test reports. Bonds and bank guarantees were subsequently released.
On 11.08.2016, however, DRI officials searched the petitioners’ premises and seized goods alleging mis-declaration and undervaluation, drawing fresh samples for re-testing. Petitioners challenged the seizure as ultra vires.
The Court accepted the plea, holding that Section 144 permits sampling only before clearance from customs area, not thereafter from an importer’s premises. Once assessment was finalized and goods cleared, DRI lacked jurisdiction to seize or re-sample them. The seizure panchnamas dated 11.08.2016 and 06.10.2016 were therefore illegal.
Decision: Writ petitions allowed. Panchnamas dated 11.08.2016 and 06.10.2016 quashed. DRI directed to release seized material and return documents forthwith, within two weeks, failing which contempt proceedings and exemplary costs would follow.