2026-VIL-949-GUJ-CU
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CUSTOMS High Court Cases

Customs - Detention and seizure of imported vehicle - Distinction between detention and seizure under Customs Act - Petitioner purchased a Toyota Land Cruiser and upon arrival, Bill of Entry was filed with assessable value of 54,000 USD. The petitioner paid applicable customs duty - DRI conducted a search at residential premises and prepared a Panchnama directing petitioner not to deal with the car. A seizure memo under Section 110(1) was issued only on 17.04.2026, i.e., after more than one year, and thereafter show-cause notice was issued on 08.05.2026 under Section 124 of the Act - Whether detention of goods without a proper seizure order under Section 110(1) is valid and whether the limitation period under Section 110(2) for issuance of show cause notice applies from the date of detention or from the date of formal seizure order - HELD - Section 110 of the Customs Act uses the expression "reason to believe" that any goods are liable to confiscation, the proper officer may seize the goods. The first proviso uses the expression "where it is not practicable to remove, transport, the proper officer may give custody on execution of an undertaking". The second proviso further mentions "where it is not practicable to seize the goods". In either scenario, the proper officer is legally bound to satisfy a two-fold statutory obligation before passing a seizure order: first, he must explicitly record reasons that the goods are liable for confiscation, and second, he must record clear satisfaction by passing the order regarding the nature of goods under the respective provisos - The Panchnama cannot satisfy the ingredients of Section 110 of the Act, and an order is mandatory under the proviso to Section 110 for paving way for issuance of notice under Section 124 within a period of six months unless extended. The proper officer cannot consume a considerable period, such as over one year, to pass the seizure order under Section 110(1) after Panchnama was prepared by continuing the detention of the vehicle. When the seizure memo travels beyond the period of one year, the time limit of six months as mentioned in Section 110(2) and the further period of six months as envisaged under the proviso to sub-section (2) of Section 110 will get consumed – The respondents have detained the car vide Panchnama dated 07.02.2025, and in fact the seizure order under Section 110(1) has been passed after a period of one year on 17.04.2026, and in order to escape the limitation of six months, the Notice for confiscation under Section 124(a) of the Act has been issued on 08.05.2026. The order of provisional release dated 18.05.2026 is also illegal, as the conditions mentioned are premised on paragraph No. 2 of Circular No. 35/2017 dated 16.08.2017, which has been struck down by the Delhi High Court - The respondents are directed to release the vehicle. Costs of 10,000 rupees are imposed on the respondents – The petition is allowed
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