- 1 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 10492 OF 2025 (T-CUS) BETWEEN: M/S.MILAN METALS INDIA PROPRIETORSHIP FIRM GROUND FLOOR, OLD NO. 127 AND NEW NO. 127/6, 5TH CROSS, KALASIPALYAM NEW EXTENSION BENGALURU URBAN – 560 022 REPRESENTED BY ITS PROPRIETOR MR. JAYESH BHANSALI, S/O MR. BABULAL BHANSALI AND AGED ABOUT 37 YEARS. …PETITIONER (BY SRI RICAB CHAND K., ADVOCATE) AND: 1. UNION OF INDIA THROUGH ITS SECRETARY DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NO. 137, NORTH BLOCK, NEW DELHI – 110 001. 2. ASSISTANT COMMISSIONER OF CUSTOMS, (IMPORTS), INLAND CONTAINER DEPOT, KADUGODI, WHITEFIELD, BENGALURU – 560 066. Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 3. ADDITIONAL COMMISSIONER OF CUSTOMS, INLAND CONTAINER DEPOT, KADUGODI, WHITEFIELD, BENGALURU – 560 066. 4. ADDITIONAL DIRECTOR GENERAL, DIRECTORATE OF REVENUE INTELLIGENCE, BENGALURU ZONAL UNIT, NO. 8 (P), FIRST STAGE, 3RD BLOCK, HBR LAYOUT OPP. BDA COMPLEX, KALYANNAGAR POST, BENGALURU – 560 043. …RESPONDENTS (BY SRI S.R.DODAWAD, ADVOCATE FOR R-1; SRI ARAVIND V CHAVAN, ADVOCATE FOR R2 TO R4) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO A.HOLD AND DECLARE i) THAT THE RESPONDENT NOS. 2 AND 3 HAVE FAILED TO EXERCISE THE POWERS CONFERRED UPON THEM BY THE CUSTOMS ACT, 1962 AS WELL AS THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, IN DECIDING THE PETITIONER’S APPLICATIONS FOR WAREHOUSING AND RE- EXPORT, (ANNEXURES-D AND ANNEXURE-E HERETO), RESPECTIVELY IS BAD IN LAW; II. THAT THE PETITIONERS GOODS COVERED UNDER BILLS OF ENTRY AS LISTED IN TABLE-I HEREIN IN PARAGRAPH 6 ARE ILLEGALLY DETAINED SINCE NO SEIZURE MEMO HAS BEEN ISSUED TILL DATE; B) THAT THIS HON'BLE COURT MAY BE PLEASED TO ISSUE A WRIT OF MANDAMUS OR WRIT IN THE NATURE OF MANDAMUS OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION DIRECTING RESPONDENTS, THEIR SERVANTS, SUBORDINATES, AND AGENTS I. TO ALLOW THE PETITIONER’S APPLICATION FOR WAREHOUSING FILED ON 06.01.2025 (ANNEXURE-D HERETO); II. TO ALLOW THE PETITIONER'S APPLICATION FOR RE-EXPORT FILED ON 06.01.2025 (ANNEXURE-E HERETO); III. TO ISSUE A DETENTION-CUM- DEMURRAGE WAIVER CERTIFICATE IN TERMS OF REGULATION 6(1)(I) OF THE HANDLING OF CARGO IN CUSTOMS AREAS REGULATIONS, 2009, IN RESPECT TO THE DETAINED GOODS. - 3 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioner is before this Court seeking the following prayers: “a. That this Hon'ble Court may be pleased to hold and declare: i. that the Respondent Nos. 2 and 3 have failed to exercise the powers conferred upon them by the Customs Act, 1962 as well as the Central Board of Indirect Taxes and Customs, in deciding the Petitioner's Applications for Warehousing and Re-export, (Annexures 'D' and Annexure 'E' hereto), respectively is bad in law; ii. that the Petitioner's goods covered under Bills of Entry as listed in Table - I herein in paragraph 6 are illegally detained since no seizure memo has been issued till date; b. That this Hon'ble Court may be pleased to issue a Writ of Mandamus or Writ in the nature of Mandamus or any other appropriate Writ, Order or Direction directing Respondents, their servants, subordinates, and agents: i. to allow the Petitioner's Application for Warehousing filed on 06.01.2025 (Annexure 'D' hereto); ii. to allow the Petitioner's Application for Re- export filed on 06.01.2025 (Annexure 'E' hereto); - 4 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 iii. to issue a Detention-cum-Demurrage Waiver Certificate in terms of Regulation 6(1)(1) of the Handling of Cargo in Customs Areas Regulations, 2009, in respect to the detained goods; c. Such further and other reliefs in the nature and circumstances of the case may require.” 2. Heard Sri Ricab Chand K, learned counsel appearing for petitioner, Sri S R Dodawad, learned counsel appearing for respondent No.1 and Sri Aravind V Chavan, learned counsel appearing for respondents 2 to 4. 3. Brief facts, germane, are as follows: 3.1. The petitioner in the course and in furtherance of his business sought to import carbon steel products from China. The petitioner's suppliers in China are said to have supplied or shipped goods by way of 7 bills of lading and described them as carbon steel seamless pipes. Upon arrival of the aforesaid consignments, the petitioner filed 7 bills of entry between 17-11-2024 to 01-12-2024, for clearance. The details of bills of entry are narrated in the petition. - 5 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 3.2 On arrival of the said consignments, the same is examined and put on hold by the officers of the 4th respondent, who drew samples there-from and forwarded the same for further examination. When the goods were under examination, the petitioner, being unaware of the reasons for detention of the goods, is said to have contacted its suppliers with regard to the consignment, only to be informed that the shipped materials inadvertently are stainless steel pipes, instead of high carbon steel seamless pipes. Therefore, the suppliers agreed to take back the goods. The copies of the communications between the parties, is also appended to the petition. 3.3. On examination of the goods, it transpires that the 4th respondent investigating agency holds that instead of carbon steel products as declared, the petitioner's consignments contained stainless steel seamless pipes, which attract anti dumping duty, and therefore the goods covered under the bills of entry were sent for examination and detained by the 4th respondent. The goods continue to remain in detention and the petitioner submits an application placing all the facts seeking warehousing of the goods under Section 49 of - 6 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 the Customs Act, 1962 (‘Act’ for short). Since the consignments were under investigation, it was not cleared for a long time and unable to bear the demurrage charges which continued detention of the goods, the petitioner then files an application for warehousing of the goods, which is permitted at a later point in time. The petitioner, on 06-01-2025, sought permission for re-export of the goods before the 3rd respondent. The non- consideration of the application for re-export is what has driven the petitioner to this Court in the subject petition claiming the afore-quoted prayers, inter alia. 4. The learned counsel appearing for the petitioner would contend that the respondents/customs while detaining the goods have drawn three mahazars. This would not suffice to be in tune with the statute, it could be either seizure or confiscation. He would further contend that in terms of Section 110 of the Act, the maximum period with which the investigation should conclude when the goods are detained is 6 months. The proviso permits extension on reasons to be recorded in writing. He would submit that only the reasons to be recorded in writing would not suffice, but the person whose - 7 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 goods are detained will have to be heard in the matter when passing an order of extension. The same has not taken place in the case at hand. He would thus seek release of the goods and permit him to take further action in accordance with law. In the light of the detention of the goods beyond 6 months, the demurrage and detention charges should not be upon the petitioner, as it was the act of the respondent/customs contrary to the statute. He would, therefore, seek the prayers be allowed. 5. Per-contra, learned counsel appearing for the respondents 2 to 4 Sri Arvind V Chavan would submit that the statute permits extension. The extension is granted, but the notice as necessary under Section 110 though issued, there is no information regarding service of notice upon the petitioner. He would submit that, that would suffice in law and if this is permitted, it would become a precedent to several other cases. He would seek the permission of the Court to conclude the proceedings within an outer limit of 3 months and the consequences to follow later. - 8 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 6. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. 7. The afore-narrated facts, link in the chain of events are all a matter of record. What drives the petitioner to this Court is detention of the goods. The goods were detained on account of alleged wrong supply by the supplier in China. The wrong supply is admitted by the supplier and also undertakes that the goods would be taken back. The goods that are now brought to the shores of the nation does attract anti-dumping duty is what the customs would hold. The issue is not with regard to the merit of the claim whether the goods would incur duty or otherwise. It is again not in dispute that proceedings are initiated against the petitioner and investigation is pending. Such acts are governed by Section 110 of the Customs Act. It reads as follows: “110. Seizure of goods, documents and things.—(1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: 457[Provided that where it is not practicable to remove, transport, store or take physical possession of - 9 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 the seized goods for any reason, the proper officer may give custody of the seized goods to the owner of the goods or the beneficial owner or any person holding himself out to be the importer, or any other person from whose custody such goods have been seized, on execution of an undertaking by such person that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer: Provided further that where it is not practicable to seize any such goods, the proper officer may serve an order on the owner of the goods or the beneficial owner or any person holding himself out to be importer, or any other person from whose custody such goods have been found, directing that such person shall not remove, part with, or otherwise deal with such goods except with the previous permission of such officer.] 458[(1-A) The Central Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant consideration, by notification in the Official Gazette, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (1), be disposed of by the proper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified. (1-B) Where any goods, being goods specified under sub-section (1-A), have been seized by a proper officer under sub-section (1), he shall prepare an inventory of such goods containing such details relating to their description, quality, quantity, mark, numbers, country of origin and other particulars as the proper officer may consider relevant to the identity of the goods in any proceeding under this Act and shall make an application to a Magistrate for the purpose of— (a) certifying the correctness of the inventory so prepared; or (b) taking in the presence of the Magistrate, photographs of such goods, and certifying such photographs as true; or - 10 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 (c) allowing to draw representative samples of such goods, in the presence of the Magistrate, and certifying the correctness of any list of sample so drawn. (1-C) Where an application is made under sub- section (1-B), the Magistrate shall, as soon as may be, allow the application.] 459[(1-D) Where the goods seized under sub- section (1) is gold in any form as notified under sub- section (1-A), then, the proper officer shall, instead of making an application under sub-section (1-B) to the Magistrate, make such application to the Commissioner (Appeals) having jurisdiction, who shall, as soon as may be, allow the application and thereafter, the proper officer shall dispose of such goods in such manner as the Central Government may determine.] (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 they were seized: 460[Provided that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform the person from whom such goods were seized before the expiry of the period so specified: Provided further that where any order for provisional release of the seized goods has been passed under Section 110-A, the specified period of six months shall not apply.] (3) The proper officer may seize any documents or things which, in this opinion, will be useful for, or relevant to, any proceeding under this Act. (4) The person from whose custody any documents are seized under sub-section (3) shall be entitled to make copies thereof or take extracts therefrom in the presence of an officer of customs. - 11 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 461[(5) Where the proper officer, during any proceedings under the Act, is of the opinion that for the purposes of protecting the interest of revenue or preventing smuggling, it is necessary so to do, he may, with the approval of the Principal Commissioner of Customs or Commissioner of Customs, by order in writing, provisionally attach any bank account for a period not exceeding six months: Provided that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend such period to a further period not exceeding six months and inform such extension of time to the person whose bank account is provisionally attached, before the expiry of the period so specified.]” Section 110 deals with seizure of goods, documents or things that are liable for confiscation. Sub-section (2) of Section 110 mandates that when any goods are seized and no notice in respect thereof, is given under Section 124, within 6 months of seizure of the goods, the goods shall be returned to the person from whose possession they are seized. The proviso to the said section permits the Authority, to extend the period for another 6 months on sufficient cause, but not for a period beyond 6 months of the extension. Therefore, the conclusion of the proceedings once initiated, must happen within an outer limit of 1 year with conditions imposed thereon. - 12 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 8. Section 124 of the Act, which is also germane to be noticed, reads as follows: “124. Issue of show-cause notice before confiscation of goods, etc.—No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person— (a) is given a notice in 517[writing with the prior approval of the officer of customs not below the rank of 518[an Assistant Commissioner of Customs] informing] him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter: Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned, be oral. 519[Provided further that notwithstanding issue of notice under this section, the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed.]” Section 124 deals with issuance of notice before confiscation of goods. The confiscation of goods if has happened in the case at hand, the proceedings ought to have met its conclusion within - 13 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 6 months in terms of sub-section (2) of Section 110 or the goods to be returned from whose possession it was seized. 9. The learned counsel for the respondents, as observed hereinabove, is not in a position to demonstrate that the extension of the period of investigation as provided in the proviso to sub-section (2) of Section 110 were drawn or notice was issued to the person from whose possession it was seized, i.e., the possession of the petitioner. This being an admitted fact, the impact of the statute must follow. The goods were seized and were detained by drawing up 3 mahazars on 16-12- 2024. Therefore, the proceedings ought to have concluded on or before 15-06-2025. Admittedly, the proceedings even today are pending. The proviso permits extension. The extension is hedged with certain conditions. The condition is showing sufficient cause and hearing the person whose goods are seized. Showing sufficient cause is nowhere found even in the statement of objections filed by the respondents, nor the respondent has any information about the notice being served upon the petitioner, the person from whom the goods are seized. Therefore, there is violation of Section 110 of the Act. - 14 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 The violation of Section 110 would undoubtedly lead to the result of the violation. The result of the violation is also mandated under the statute itself, it would be release of the goods. Therefore, the respondents/customs will have to now bear with the rigor of the statute by releasing the goods that are detained, in favour of the petitioner. 10. The learned counsel for the petitioner at this juncture submits that they should not be imposed detention and demurrage charges, as the petitioner submitted an application seeking release of the detained goods into warehouses, which charges would have been 1/4th of what the charge is made by the customs for detaining it in their area. This is considered and allowed only in the month of July 2025. Therefore, the learned counsel submits that the detention and demurrage charges should not be imposed upon the petitioner. 11. The sole relief that can be granted to the petitioner is release of goods. Any other relief with regard to the detention or demurrage charges, the petitioner is at liberty to submit an application/representation to the respondents, which they will - 15 - HC-KAR NC: 2025:KHC:34936 WP No. 10492 of 2025 respond immediately in tune with the statute. It is made clear that the effect of this order is only release of goods, not the closure of the proceedings pending before it. It is for the Authorities to close the proceedings as expeditiously as possible. 12. For the aforesaid reasons, the following: ORDER (i) Writ Petition is allowed in part. (ii) The goods that are detained by the respondents shall now be released to the petitioner within two weeks from the date of receipt of the copy of this order. (iii) The petitioner is at liberty seek further action before the Authorities by submitting necessary application. Sd/- (M.NAGAPRASANNA) JUDGE BKP List No.: 1 Sl No.: 23