C/SCA/6295/2025(GJHC240287022025) CAV JUDGMENT DATED: 25/08/2026

Reserved On : 21/08/2026

Pronounced On : 25/08/2026

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/SPECIAL CIVIL APPLICATION NO. 6295 of 2025

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE A.S. SUPEHIA Sd/-

and

HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI Sd/-

=============================================

Approved for Reporting Yes No

✔

=============================================

PRANAVBHAI AMBALAL PATEL S/O SHRI AMBALAL PATEL

Versus

ADDITIONAL DIRECTOR GENERAL DIRECTORATE OF REVENUE

INTELLIGENCE AHMEDABAD & ORS.

=============================================

Appearance:

MS ANJALI JHA MANISH WITH MR PARAS ANEJA WITH MR CHETAN K

PANDYA(1973) for the Petitioner(s) No. 1

MR UTKARSH R SHARMA(6157) for the Respondent(s) No. 1,2,3

=============================================

CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA

and

HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

CAV JUDGMENT

(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)

1.In the present writ petition, the petitioner has assailed

the action of the respondents in detaining his car, which was

imported against Bill of Entry No.7472252 dated 26.12.2024.

BRIEF FACTS:

2.The petitioner purchased a vehicle, being a Toyota Land

Cruiser, for a total price of USD 54,000 from Japan on

13.12.2024. The car was shipped against a Sea Waybill/Bill of

Lading on 23.12.2024. Upon arrival of the goods, Bill of Entry

bearing No.7472252 dated 26.12.2024 was filed after declaring

the description of the vehicle and an assessable value of USD

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54,000. The out-of-charge was given to the petitioner on

02.01.2025, after proper assessment and examination.

3.The petitioner paid stamp duty of Rs.14,621 on the

vehicle on 30.12.2024 and also paid the applicable customs

duty amounting to Rs.99,78,795/- on 31.12.2024. The

petitioner also got the car insured. However, the registration

number was awaited.

4.On 07.02.2025, the Directorate of Revenue Intelligence

(DRI) conducted a search at the residential premises of the

petitioner, detained the imported car under a Panchnama

prepared on the said date, and further directed the petitioner

not to deal with the said car. Summons were issued by the DRI

on 14.02.2025 and 03.03.2025, asking the petitioner to appear

in connection with the inquiry conducted into the import of the

car. On 10.03.2025, the petitioner authorised his son to appear

in connection with the summons dated 03.03.2025. Another

summons dated 21.03.2025 was also issued to the petitioner.

However, the petitioner could not appear on the said date. On

04.04.2025, the petitioner supplied the documents which were

in his possession and also tendered an explanation. Thereafter,

the petitioner filed the present writ petition.

5.It appears that during the pendency of the writ petition,

the Senior Intelligence Officer, DRI, Zonal Unit, Ahmedabad,

issued a seizure memo on 17.04.2026 under Section 110(1) of

the Customs Act, 1962 (for short, “the Act”), and, on

08.05.2026, a show-cause notice under Section 124 read with

Section 28(4) of the Act was issued to the petitioner.

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SUBMISSIONS ON BEHALF OF THE PETITIONER :

6.Learned advocate Ms.Anjali Jha Manish assisted by

learned advocate Mr.Paras Aneja and learned advocate

Mr.Chetan K. Pandya, appearing for the petitioner, at the

outset, has submitted that the action of the respondents in

detaining the car of the petitioner runs contrary to the

statutory provisions of Section 110(2) of the Act and the

decision of the Supreme Court in the case of Union of India Vs.

Jatin Ahuja, (2025) 36 Centax 301 (SC). It is submitted that

since the show-cause notice under Section 124 of the Act has

been issued beyond the period of six months, the seizure

automatically lapses. It is further submitted that no detention

order has been passed by the authorities.

7.While inviting the attention of this Court to the interim

order dated 18.09.2025 passed by the Coordinate Bench and

the subsequent orders, she has submitted that the

investigation was over on 08.05.2026. She has further

submitted that the interim order was challenged by the

petitioner before the Supreme Court by filing Special Leave to

Appeal (Civil) No.12431 of 2026, and vide order dated

10.04.2026, the Apex Court directed the department to

complete the inquiry by acting promptly, and the issue of the

legality and validity of the detention of the vehicle was kept

open. It is submitted that only after the aforesaid order of the

Supreme Court was passed, the seizure memo was issued on

17.04.2026 under Section 110 of the Act, and the show-cause

notice was issued on 08.05.2026 under the provisions of

Section 124 of the Act. She has also submitted that the order

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of provisional release was passed on 18.05.2026 by placing

reliance on Circular No. 35/2017-Customs dated 16.08.2017,

more particularly paragraph No. 2 thereof, which has been

struck down by the Delhi High Court in the case of Shanus

Impex vs. Union of India, 2024 (388) E.L.T. 78 (Del).

8.Learned advocate appearing for the petitioner has further

submitted that, in fact, an incorrect statement was made

before the Supreme Court on behalf of the DRI to the effect

that the pendency of the writ petition before the High Court

came in the way of the department initiating appropriate

proceedings under Section 110 of the Act, whereas there was

no stay on the investigation. She has further stated that the

learned ASG had admitted that there was no seizure on record.

Thus, it is urged that the respondents may be directed to

release the car of the petitioner. In this context, reliance is

placed on the decision of the Delhi High Court in case of

Worldline Tradex Pvt. Ltd. Vs. Commissioner of Customs

(Import), 2016(340) ELT 174(Del).

SUBMISSIONS ON BEHALF OF THE RESPONDENT – AUTHORITIES :

9.Opposing the aforesaid submissions and the present writ

petition, learned Senior Standing Counsel Mr.Utkarsh Sharma,

on instructions, has pointed out that this Court may order the

release of the vehicle on any of the conditions as may be

determined by this Court.

10.Learned Senior Standing Counsel Mr. Sharma has further

submitted that the respondents did not issue the seizure

memo earlier in view of the interim order dated 18.09.2025

passed by this Court.

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11.It is submitted that now the investigation is over and,

accordingly, necessary further action will be taken by the

respondent department in accordance with law.

ANALYSIS AND OPINION :

12.Heard learned advocates appearing for the respective

parties, at length.

13.The established facts from the record are as under:

(A) The petitioner purchased a Toyota Land Cruiser car on

13.12.2024 and, upon the arrival of the goods, Bill of

Entry bearing No. 7472252 was filed on 26.12.2024.

(B) The petitioner paid the total applicable duty of Rs.

99,78,795/- on 31.12.2024.

(C) The DRI conducted a search at the residential

premises of the petitioner on 07.02.2025 and prepared a

Panchnama.

(D) The Panchnama records that the DRI officers directed

the petitioner not to deal with or part with the car until

the inquiry was completed.

(E) The petitioner filed the writ petition before this Court

and, by an order dated 18.09.2025, the Coordinate

Bench, after hearing the learned advocates for the

respective parties, directed the respondent officers to

take the vehicle into custody and to keep it in a safe

place during the pendency of the petition. Further

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directions were also issued to the respondents to conduct

a thorough investigation into the transactions relating to

the purchase of the car. The statement of learned Senior

Standing Counsel Mr.Sharma was recorded that the

investigation report would be submitted before this Court

on or before 09.10.2025.

(F)Further, an order dated 06.11.2025 passed by this

Court reflects that the investigation was not completed.

The statement was recorded that the petitioner, though

he had appeared twice before the respondent authorities

and handed over the requisite documents, and his son

had also appeared twice before the respondent

authorities, the investigation was not completed.

Accordingly, this Court directed the respondent

authorities to complete the investigation by the next date

of hearing, and the matter was posted on 27.11.2025.

Finally, the investigation was completed on 08.05.2026.

(G)The petitioner challenged the orders dated

18.09.2025 and 09.10.2025 by filing a Petition for Special

Leave to Appeal (C) No. 12431 of 2026, which was

disposed of by order dated 10.04.2026 by the Supreme

Court, inter alia, recording the statement of the learned

ASG to the effect that the pendency of the writ petition

before the High Court came in the way of the department

in initiating appropriate proceedings under Section 110 of

the Act. A further statement was recorded that there was

no seizure on record. The Supreme Court directed the

department to act promptly, as the car was a perishable

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commodity, and the issue of the legality and validity of

the detention of the vehicle was kept open.

(H)After the aforesaid order was passed, a seizure

memo under Section 110(1) of the Act was issued on

17.04.2026 and thereafter, a show-cause notice dated

08.05.2026 was issued under Section 124 read with

Section 28(4) of the Act. Finally, an order dated

18.05.2026 was issued by the respondent authorities for

the provisional release of the seized vehicle by resorting

to paragraph No.2 of Circular No.35/2017 dated

16.08.2017, which prescribes the duty/differential duty

leviable on the seized goods, the amount of fine and the

amount of penalties to be levied under the Customs Act.

14.At this stage, we may mention that paragraph No.2 of

Circular No.35/2017 dated 16.08.2027 has been set aside by

the Delhi High Court in the case of Shanus Impex (supra ) to

the extent that it curtails the discretion accorded to the

adjudicating authority. Despite the setting aside of paragraph

No.2 of the said Circular, the respondent-Department has

resorted to the same and ordered the provisional release by

directing the petitioner to execute a bond for the assessable

value of Rs.85,95,860/- with an undertaking that the importer

shall pay the duty, fine and/or penalty as may be adjudged by

the adjudicating authority and also execute a bank guarantee

of Rs. 1,20,00,000/- to cover the differential duty, potential fine

and penalties. Hence, the action of the respondents is in fact

contumacious, and is strongly deprecated.

15.The aforesaid facts indicate that though the Panchnama

was prepared on 07.02.2025, whereby the petitioner was

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directed by the DRI officers not to deal with or part with the

said car till the inquiry was completed, the seizure memo

under Section 110(1) of the Act was issued on 17.04.2026, i.e.

almost after a period of more than one year. The DRI, before

the Supreme Court and this Court, has blamed the pendency of

the present writ petition for not resorting to the proceedings

under Section 110 of the Act.

16.We may clarify that this Court never prevented the

officers of the DRI from completing the investigation or

conducting the proceedings under the Customs Act. On the

contrary, the order dated 18.09.2025 reflects that this Court

directed the respondent officers to conduct a thorough

investigation and the learned Senior Standing Counsel made a

statement that the investigation report would be submitted on

or before 09.10.2025. Further, on 09.10.2025, the Coordinate

Bench passed the order directing the respondents to carry out

the investigation at the earliest and file a confidential report

before this Court on or before the next date of hearing, and the

matter was listed on 16.10.2025. A statement was recorded of

the learned advocate appearing for the petitioner that the

petitioner was ready and willing to cooperate with the

investigation.

17.Further, the order dated 16.10.2025 records the

statement of the learned Senior Standing Counsel appearing

for the DRI that the investigation was under process and would

be completed, and the Court directed that the same be

completed before the next date of hearing. The matter was

ordered to be listed on 06.11.2025. On 06.11.2025, the Court

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again recorded the statement of the learned Senior Standing

Counsel appearing for the DRI that the petitioner was not

cooperating in the inquiry, which was opposed by the learned

advocate appearing for the petitioner, who submitted that, in

fact, the petitioner, along with his son, had appeared twice

before the respondent authorities and had handed over the

requisite documents. The Court directed that the report of the

investigation be produced by the next date of hearing, and the

matter was listed on 27.11.2025. When the matter was listed

on 18.12.2025, a statement of the learned Senior Standing

Counsel appearing for the DRI was recorded that the report

dated 26.11.2025 had already been prepared and had been

handed over to the learned advocate appearing for the

petitioner.

18.Thus, all the aforesaid orders reflect that this Court never

restricted the respondents from carrying out the investigation

and proceedings under the Act, including the proceedings

under Section 110 of the Act. Thus, a bald statement has been

made before the Supreme Court that the pendency of the writ

petition before this Court prevented the DRI from initiating

appropriate proceedings under Section 110 of the Act, and that

there was no seizure memo which was passed. Before this

Court, the DRI never raised the objection that it had not

initiated proceedings under Section 110 of the Act and was

prevented from undertaking such proceedings because of the

pendency of the writ petition. No efforts are made by the

respondents to inform this Court in this regard, and in fact the

order sheets reflects that the time is consumed by the

respondents. The respondents have attempted to justify their

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remissness on the pendency of the writ petition. Pertinently,

after the order was passed by the Supreme Court on

10.04.2026, the seizure memo was issued on 17.04.2026

under the provisions of Section 110 of the Act, after a period of

one year, and thereafter, the notice under Section 124 of the

Act was issued on 08.05.2026.

19.Keeping in mind the aforesaid facts, we may refer to the

decision of the Supreme Court in the case of Jatin Ahuja

(supra). The Supreme Court, after examining the provisions of

Section 110(2) and Section 124(a) of the Act in the case of the

seizure of a car read with Instruction No.1/2017-Cus. dated

08.02.2017, has held thus:

“19. In the case in hand, indisputably the car was seized

under sub-section (1) and furthermore no notice in

respect of the goods seized was given under clause (a) of

section 124 of the said Act within six months of the

seizure. The consequence, therefore, in such a case is

that the goods shall be returned to the person from

whose possession they were seized. The first proviso to

sub-section (2) of section 110 of the said Act, however,

provides that the Principal Commissioner of Customs or

Commissioner of Customs may, for reasons to be

recorded in writing, extend the six months' period by a

period not exceeding six months and inform the person

from whom such goods were seized before the expiry of

the period so specified. The proviso therefore

contemplates that the period of six months mentioned in

sub-section (2) of section 110 of the said Act can be

extended by the higher authority for a further period not

exceeding six months, for reasons to be recorded in

writing. The proviso also requires the higher authority to

inform this to the person from whom such goods were

seized before the expiry of the period of six months

mentioned in sub-section (2) of section 110. We find that

in respect of the seized car, there is neither any notice

under clause (a) of section 124 issued to the respondent

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within six months of the seizure nor the period of six

months ever came to be extended for a further period of

six months. In the absence of there being any notice as

required by the first proviso even within the extended

period upto one year, the consequence that ought to

follow is release of the seized car.”

20.Thus, as per the decision of the Supreme Court, if the

goods are seized under sub-section (1) of Section 110 of the

Act, the notice is required to be issued within a period of six

months under Section 124(a) of the Act, which can be

extended to a further period of six months by resorting to first

proviso under Section 110(2) of the Act, and if, in the absence

of there being any notice as required by the first proviso even

within the extended period of up to one year, the consequence

that ought to follow is the release of the seized car.

21.The relevant part of Section 110 is as under:

“SECTION 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:

[PROVIDED that where it is not practicable to remove, transport,

store or take physical possession of 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

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shall not remove, part with, or otherwise deal with such goods

except with the previous permission of such officer.]

xxxxx

(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:

[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.”

22.In the present case, the panchnama was prepared on

07.02.2025, through which the petitioner was directed not to

deal or part away with the car. The Act does not define either

detention or seizure. The Law Dictionary states “detention” is

the act of keeping back or withholding, either accidentally or

by design, a person or thing. Thus, by a panchnama, the car of

the petitioner was detained. The proviso to Section 110(1) of

the Act prescribes the process to be undertaken by the proper

officer in the eventuality where where it is not practicable to

remove, transport, store or take physical possession of the

seized goods for any reason. In such cases, the proper officer

may give custody of the seized goods to the persons as

mentioned therein, 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. The second proviso further stipulates that where it is

not practicable to seize any such goods, the proper officer may

serve an order on such person, directing that such person shall

not remove, part with, or otherwise deal with such goods

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except with the previous permission of such officer. In the

instant case, it is not the case of the respondent-department

that the car which was ordered to be detained would fall within

the categories of the goods as mentioned in the first proviso.

Thus, the proper officer was required to pass an order under

second proviso, which is not done. In this context, we rely upon

the judgement of Delhi High Court in the case of Worldline

Tradex Pvt. Ltd. (supra).

“17. Mr Agarwala drew the attention of the Court to the

proviso to Section 110(1) of the Act which envisages a

situation where it is not practical to seize imported goods. The

proviso states that in such instance "the proper officer may

serve on the owner of the goods an order that he shall not

remove, part with, or otherwise deal with the goods except

with the previous permission of such officer".

18. In the present case, as already noted, no order was served

on the owner of the goods in terms of proviso to  Section

110(1) of the Act. What the panchnama talks of is the

custodian being told by the DRI not to remove, part with or

otherwise deal with the goods. Clearly, therefore, no action

was proposed and, in fact, taken in terms of the proviso

to Section 110(1) of the Act, which is the only exception to not

immediately seizing the goods. It appears to be imperative

that if the proper officer decides to seize the goods, then he

must record first reasons to believe that such goods are liable

to be confiscation under the Act.

19. In R.S. Seth Gopikisan Agarwal (supra) the Supreme Court

discussed Section 105 of the Act dealing with search and

not Section 110 of the Act which deals with seizure. In any

event, even the Supreme Court did not suggest that no

reasons at all are required to be given for a search

undertaken under Section 105 of the Act. In para 7 the

Supreme Court observed that the Customs Officer "doubtless"

has to indicate "broadly the nature of the documents and the

goods in regard to which the officer authorized by him should

make a search, for without that his mandate cannot be

obeyed". While the Supreme Court observed that the specific

particulars need not be mentioned, it did not dispense with

the recording of reasons for the action taken under  Section

105 of the Act.

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20. Even the decision in S.J. Fabrics Pvt. Ltd. v. Union of

India (supra) does not suggest that the proceedings

under Section 110(1) of the Act is not to be followed. The

above observations in para 6 of the decision are relevant in

the context of the computation of the period of limitation for

the purposes of issuance of the show cause notice

under Section 124(a) of the Act. The said decision does not

suggest that for effecting a seizure under Section 110(1) of

the Act, no order is required to be passed by the proper

officer.

21. None of the above decisions is an authority for the

proposition sought to be advanced by Mr. Agarwala that

detention and seizure is one and the same thing. On the

contrary, the decisions of the Punjab & Haryana High Court

referred to by learned counsel for the Petitioner hold to the

contrary. Both in Mapsa Tapes Pvt. Ltd. v. Union of

India (supra) and Om Udyog v. Union of India (supra) the High

Court was concerned with the similar situation of detention of

the goods without recording reasons to believe that seizure of

the goods was warranted under Section 110(1) of the Act. The

following discussion in Mapsa Tapes Pvt. Ltd. v. Union of

India (supra) supports the case of the Petitioner that, for there

to be a valid seizure of the goods it is incumbent on the

proper officer to record reasons to believe, under  Section

110(1) of the Act, that the goods are liable to be confiscated:

"23. The case in hand, in our opinion, will fall within the

four corners of Section 105 of the Act as in the present

case the seizure of the goods was preceded by search. It

is even evident from panchnama dated 8-2-2005

(Annexure P. 3) attached with the writ petition.

24. In the present case, what to talk of respondents

themselves producing the records to show recording of

reasons, even in spite of specific query by the court,

nothing has been produced before us to show as to

whether reasons were recorded or not before the search

was authorised or the seizure took place. All what has

been relied upon is the report of Directorate of

Revenue Intelligence, Delhi Zonal Unit (DRI) which is

much prior to the date of seizure and important aspect of

the matter is that the goods were cleared under Section

47 of the Act after the above report was available with

DRI. Further, undisputed allegations of the petitioners are

that even after the clearance of the consignment, seizure

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of which is in question, in the present petition a number

of consignments were cleared by the respondents

under Section 47 of the Act under similar circumstances.

25. We are of the view that while existence power of

seizure may be justified but its exercise will be liable to

be struck down unless 'reasons to believe' were duly

recorded before action of search and seizure is taken,

which has not been done in the present case because the

respondents have not been able to satisfy the court that

due process of law was followed while taking drastic step

of search and seizure in the case of the petitioner. On this

ground alone, we are of the view that action of search

and seizure is liable to be quashed and accordingly we

answer the second issue in favour of the petitioner and

against the revenue.

26. Before parting with the judgment, we make it clear

that we are not going into question of alleged liability for

undervaluation or mis-description or any other

consequence or the liability of the petitioners as a result

of pending show cause notice issued to the petitioners...."

22. In Om Udyog v. Union of India  (supra), in similar

circumstances, the Court directed immediate release of the

goods since "the Department had not shown prima facie case

for exercise of powers of confiscation and has only relied upon

existence of power". The Gujarat High Court in Baboo Ram

Hari Chand v. Union of India (supra) negatived the plea of the

Department that seizure and confiscation were one and same

thing. In that case the panchnama  was projected as the

seizure order. The Court observed that "such composite order

is unheard of". It further observed:

"27. Technically, asking the party to submit fresh PD

Bonds for a period of six months on one hand and

proceeding to seize the goods on the other hand may not

perhaps be faulted with, however, burden lies on the

authority to explain rationale to rush into seizure/

confiscation of the goods in such circumstances, the

reason is the „proper officer‟ cannot proceed to seize the

goods under Section 110 of the Act unless he has reason

to believe. The authority would exercise drastic powers to

seize the goods only in case wherein it has reason to

believe that the goods is liable to be confiscated. The

powers to seize and the power to confiscate are quite

drastic powers. Little elaboration would show apparent

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inconsistency in the conduct of the respondent, from

which it can be said that formation of belief for seizure by

the respondent is vitiated...."

23. The power of seizure under Section 110 of the Act has to

obviously be exercised for valid reasons. The proper officer

has to record his reasons to believe that the goods that he

proposes to seize are liable to confiscation. The said reasons

for exercise of the power have to be recorded prior to the

seizure. In the present case, as already noticed, apart from

the panchnama, there is no separate order passed

under Section 110(1) of the Act by the proper officer recording

the reasons to believe that the goods are liable for

confiscation. Since till date no other order exists and no such

order has been communicated to the Petitioner, it is not

possible to accept the plea of Mr Agarwala, learned counsel

for the DRI, that the 'detention' of the goods by the DRI was

with the authority of law and in any event should be

treated as a seizure in terms of Section 110(1) of the Act.”

23.The Delhi High Court in a similar issue, wherein the owner

of the goods was directed not to remove or part with the goods

through a panchanama, has held that it is imperative for the

proper officer to pass a separate order as stipulated in the

proviso of Section 110(1) of the Act, and record that the goods,

which he/she proposes to seize are liable to be confiscated. It

is held that the “detention” of goods by the DRI cannot be

treated as “seizure” in terms of Section 110(1) of the Act. In

the instant case, after the order dated 10.04.2026 was passed

by the Supreme court , the seizure order has been issued on

17.04.2026 under Section 110(1) of the Act, which means that

the car was under detention bereft of any order passed under

the provisos under Section 110(1) of the Act, and thereafter,

the show-cause notice was issued on 08.05.2026 under the

provisions of Section 124 of the Act for confiscation, which is

within the limitation period of six months as prescribed under

the provisions of Section 110(2) read with Section 124(a) of the

Act.

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C/SCA/6295/2025(GJHC240287022025) CAV JUDGMENT DATED: 25/08/2026

24.We may, at this stage, incorporate the relevant extract of

Instruction No.1/2017-Cus. [F. No. 591/04/2016-Cus. (AS)],

dated 08.02.2017, which has been considered by the Supreme

Court in the case of Jatin Ahuja(supra). The Circular is as

under :-

“Instruction No.01/2017-Cus. (F. No. 591/04/2016-Cus.

(AS)) dated 8.2.2017

Government of India

Ministry of Finance (Department of Revenue)

Central Board of Excise & Customs, New Delhi

Subject: Passing of order under Section 110 of the Customs

Act, 1962 – reg.

Attention is invited to Section 110 of the Customs Act, 1962

and Para 1.1 of Chapter 15 of the Customs Manual 2015.

2. It has been brought to the notice of the Board that in

several cases, goods arc being held-up/seized by the field

formations only under panchnama and separate orders for

seizure of goods are not being passed. The Hon’ble Delhi High

Court, in a recent order, has held that a panchnama is a

statement by panchas (witnesses) and cannot be taken to be

an order passed by the proper officer under Section 110 of the

Customs Act, 1962.

3. Though Section 110 of the Act ibid does not specify passing

an order for seizure of goods, it says that where it is not

practicable to seize any such goods, the proper officer may

serve on the owner of the goods an order that he shall not

remove, part with, or otherwise deal with the goods except

with the previous permission of such officer.

4. In view of the above, in all future cases, the following may

be adhered to:

Whenever goods are being seized, in addition to

panchnama, the proper officer must also pass an

appropriate order (seizure memo/order/etc.) clearly

mentioning the reasons to believe that the goods are

liable for confiscation.

Where it is not practicable to seize any such goods, the

proper officer may serve on the owner of the goods an

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C/SCA/6295/2025(GJHC240287022025) CAV JUDGMENT DATED: 25/08/2026

order that he shall nor remove, part with, or otherwise

deal with the goods except with the previous permission

of such officer. In such cases, investigations should be

fast-tracked to expeditiously decide whether to place

the goods under seizure or to release the same to their

owner.

5. Further, it has been brought to the notice of the Board that

in cases where provisional release of seized goods is allowed

under Section 110A of the Act ibid, show cause notices are not

being issued within the stipulated time period on the ground

that the goods have been released to the owner of the goods.

The provisions of the Customs Act, 1962 are clear that

irrespective of the fact whether goods remain seized or are

provisionally released, once goods are seized, the time period

(including extended time period) stipulated under Section

110(2) of the Act shall remain applicable and has to be strictly

adhered to.

6. The Chief Commissioners/Director Generals are requested

to circulate the present guidelines to all the formations under

their charge. Difficulties, if any, in implementation of the

aforesaid guidelines may be brought to the notice of the

Board. Hindi version follows.”

25.The Ministry of Finance, in the context of passing an

order under Section 110 of the Act, has taken cognizance of

those cases where the goods are being held up or seized under

the Panchnama and no separate orders for seizure of goods

are passed by the authority.

26.The guidelines issued by the Ministry of Finance

specifically direct that whenever goods are being seized, in

addition to the Panchnama, the proper officer must also pass

an appropriate order (seizure memo/order/etc.) clearly

mentioning the reasons to believe that the goods are liable for

confiscation.

27.The expression used in the guidelines, that “the proper

officer must also pass an appropriate order in addition to

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C/SCA/6295/2025(GJHC240287022025) CAV JUDGMENT DATED: 25/08/2026

Panchnama”, has to be construed to mean that such orders of

seizure should be coterminous and are required to be passed

along with or after the Panchnama is prepared, clearly

mentioning the reasons to believe that the goods are liable for

confiscation.

28. Thus, the respondents have detained the car vide

panchanama 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 customs authority

cannot indefinitely seize the goods in the garb of detention,

without passing any order under the provisos to Section 110(1)

of the Act. In absence of any order, when there is actual

detention of goods, the time will start running from detention

of goods vide panchanama dated 07.02.2025, more

particularly, when the DRI has issued summons to the

petitioner on 14.02.2025 and 03.03.2025 under Section 108 of

the Act directing him to remain present. Section 110(1) of the

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…, he may give custody of the

goods 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, a) he/she must explicitly record reasons that the goods

are liable for confiscation, and b) he must record clear

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C/SCA/6295/2025(GJHC240287022025) CAV JUDGMENT DATED: 25/08/2026

satisfaction by passing the order regarding the nature of the

goods under the respective provisos, which strictly restricts,

the removal, transport, storage, or physical possession and the

physical seizure. The panchanama cannot satisfy the

ingredients of the Section 110 of the Act, and an order is

mandatory under the proviso to Section 110 of the Act for

paving the way for issuance of notice under Section 124(a)

within a period of 6 months unless extended.

29.As a necessary corollary, the proper officer or the DRI

officers cannot consume a considerable period, such as, in the

present case, over a period of one year, to pass the seizure

order under Section 110(1) after the Panchnama was prepared

on 07.02.2025, by continuing the detention of the vehicle. The

consequential effect is that, when the seizure memo travels

beyond the period of one year, the time limit of six months as

mentioned in the provisions of Section 110(2) and the further

period of six months as envisaged under the proviso to sub-

section (2) of Section 110[6] will get consumed, and the DRI

thereafter cannot be allowed to reap the fruits of its inaction.

Thus, after consuming a considerable period of more than one

year, the proper officer has passed an order under Section

110(1) and thereafter has issued the show-cause notice under

Section 124(a) of the Act. The respondents have sprung into

action by passing the order and show-cause notice only after

the order dated 10.04.2026 passed by the Supreme Court. We

have already deprecated the stance of the Respondents, who

have sought to use the pendency of the present writ petition

as a shield to justify their persistent inaction in failing to pass

appropriate orders.

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C/SCA/6295/2025(GJHC240287022025) CAV JUDGMENT DATED: 25/08/2026

30.As held above, the order of provisional release dated

18.05.2026 is also illegal, as the conditions mentioned in the

said order 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 in the decision rendered in the case of

Shanus Impex (supra).

31. On an overall analysis of the facts and the scheme of the

statutory provisions, we direct the respondents to release the

Toyota Land Cruiser, shipped against the Sea Waybill/Bill of

Lading dated 23.12.2024 and covered by Bill of Entry bearing

No.7472252 dated 26.12.2024. The directions shall be

complied with within a period of two weeks. We also impose

costs of Rs.10,000/- on the Respondents, which shall be

deposited with the Registry of this Court within a period of two

weeks.

Sd/-

(A. S. SUPEHIA, J)

Sd/-

(VAIBHAVI D. NANAVATI,J)

MAHESH/Supp.Board/01

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