In CWP-13936-2023 -P&H HC- Punjab and Haryana High Court holds that goods cleared for home consumption are no longer considered as imported goods & cannot be confiscated
Justice Ritu Bahri & Justice Alok Jain [11-09-2023]

Read Order: K.B. Tyres through its Karta Vijay Kumar Baweja v. Deputy Director, Directorate of Revenue Intelligence, Ludhiana and ors.

Chahat Varma

New Delhi, October 5, 2023: The Punjab and Haryana High Court has granted significant relief to K.B. Tyres (petitioner) by quashing the seizure of goods they had purchased from an importer for home consumption. The court's ruling established that once goods are cleared for home consumption, they no longer maintain their status as imported goods and, as a result, cannot be subject to confiscation.

In this petition, the petitioner has contested the actions and behaviour of the authorities regarding the seizure of goods purchased by the petitioner from an importer, M/s Vinayak Creations. The petitioner argued that the seized goods did not fall within the classification of ‘banned goods’

The division bench comprising of Justice Ritu Bahri and Justice Alok Jain referred to Section 2(25) of the Customs Act and made the observation that the term ‘imported goods’ undergoes a change in nature once they are cleared for home consumption. In the present case, it was admitted that the goods had been correctly cleared in favour of the importer and were subsequently sold to the petitioner for home consumption. Consequently, the authorities did not have the legal authority to seize or confiscate these goods.

The bench additionally observed that the authorities had not issued any notice to the petitioner before taking such action, which amounted to a violation of the principles of natural justice. This situation did not involve the petitioner dealing with illegal or banned goods that warranted confiscation. The authorities were always cognizant of the identity of the importer of these goods and the subsequent sale of the goods by the petitioner.

The bench remarked that in cases where goods are not banned or in violation of any other law, business transactions should not be ruined at the whims and fancies of the authorities.

Accordingly, the court quashed the seizure memo and directed the authorities to promptly release the goods.