Court Rules Currency Seized as "Things" Not Subject to Six-Month Limitation Under Customs Act
In a significant ruling, the Madras High Court has overturned a single judge's order mandating the return of seized currency in a case involving alleged Hawala transactions and illegal gratification. The Division Bench, comprising Dr. G. Jayachandran and Justice N. Mala, clarified the application of the Customs Act, 1962, differentiating between "goods" and "things" under Sections 110(1) and 110(3).
The case arose from an appeal by the Principal Commissioner of Customs challenging a previous order that required the return of Rs. 21,55,000 seized during an investigation into fraudulent claims under the Directorate General of Foreign Trade's Amnesty Scheme. The currency was initially ordered to be returned on the grounds that no show cause notice was issued within six months, as required for "goods" under Section 110(2).
However, the appellate court emphasized that the seized currency, linked to serious economic offences, falls under "things" in Section 110(3), which does not prescribe a time limit for retention. The court underscored that premature release could compromise ongoing investigations involving other laws, including the Prevention of Money Laundering Act and the Income Tax Act.
The bench further noted that the seizure was part of a broader probe into organized Hawala transactions, involving multiple parties and public officials. The court directed that the seized currency be deposited in an interest-earning scheme until the investigation's completion.
This ruling reaffirms the Customs Department's authority to retain seized items critical to investigations, without being bound by the six-month limitation applicable to "goods."
Bottom Line :
Customs Act, 1962 - Seizure of Indian currency - Distinction between "goods" and "things" under Sections 110(1) and 110(3) - Currency seized during investigation into Hawala transactions and illegal gratification falls under "things" and not "goods" - No time limit prescribed for retention of "things" under Section 110(3).
Statutory provision(s): Customs Act, 1962 - Sections 110(1), 110(2), 110(3)
Principal Commissioner of Customs v. Vikram Jain, (Madras)(DB) : Law Finder Doc id # 2962001
