Customs Act | Gujarat High Court Directs Release Of Seized Imported Fuel Oil, Says Samples Were Collected In Owner's Absence
LIVELAW NEWS NETWORK
20 Dec 2025 1:50 PM IST
The Gujarat High Court recently directed the release of imported Distillate Fuel Oil seized by the Directorate of Revenue Intelligence, observing that the samples that were collected and sent for testing of parameters was neither collected in the presence of the proper officer or of the owner/importer of the goods.
The petitioner's goods–i.e., imported Distillate Fuel Oil was seized by the Directorate of Revenue Intelligence through a Seizure Memo. The process of seizure of sample was carried out by the Customs authority at Hazira on 30.09.2025, which was sent for chemical examination to the Central Excise and Customs Laboratory at Vadodara. The report dated 23.10.2025 stated that the Distillate Fuel Oil meets the requirements.
However, it appears that thereafter the DRI Jamnagar, collected the sample from the very same cargo on 08.10.2025 and sent it to Visakhapatnam Laboratory.
The DRI, Jamnagar, opined that the sample does not comply with IS:16731 in respect of the cloud point and water content, and further deliberate efforts were made to lower the flash point and elevate the recovery temperature for 95% beyond 370°so that the product does not meet the requirements of High Flash High Speed Diesel (HFHSD) .
The petitioner contended that the sample was collected in the absence of the owner violating Section 144 of the Customs Act. The court had earlier directed the Intelligence Officer to file a fresh affidavit pointing out the names of the officers who had collected the samples and had sent them to the Vadodara Laboratory.
A division bench of Justice AS Supehia and Justice Pranav Trivedi referred to the investigation report in the matter and said:
"On perusal of the investigation report, we find that the concerned officers have shrugged from their responsibilities in collecting the samples and have denied having collected the samples. One of the officer has named another officer; however, neither of the officers have admitted having collected the samples and sent them to the Vadodara Laboratory. Be that as it may, we are not at this stage further commenting on the preliminary investigation report, as the investigation is in progress. Further, we find that while collecting the samples, the Customs authority at Hazira had forwarded the same to the Vadodara Laboratory, which ultimately was found in favour of the petitioner, being violative of the provisions of Section 144 of the Act".
The court referred to affidavit that the Customs Officials working at Hazira Customs Office, who had drawn the sample and sent it to the laboratory in Vadodara, had not drawn it in the presence of the proper officer and thus the sample cannot be considered as an authentic sample especially in the context of the intelligence gathered by the DRI.
"The provision of Section 144 of the Act mandates that the proper officer may, at the entry or clearance of the goods or at any time, while such goods are passing through the customs area, take samples of such goods “in the presence of the owner thereof” for examination or testing or for ascertaining the value thereof or for any other purpose. Thus, the provision of Section 144 of the Act mandates that the proper officer has to draw the samples in the presence of the owner, which in fact was not done, while collecting the samples on both occasions, initially by the Customs Officer at Hazira and subsequently by DRI, Jamnagar," the bench said.
On a specific query raised by the court, the counsel appearing for the respondent authorities on whether there is any other provision or any administrative instruction which enables the Customs Officers to draw the samples in the absence of the importer, the court noted that the counsel was unable to satisfy the Court.
"Moreover, it is not in dispute that the affidavit mentions the name of the Director, Shri Chirag Arvind Khandor, Director of petitioner- M/s.Arihant Agro Distillation and Liquid Terminals, Mumbai, of the petitioner-Company, who is the importer. No attempts were made to gather details of any other Director, if any, in whose presence the samples could have been taken," the court said.
It observed that it was always open to the DRI officers to collect the samples in the presence of the owner and send them to the Visakhapatnam Laboratory.
It said that the respondent-Department has not considered the samples collected by the Customs Officer at Hazira, which were drawn in the absence of the proper officer, as authentic samples.
It noted that simultaneously, the samples collected by the DRI Jamnagar, on 08.10.2025 in the absence of the owner were considered authentic, as they were drawn in the presence of panch witnesses.
"No such procedure of drawing samples is prescribed under the Act. Thus, the respondents cannot approbate and reprobate by declaring the sample collected by the Customs Officer, Hazira, on 30.09.2025 as unauthentic, while treating the sample collected on 08.10.2025 by DRI, Jamnagar, in the absence of the owner as authentic. Thus, both samples collected by the Customs Officer, Hazira, and DRI, Jamnagar, on 30.09.2025 and 08.10.2025 respectively, fail the mandate of Section 144 of the Act, as they were collected in the absence of the owner," the bench held.
Holding that the initial sample was collected de hors the provision of Section 144 of the Act, it cannot be relied upon, and the subsequent Test Report issued by the Visakhapatnam Laboratory cannot be invoked for seizing the goods of the petitioner, as it will have no consequence, since at the first instance the samples collected were against the statutory provision of Section 144 of the Act.
The court thus allowed the plea and directed the release of the goods.
"We further clarify that the investigation may proceed and an appropriate report fixing the accountability of the erring officers shall be prepared, and necessary action, if required, under the relevant provisions or any Rules or Regulations or administrative instructions, shall be taken against them," it added.
Case title: M/S ARIHANT AGRO DISTILLATION AND LIQUID TERMINALS LIMITED v/s UNION OF INDIA & ORS
R/SPECIAL CIVIL APPLICATION NO. 15106 of 2025