2005 (7) TMI 655 - HC - Customs

Summary

Issues:
1. Liability of auction purchasers for payments demanded by the Development Commissioner of Customs.
2. Nature of dues claimed by the Development Commissioner.
3. Applicability of duties of customs on goods removed from a special economic zone.

Analysis:
1. The judgment revolves around the issue of the liability of auction purchasers for payments demanded by the Development Commissioner of Customs. The auction purchasers contended that they are not liable for payments demanded, as the liabilities belonged to the company in liquidation. The court examined the liabilities claimed and held that certain dues, such as lease rentals and central excise duty, were the responsibility of the company in liquidation. The court cited precedents to support the position that such liabilities cannot be imposed on auction purchasers in liquidation proceedings.

2. The Development Commissioner claimed various dues from the auction purchasers, including lease rent dues, central excise duty, customs duty, and labor dues. The total amount claimed was Rs. 94,95,001. The court analyzed each type of dues individually. Regarding lease rentals, it was established that the company in liquidation had defaulted on payments, absolving the auction purchasers of this liability. Similarly, the court ruled that central excise duty and labor dues were the responsibility of the company in liquidation and not the auction purchasers.

3. The court delved into the issue of customs duty on goods removed from a special economic zone. The Development Commissioner argued that such duties were applicable as the auction purchasers were removing machinery from the special economic zone. Citing relevant provisions of the Customs Act, the court held that the auction purchasers were indeed liable to pay customs duty. The court referred to a previous judgment to support the position that auction purchasers are responsible for customs duties in such scenarios. However, the court left open the question of the correctness of the duty imposed, allowing the auction purchasers to challenge the calculation in appropriate proceedings.

In conclusion, the court disposed of the applications, directing the auction purchasers to appear before the Development Commissioner for further proceedings. The judgment clarified the liabilities of the auction purchasers in relation to the dues claimed by the Development Commissioner, emphasizing the distinction between the responsibilities of the company in liquidation and the auction purchasers.