2014 (12) TMI 1278 - HC - Customs

Forfeiture of security deposit - the case of petitioner is that the petitioner was being saddled with consequence of forfeiting part of its security amount on account of not lifting the auction lot within the prescribed period even when the similar facilities in past were given to many of the auction purchasers by the Customs Department - Held that - the Customs Department must maintain a uniform yardstick. Actually, here the petitioner has been saddled, with an adverse consequence of forfeiture of ₹ 2,65,000/- only because he could not deposit the auction amount within a period of 15 days but in the similar cases in past, about which full details has been given by the petitioner in the supplementary affidavit, they were allowed to lift the auctioned lot even after expiry of the period fixed for depositing the full amount of auction - the interest of revenue cannot be bigger than the principle of observance of the rules but then in commercial law even the Government is supposed to take the interest of revenue into prime consideration - the petitioner will be entitled to lift the entire lot on complete payment of ₹ 11,74,920/- - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Relief sought to quash re-auction of Lot No. 26 and 29.
2. Forfeiture of security amount by petitioner.
3. Justification of Customs Department's action.
4. Uniformity in Customs Department's procedures.
5. Discrepancy in treatment of auction purchasers.
6. Impact of re-auction on revenue and principles of commercial law.
7. Decision on releasing auction lot to petitioner.

Analysis:
1. The petitioner sought relief to quash the re-auction of Lot No. 26 and 29, emphasizing the disparity in treatment compared to past auction purchasers.
2. The petitioner faced forfeiture of &8377; 2,65,000 due to failure to deposit the auction amount within the stipulated period, highlighting similar leniency shown to other purchasers in the past.
3. The Customs Department justified its actions based on auction terms and conditions, leading to a legal dispute.
4. The court stressed the importance of maintaining a uniform yardstick in Customs Department's dealings to avoid arbitrary decisions and ensure fairness.
5. Discrepancies in past practices of allowing late payments for auctioned lots were noted, with the court acknowledging the lack of clear answers from the Customs Department on such instances.
6. The judgment considered the impact of re-auction on revenue and commercial law principles, balancing the interests of revenue with adherence to rules and fairness in transactions.
7. Ultimately, the court directed the release of the auction lot to the petitioner at the earlier offer price of &8377; 10,42,420, along with 50% of the forfeited amount, totaling &8377; 11,74,920, benefiting both the petitioner and the Customs Department financially.

Conclusion:
The judgment addressed the issues raised by the petitioner regarding the re-auction and forfeiture of security amount, emphasizing the need for consistency and fairness in Customs Department's procedures. By balancing the interests of revenue and principles of justice, the court resolved the dispute by allowing the petitioner to acquire the auction lot at a specified price, benefiting both parties involved.