2008 (5) TMI 440 - HC - Customs

Confiscated goods - Sale of goods without giving notice to pettioner - imported goods of the petitioner were seized - The order passed by the Tribunal of release the goods - The customs authorities in its affidavit have stated that due to mistake, the goods have been sold - The explanation in the affidavit is as there was delay on part of the petitioner in preferring appeal, as the Deputy Commissioner of Customs Division, was not a party in the appeal and as there was communication gap in between the respondents the goods were sold - Customs authorities have sold the goods without going in for public auction and without giving notice to the owner of the goods - Hence, sale is in total disregard of the provisions contained in Section 150 of the Act - It is also in utter disregard to the Circular No. 711/4/2006-Cus. (AS) dated 14-Feb-2006 the authorities are to be remined that law interpreted and laid down is for strict compliance and circulars issued by the authorities themselves are for adherence in letter and spirit. Therefore, the impugned action of the Revenue in selling the goods cannot be sustained - The Revenue directed to pay a sum of Rs. 9,19,625/- to the petitioner along with interest at the rate of Rs. 9% per annum to be calculated from the date of the order passed by the Tribunal till the date of actual payment. Therefore, the impugned action of the respondents in selling the goods cannot be sustained -

Issues:
1. Petitioner seeking payment for seized goods.
2. Discrepancy in valuation of seized goods.
3. Legal proceedings leading to the appeal.
4. Non-compliance with the Tribunal's order for release of goods.
5. Legality of selling confiscated goods without proper procedure.
6. Interpretation of Section 150 of the Customs Act, 1962.

Analysis:
1. The petitioner, a company, filed a writ petition seeking payment of Rs. 9,19,625, the seizure value of goods, as directed by the Customs, Excise and Service Tax Appellate Tribunal. The goods were seized in December 2003, valued at Rs. 9,19,625, despite the petitioner claiming a higher value. Legal proceedings ensued, leading to the Tribunal's order in favor of the petitioner.

2. The valuation discrepancy of the seized goods was highlighted, with the customs authorities initially valuing them at Rs. 9,35,765. Subsequent legal actions resulted in the goods being valued at Rs. 9,19,625. Various adjudications and appeals were made, culminating in the Tribunal's decision overturning the previous orders.

3. Despite the Tribunal's order to release the goods, the customs authorities failed to comply. The petitioner, aggrieved by the non-compliance, filed a writ petition. During the hearing, it was revealed that the goods had been mistakenly sold in 2004 due to alleged delays and communication gaps.

4. The crucial issue revolved around the legality of selling confiscated goods without following the prescribed procedure. Section 150 of the Customs Act, 1962, mandates specific procedures for the sale of goods, including giving notice to the owner before sale. The court noted that the authorities sold the goods without adhering to the statutory requirements, contrary to established legal principles and past court judgments.

5. The court emphasized that the sale of goods without notifying the owner or conducting a public auction was a clear violation of the law. Citing previous cases deprecating such practices, the court held that the actions of the customs authorities were in disregard of legal provisions and circulars. The court reiterated the importance of strict compliance with the law and issued a directive to pay the petitioner the seized amount with interest.

6. In conclusion, the court allowed the writ petition, directing the respondents to pay the petitioner the specified amount with interest within a stipulated timeframe. The court also awarded costs to the petitioner, emphasizing the necessity of adhering to legal procedures and circulars in such matters.

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