2010 (2) TMI 670 - HC - Customs

Confiscation - Search and seizure - this Court seldom entertains a writ petition in a situation where the petitioner has the statutory right of appeal to this court, howsoever narrow or circumcised the scope of such appeal is - this is a submission which perhaps merits acceptance as it is the appellant who is foregoing a right which is otherwise available and so far as the present writ petition is concerned. Goods are still available is a redeeming feature for the respondent to claim back goods even at this point of time as at our instance the Department has produced the goods to convince us that it was still available for redemption - If the assessee had failed in making good the bill of entry with reference to the goods that had been seized and ordered to be confiscated the mere fact cannot absolve the assessee of its failure in not making the claim that it was licitly imported

Issues Involved:

1. Maintainability of the writ petition under Articles 226 and 227 of the Constitution of India.
2. Legality of the Tribunal's order reversing the adjudication and appellate orders.
3. Validity of the importation of goods and the supporting documentation.
4. Justification for confiscation and penalties imposed by the customs authorities.
5. Tribunal's adherence to legal standards in its decision-making process.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petition:

The writ petition was filed by the revenue under Articles 226 and 227 of the Constitution of India against the order of the Customs, Excise, and Gold (Control) Appellate Tribunal. The respondent's counsel raised preliminary objections regarding the maintainability of the writ petition, arguing that the Commissioner of Customs should have invoked the provisions of Section 130 of the Customs Act to appeal. However, the court noted that the High Court has the discretion to entertain writ petitions even when a statutory remedy is available. The court emphasized that the writ jurisdiction is extraordinary and discretionary, confined to judicial review of administrative actions or quasi-judicial orders by Tribunals. The court rejected the preliminary objection and decided to examine the writ petition on merits under Article 227.

2. Legality of the Tribunal's Order:

The Tribunal's order dated 11-12-2002 reversed the findings of the adjudicating and appellate authorities, holding that there was no duty liability or penalty on the assessee. The Tribunal relied on the fact that silk yarn is not notified under Section 123 of the Customs Act, and mere failure to show legal acquisition does not prove the department's case for confiscation and penalty. The court found that the Tribunal's order lacked reasoning and did not address the findings of the adjudicating and appellate authorities. The Tribunal's decision was deemed a non-speaking order, making it unsustainable in law.

3. Validity of the Importation of Goods:

The assessee claimed that the nine bales of mulberry raw silk and three bales of dupion silk yarn were valid imports from China, supported by material indicating a valid import. However, the customs authorities seized the goods on the premise of illicit importation. The adjudicating authority and the first appellate authority found that the assessee failed to produce supporting documents to substantiate the claim of licit importation. The court noted that the assessee did not place any supporting documents before any authorities, and the Tribunal did not refer to any material in its decision.

4. Justification for Confiscation and Penalties:

The adjudicating authority ordered the confiscation of the goods and imposed a personal penalty of Rs. 2.00 lakh on the importer. The appellate authority affirmed the confiscation but allowed the restoration of goods on payment of redemption fine and reduced the personal penalty to Rs. 1.00 lakh. The Tribunal, however, set aside the confiscation and penalties without assigning reasons. The court held that the Tribunal's order was unjustified as it did not provide any rationale for reversing the findings of the lower authorities. The court restored the order of the first appellate authority, allowing redemption on payment of fine.

5. Tribunal's Adherence to Legal Standards:

The court found that the Tribunal's order lacked reasoning and did not adhere to legal standards. The Tribunal's reference to Section 123 of the Customs Act and related case law was deemed irrelevant to the present case. The court emphasized that the assessee's failure to produce supporting documents indicated that the goods were not licitly imported. The Tribunal's decision was found to be a non-speaking order, failing to meet the standards of judicial review.

Conclusion:

The court allowed the writ petition, set aside the order of the Tribunal, and restored the order of the first appellate authority. The assessee was directed to bear the costs, and the confiscated goods were permitted to be redeemed on payment of the redemption fine as indicated by the appellate authority. The court emphasized the importance of providing reasons in judicial decisions and ensuring adherence to legal standards in the decision-making process.

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