2011 (1) TMI 396 - HC - Customs

Confiscation of goods - Redemption fine and duty - silver ingots - Under Section 110(1A) of the Customs Act, 1962 the notified goods seized by the department can be disposed of by the department immediately after the seizure and the silver bars are the notified commodity u/S 110(1A) of the Act - Having regard to the constraint involved in storage of high valued goods and considering the liquidity to exchequer, the silver ingots were disposed of - The order of this Court for release of the impugned goods on redemption fine was subject to availability of the goods. Since the imported goods are not available with the Department, the question of exercising the option as directed by this Court will not arise - Hence the department is not in a position to release the sale proceeds since the CEGOT had upheld the final order passed by the Department and the Tribunal s order was not set aside - It was pointed out that this Court while passing order relied upon the judgment of Kolkatta Tribunal in the case of Hiralal Bhagat v. Commissioner of Customs - Tribunal held since the seized goods were not available and due to liberalization such goods are not barred from being brought in, permission was granted to the aggrieved party to redeem the same on payment of redemption fine and duty - Therefore, the prayer made by the petitioner cannot be countenanced by this Court - Hence, the writ petition stands dismissed - No costs.

Summary

Issues:
1. Challenge to the order of release of sale proceeds.
2. Confiscation of silver ingots under Customs Act.
3. Appeal to Customs, Excise and Gold (Control) Appellate Tribunal.
4. Disposal of seized silver bars.
5. Redemption of seized goods or disbursement of sale proceeds.
6. Interpretation of Court orders regarding redemption fine.
7. Dispute over availability of seized goods for redemption.
8. Legal obligation to disburse sale proceeds or market value of goods.

Analysis:
1. The petitioner challenged an order refusing release of sale proceeds from the confiscation of silver ingots by the Customs Preventive Unit. The search in 1993 led to seizure, a show cause notice, and subsequent confiscation under the Customs Act. An appeal to the Tribunal resulted in a reduced penalty but upheld confiscation.

2. The Customs Commissioner's Order-in-Original in 1994 invoked Sections 111(d) of the Customs Act for absolute confiscation and imposed a penalty. The Tribunal confirmed the confiscation but reduced the penalty, leading to the petitioner's appeal for redemption or sale proceeds.

3. The Tribunal directed deposit before confirming the confiscation, which was later upheld with a penalty reduction. Subsequent disposal of the seized silver bars in 1998 raised questions regarding redemption or sale proceeds, prompting the petitioner to challenge the decision.

4. The petitioner contended that the disposal without notice during the pending writ petition violated the Customs Act. Citing previous judgments, the petitioner sought redemption or sale proceeds based on the availability of the seized goods, emphasizing the liberalization policy on importation of silver and gold.

5. The counter affidavit argued against releasing the sale proceeds, citing the Tribunal's confirmation of the confiscation and the absence of the seized goods for redemption. The petitioner relied on Supreme Court precedents for the option of redemption fine, demanding disbursement of sale proceeds or market value.

6. The Court analyzed the previous orders and the absence of the seized goods, concluding that the petitioner's claim could not be accepted due to the Tribunal's decision and the Court's direction contingent on goods' availability. The writ petition was dismissed without costs, aligning with the legal precedents cited.

This comprehensive analysis covers the legal journey of the case, focusing on the challenges, decisions, and interpretations related to the confiscation of silver ingots and the subsequent requests for redemption or sale proceeds.