2014 (12) TMI 358 - HC - Customs

Confiscation of goods - Procedure in case of goods not cleared, warehoused, or transhipped within thirty days after unloading- Whether the first respondent is right in relying on Section 48 of the Customs Act, 1962 when the said Section has no application at all to the facts of the case - Held that - On facts, the original authority found that there was no relinquishment of goods by the original buyer and there could have been no such relinquishment, more so, when the Customs authorities have already seized the goods for violation of conditions of advance licence. The claim made by the appellant was after long lapse of time, by then the property was vested with the Government. Appellant pointed out that the Tribunal in Paragraph No. 7 of the Order has referred to Section 48 of the Act and the said provision has absolutely no relevance. In our view, the misreading of the observations made by the Tribunal has led to such a ground being raised by the appellant. The Tribunal has referred to Section 48 of the Act to state that it contemplates clearance on import of goods within thirty days from its landing and this applies to the person who filed the bill of entry on 8-9-2003 viz., Sandip Exports Limited. Therefore, the Tribunal has not committed any error in referring to Section 48 of the Act while taking note of the conduct of M/s. Sandip Exports Limited. So far as the claim made by the appellant the Tribunal noted that the appellant made its claim in December 2003 only after the offence was detected by the Customs Authorities and the goods were seized. That apart, the Tribunal also set aside the penalty imposed on M/s. Sandip Exports Limited and therefore rightly pointed out that there would be loss of public revenue if the appellant is allowed to clear the impugned goods on payment of normal duty and only on normal redemption fine of ₹ 2,00,000/- as ordered by the Tribunal earlier which was set aside by this Court in 2009 (11) TMI 70 - MADRAS HIGH COURT - Decided against assessee.

Summary

Issues: Ownership of goods, Application of Section 48 of the Customs Act, 1962, Impleading of original importer

Ownership of goods:
The case involved a dispute over the ownership of imported goods and the entitlement to claim ownership. The appellant sought to claim ownership based on documents obtained from the overseas supplier. However, the original importer, Sandip Exports Limited, was not made a party in the initial proceedings. The Division Bench emphasized the importance of determining the rights of the original importer and the appellant's claim to subrogate itself to the original importer's rights. The court held that the appellant's claim lacked bona fide as it came into the picture after authorities detected fraudulent attempts to clear goods without duty payment. The court affirmed the Tribunal's decision confirming the confiscation order, noting that the property had vested with the Government due to the lapse of time and the seizure by Customs authorities.

Application of Section 48 of the Customs Act, 1962:
The Tribunal's reference to Section 48 of the Customs Act was challenged by the appellant, claiming it was irrelevant. However, the court upheld the Tribunal's interpretation, stating that Section 48 pertains to clearance of imported goods within thirty days from landing, which was relevant to the conduct of Sandip Exports Limited, the original importer. The court clarified that the Tribunal did not err in considering Section 48 in relation to the conduct of the importer.

Impleading of original importer:
The Division Bench highlighted the improper non-impleading of the original importer, Sandip Exports Limited, as a party in the initial proceedings. It emphasized the necessity of making the original importer a party to address substantial issues such as ownership of goods, release of goods, duty levy, redemption fine, and penalties. The court noted that the original importer's default prompted the appellant to claim ownership, underscoring the importance of including Sandip Exports Limited in the proceedings. The court criticized the lack of coordination among Department officers in communicating with the appellant and emphasized the need for proper representation and consideration of all relevant parties in legal proceedings.

In conclusion, the court dismissed the appeal, ruling against the appellant on the questions of law raised. The court found no grounds to interfere with the Tribunal's decision and affirmed the confiscation order and penalties imposed. The judgment emphasized the importance of procedural fairness, proper representation of parties, and adherence to legal provisions in customs matters, ultimately upholding the original confiscation order and denying the appellant's claim to ownership of the goods.