2006 (11) TMI 100 - HC - Central Excise

Seizure of goods Petitioner contended that respondent has not taken any procedural steps required for dealing with seized goods which is of perishable nature and required to adjust the amount with duty payment Matter decided by adjudicating authority after receipt of order of confiscation

Summary

Issues:
Petition seeking payment for perished goods seized under Central Excise Act and Customs Act. Failure to auction perishable goods. Responsibility for loss of value of goods. Compliance with statutory duty by authorities. Finalization of adjudication proceedings.

Analysis:
1. The petition requested payment for the value of goods seized by the respondents under the Central Excise Act and Customs Act, which the petitioner claimed had perished due to the authorities' failure to discharge their statutory duty diligently.
2. Goods worth Rs. 50.55 lacs were seized from the petitioner's godowns on the allegation of clandestine removal without excise duty payment. The manufacturer later deposited the duty involved. The seized goods were considered perishable under Section 110(1A) of the Customs Act.
3. The petitioner contended that the seized goods fell under the category of perishable goods as per the statutory notification and should have been disposed of without delay. The goods, identified as snuff, were classified as tobacco products under the relevant notification.
4. Despite requests for release or auction of the goods, the authorities failed to take necessary actions, leading to the loss of value. The petitioner argued for payment equivalent to the goods' value due to the authorities' failure to follow statutory procedures.
5. Legal precedents were cited to support the petitioner's claim, emphasizing the authorities' responsibility to auction or dispose of seized goods promptly to prevent loss to the rightful owner.
6. The court noted the authorities' failure to deal with the perishable goods as required by law and held them liable for not diligently discharging their statutory duty. However, the court deferred the decision on payment until the adjudication process determining the goods' confiscation was completed.
7. The court partially allowed the petition, directing the adjudicating authority to finalize the matter within six months and determine the extent of loss in the value of goods. The petitioner would be entitled to payment or adjustment based on this determination.
8. The respondents were also directed to identify and take action against individuals responsible for causing avoidable loss to the State, ensuring accountability for any negligence or misconduct in handling the seized goods.

This judgment highlights the importance of authorities following statutory procedures in dealing with seized goods, especially perishable items, to prevent loss to the rightful owner and ensure accountability for any avoidable loss caused by negligence or non-compliance with the law.