2007 (9) TMI 77 - HC - Customs

Claim for excess amount from sale proceeds - Sale of warehoused goods in auction after informing the assessee properly - Balance amount should be refund along with interest @ 9% - If the quantum is in dispute, person should file civil suit

Summary

Issues:
1. Compliance with Section 48 of the Customs Act, 1962 regarding auction of goods.
2. Validity of the auction conducted without prior intimation to the importer.
3. Claim for compensation and interest by the writ petitioner.
4. Dispute over the address change notification and notice delivery.

Compliance with Section 48 of the Customs Act:
The case involved the import of goods, including Glass Shells and PCB components, from China. The Customs Department refused clearance for the Glass Shells, suspecting them to be Compact Fluorescent Lamps. The Warehousing Corporation auctioned the goods without proper notice to the importer. The court analyzed Section 48 of the Customs Act, which mandates giving notice to the importer before auctioning goods. The court found that the Corporation had issued a notice, returned due to an incorrect address provided by the importer. As per the General Clauses Act, the court held that the Corporation had fulfilled the legal requirements under Section 48.

Validity of the Auction Without Prior Intimation:
The learned single Judge ruled in favor of the writ petitioner, stating that the auction was conducted without prior intimation, violating Section 48 of the Customs Act. The Judge emphasized the importance of proof of service of notice, which the respondents failed to provide. The Judge allowed the writ petition, highlighting the non-compliance with procedural requirements.

Claim for Compensation and Interest:
The writ petitioner sought compensation and interest under Section 48 of the Customs Act, alleging non-compliance by the respondents. The Warehousing Corporation argued that the claim was not maintainable as it was a money claim, suggesting that a civil suit should be filed for recovery. However, the court found that a balance amount was indeed payable to the petitioner, as confirmed by the Corporation's counter affidavit. The court directed the respondents to refund the amount and awarded 9% interest per annum from the date of the auction.

Dispute Over Address Change Notification and Notice Delivery:
A significant issue arose regarding the notice sent to the importer by the Warehousing Corporation. The notice was returned due to a change of address, which the importer failed to communicate to the respondents. The court held that the fault lay with the importer for not updating the address, leading to the presumption of proper notice delivery under the General Clauses Act. The court concluded that the respondents had complied with the legal procedures under Section 48 of the Customs Act.

In conclusion, the High Court allowed both writ appeals, setting aside the single Judge's order and directing the refund of the balance amount to the writ petitioner with interest. The court emphasized the importance of complying with legal procedures and addressing issues of notice delivery and communication effectively.