2007 (10) TMI 695 - HC - Customs

Summary

Issues Involved:
1. Confiscation of seized goods and truck u/s 111 and 115 of the Customs Act, 1962.
2. Right to redeem seized goods u/s 125 of the Customs Act.
3. Legality of auction sale of confiscated goods.
4. Maintainability of writ application post-auction sale.

Summary:

1. Confiscation of Seized Goods and Truck u/s 111 and 115 of the Customs Act, 1962:
The appellant-writ petitioner challenged the order dated 30.4.2007 dismissing his writ application for the release of seized goods. The Customs Department had apprehended a truck with battery powder suspected to be Zinc Oxide/Zinc Sulphate on 12.6.2001. The Joint Commissioner, Customs, Patna, after a preliminary enquiry, initiated proceedings and passed a final order on 15.7.2003 u/s 122 of the Customs Act, directing confiscation of the goods u/s 111(b). The appellant's subsequent appeals were dismissed by the appellate authority and the Tribunal.

2. Right to Redeem Seized Goods u/s 125 of the Customs Act:
The appellant-writ petitioner argued that he sought to implement the order dated 15.7.2003, which allowed him to redeem the seized goods on payment of a redemption fine of Rs. 75,000/- u/s 125 of the Customs Act. However, the Customs Department countered that the appellant failed to exercise this option within the prescribed one-month period, and thus, the goods were auctioned and delivered to the auction purchaser on 4.8.2005.

3. Legality of Auction Sale of Confiscated Goods:
The appellant contended that the Customs authorities should have awaited the outcome of his application before the Tribunal before auctioning the goods. The respondents argued that the writ application had become infructuous as the goods were already auctioned and delivered. The court held that once the goods were confiscated and vested in the Central Government, the appellant lost the right to claim their return even on payment of fine and penalty. The auction sale was deemed legal as it was conducted after the Tribunal dismissed the appellant's application.

4. Maintainability of Writ Application Post-Auction Sale:
The court found that the writ application was not maintainable due to the changed circumstances, as the goods were already auctioned and delivered before the filing of the writ application. The appellant did not challenge the auction sale decision nor made the auction purchaser a party to the writ application. The court emphasized that the Customs authorities need not wait indefinitely for the appellant to exercise his redemption option.

Conclusion:
The court dismissed the appeal, affirming that the confiscated goods vested in the Central Government, and the appellant had no right to claim their return post-auction. The court also noted the need for transparency in future auctions, highlighting the significant drop in the value of the seized goods from Rs. 3,50,000/- to Rs. 402/-. The appeal was dismissed with no order as to costs.