2020 (1) TMI 1181 - HC - Indian Laws

Attachment of bank accounts of petitioner - Provisional release of goods - auction - whether the petitioner was justified in having auctioned the goods of the importer as also whether the importer was justified in not getting the goods released despite an order of provisional release? - HELD THAT - The petitioner would put an amount of ₹ 25,00,000/- in an escrow account and on its part, the competent authority would determine the question of admissibility of interest and its rate, if any, after adjudicating the dispute with regard to recovery of duty from the petitioner after giving opportunity of hearing to the petitioner - Once the escrow account is created, the bank account of the petitioner would be de-freezed. Appeal disposed off.

Summary

Issues:
1. Justification of auctioning goods of the importer
2. Justification of not releasing goods despite an order of provisional release
3. Dispute over duty amount of ?15.50 lakhs
4. Claimed amount by the department of ?31,66,745
5. Decision on putting ?25,00,000 in an escrow account

1. Justification of auctioning goods of the importer:
The High Court addressed the issue of whether the petitioner was justified in auctioning the goods of the importer. The learned counsel for the petitioner acknowledged that this issue needed to be decided by an appropriate authority. The petitioner expressed willingness to put the duty amount in escrow pending a decision on this matter. The Court directed the competent authority to determine the admissibility of interest and the rate after adjudicating the dispute regarding duty recovery, ensuring a final reasoned order in accordance with the law.

2. Justification of not releasing goods despite an order of provisional release:
The Court also considered the question of whether the importer was justified in not releasing the goods despite an order of provisional release. The petitioner's counsel highlighted that the petitioner's accounts should not be frozen for the duty amount of ?15.50 lakhs. The respondents' advocate contended that the amount was higher, including interest as per the Court's earlier directions. After discussions, the Court ordered the petitioner to put ?25,00,000 in an escrow account, subject to the competent authority's determination of interest admissibility and rate post-adjudication of the duty recovery dispute.

3. Dispute over duty amount of ?15.50 lakhs:
The petitioner disputed the duty amount of ?15.50 lakhs, arguing that the claimed amount of ?31,66,745 by the department was excessive. The Court intervened by directing the petitioner to place ?25,00,000 in an escrow account, pending the competent authority's decision on the interest and rate following a thorough adjudication of the duty recovery issue. This decision aimed to resolve the discrepancy and ensure a fair determination of the duty amount.

4. Claimed amount by the department of ?31,66,745:
The department claimed an amount of ?31,66,745, which the petitioner contested as excessive. The Court balanced the interests by instructing the petitioner to place ?25,00,000 in an escrow account, awaiting the competent authority's decision on interest admissibility and rate after resolving the duty recovery dispute. This approach aimed to address the discrepancy in the claimed amount and ensure a fair resolution.

5. Decision on putting ?25,00,000 in an escrow account:
Ultimately, the Court decided that the petitioner should put ?25,00,000 in an escrow account. This decision was made to facilitate a fair determination of the duty amount, interest admissibility, and rate by the competent authority post-adjudication of the duty recovery dispute. Once the escrow account was established, the petitioner's bank account would be de-frozen, marking the resolution of the matter.

In conclusion, the High Court's judgment addressed multiple issues related to the auctioning of goods, duty amounts, interest, and the release of goods, providing a detailed and structured approach to resolving the dispute between the parties involved.