2019 (10) TMI 1335 - AT - Customs

Refund of Sale proceeds of the seized Betel Nuts - Section 27 of the Customs Act, 1962 - Confiscation - penalties - HELD THAT - The Adjudicating Authority confiscated the seized goods absolutely and imposed the penalty on the applicant. It is noticed that the Adjudicating Authority has not passed an Order on the ownership of the seized goods as the goods were absolutely confiscated. On perusal of the Final Order dated 1-12-2017 of this Tribunal, we find that the Tribunal had set aside the Adjudication Order and held that such goods cannot be confiscated under the Customs Act, 1962. It appears that the Tribunal had not made any observation on the ownership of the goods. Thus, there are no ambiguity in the Final Order dated 1-12-2017 passed by the Tribunal. Penalties - HELD THAT - As the confiscation of the goods under the Customs Act has been set aside, all penalties including that imposed on the applicant have been set aside. The sale proceeds of the seized betel nuts must be returned by the Department to the owner of the goods after identifying the owner. Application disposed off.

Summary

Issues:
1. Seizure of betel nuts by customs department and subsequent confiscation.
2. Ownership of the seized goods and claim by the applicant.
3. Appeal for refund of sale proceeds and interest under Section 27 of the Customs Act, 1962.

Issue 1: Seizure of betel nuts by customs department and subsequent confiscation
The case involved the interception of two trucks loaded with betel nuts destined for Siliguri, West Bengal, by departmental officers. The goods were seized due to the absence of proper documentation, and ownership claims were made by different individuals. The investigation revealed discrepancies in ownership claims and lack of necessary certificates for transportation. The department issued a show cause notice and ultimately confiscated the betel nuts, auctioning them and appropriating the sale proceeds towards the confiscated goods. The Tribunal set aside the adjudication order, stating that the customs department failed to prove the goods were of foreign origin and smuggled, emphasizing the lack of evidence and legal basis for confiscation under the Customs Act, 1962.

Issue 2: Ownership of the seized goods and claim by the applicant
The adjudicating authority ordered absolute confiscation of the betel nuts and imposed penalties on the applicant, alleging false statements and claims to mislead the investigation. The applicant appealed the adjudication order, seeking its quashing and refund of the seizure value. The Tribunal, in its final order, did not make any observation on the ownership of the goods but set aside the confiscation under the Customs Act, 1962. It was noted that penalties imposed on the applicant were also set aside, and the sale proceeds were to be returned to the owner of the goods after identification.

Issue 3: Appeal for refund of sale proceeds and interest under Section 27 of the Customs Act, 1962
The applicant filed a miscellaneous application seeking a suitable order directing the respondent to refund the sale proceeds of the seized betel nuts and requested interest under Section 27 of the Customs Act, 1962. The applicant argued that the Tribunal's final order dated 1-12-2017 allowed the appeal and hence the sale proceeds should be refunded. The Revenue contended that the Tribunal did not decide the ownership of the goods and the applicant did not pray for such determination. The Tribunal clarified that the applicant could approach the Commissioner for any consequential relief arising from the final order, indicating that the application was disposed of with this observation.