2016 (4) TMI 8 - AT - Customs

Validity of impugned order - Competiting claims of title to seized goods - Seizure of assorted gold jewellery - Held that - it is axiomatic that there is no provision under the Customs Act, 1962 which authorizes adjudicating authorities under this Act to decide competing claims of title to goods which are the subject matter proceedings under the Act,. Adjudication and determination of competiting claims of title to goods which are subject to proceedings under the Customs Act is nevertheless outside the purview and jurisdiction of authorities under the Customs Act, 1962. We also perceive that the judgment of the Hon ble Delhi High Court dated 4.10.10 (Civil Writ Petition No. 13070/2009) does not direct the respondent / Commissioner to adjudicate upon and determine competiting claims regarding title to the seized gold jewellery. It is a trite legal principle that adjudicating power is essentially a legislated grant and is not to be inferred as a derivative of a curial decree. Learned Counsel for the appellant, for the respondent SBI and learned DR fairly concede the position that neither the respondent/ Commissioner nor this Tribunal have jurisdiction to determine, in the circumstances of this case, whether the seized goods belong to either the appellant; to M/s. Vee Ess Jewellers; or to the State Bank of India, under the hypothecation agreement between the later. Therefore, the declaration under the impugned order that the gold seized at the air port belongs to M/s. Vee Ess Jewellers, is a conclusion which is patently without jurisdiction and therefore non-est and inoperative. - Appeal disposed of

Summary

Issues:
1. Jurisdiction of the Commissioner to decide disputes over title to seized goods.
2. Competing claims of title to the seized gold jewelry.
3. Authority to adjudicate competing claims under the Customs Act, 1962.

Analysis:

Issue 1: Jurisdiction of the Commissioner
The appeal challenged an order by the Commissioner, Customs (Air, Cargo, Export) New Delhi, regarding the ownership of seized gold jewelry. The High Court directed the Commissioner to decide the appellant's representation within three months but did not grant authority to decide disputes over the title of the goods. The Tribunal emphasized that the Commissioner lacked jurisdiction to determine ownership disputes between the exporter, importer, and State Bank of India (SBI) based on a hypothecation agreement.

Issue 2: Competing Claims of Title
Competing claims arose over the ownership of the seized gold jewelry between the exporter and SBI, which claimed rights under a hypothecation agreement with the importer. The Tribunal noted that resolution of these claims required the importer to be a party to the proceedings. The appellant contended that the goods belonged to them and had been exported to India, disputing SBI's claim. However, the Tribunal highlighted the absence of M/s. Vee Ess Jewellers as a party, crucial for determining ownership.

Issue 3: Authority under Customs Act
The Tribunal clarified that adjudicating authorities under the Customs Act, 1962, lacked the jurisdiction to decide competing claims of title to goods subject to customs proceedings. It emphasized that the Commissioner and the Tribunal could not determine ownership disputes over seized goods. The Tribunal declared the conclusion in the impugned order, attributing ownership to M/s. Vee Ess Jewellers, as invalid due to lack of jurisdiction. It directed the appellant to seek appropriate legal remedies to establish ownership of the seized gold jewelry.

In conclusion, the Tribunal disposed of the appeal, invalidating the finding that M/s. Vee Ess Jewellers owned the seized gold jewelry. The judgment highlighted the limitations of the Commissioner's jurisdiction in deciding ownership disputes and emphasized the need for legal remedies to establish ownership rights over seized goods.