2017 (1) TMI 137 - HC - Customs

Legality of order - Release of gold only after completion of adjudication - the petitioner says that bank guarantee equivalent to 50% of the value put down in the communication dated 10.11.2016 could be furnished coupled with a personal bond for the remaining amount of the value of the seized goods i.e. the gold bars - Held that - Seizure in this case took place on 23.12.2015 that is nearly a year ago. To date adjudication has not been completed - the communication dated 10.11.2016 is quashed. Respondents are however given liberty to conclude the adjudication with due expedition though not later than four (4) weeks from the date of receipt of a copy of this order. The respondents will however release the seized goods i.e. the gold bars to the petitioner on a bank guarantee being furnished equivalent to 50% of the value of the seized goods as indicated in the communication dated 10.11.2016 - the petitioner will furnish a personal bond for the remaining 50% of the value of the seized goods i.e. the gold bars - petition disposed off - decided partly in favor of petitioner.

Summary

Issues:
Challenge to communication for disposal of seized gold bars without adjudication order; Request for release of seized goods; Allegation of fabricated letter by respondents; Compliance with statutory provisions for release of goods.

Analysis:
1. The petitioner challenged a communication dated 10.11.2016, which stated that the seized gold bars would be disposed of unless a stay was obtained, despite no adjudication order being passed. The petitioner sought release of the goods based on a Mahazar dated 23.12.2015.

2. The petitioner's journey from Abu Dhabi to Chennai on 23.12.2015 led to the seizure of four gold bars weighing 466 grams, valued at ?11,93,892. A writ petition filed earlier directed the completion of adjudication proceedings before seeking release of the gold bars.

3. The petitioner's subsequent writ petition challenged the denial of provisional release of goods on 12.02.2016. The petitioner argued against confiscation without an adjudication order and claimed no show cause notice was issued within the statutory period.

4. The petitioner contended that the respondents wrongly relied on a letter from 23.12.2015 to deny release, alleging the contents were fabricated. The petitioner cited a Delhi High Court judgment for support.

5. The respondents admitted the absence of an adjudication order and acknowledged errors in the communication. The respondents argued for the power to proceed with adjudication despite the errors.

6. The court found the communication erroneous and ruled that absolute confiscation required an adjudication order. Despite the petitioner's waiver of notice, the court ordered release of the goods due to the prolonged adjudication delay.

7. The court quashed the communication, allowing for adjudication within four weeks and release of the gold bars upon furnishing a bank guarantee for 50% of the value and a personal bond for the remaining amount. The writ petition was disposed of with no costs.