2017 (3) TMI 1428 - AT - Customs

Whether the duty already paid by the appellant in respect of goods imported by them can be claimed as refund in the case of non-clearance of the same? - section 23 of the Customs Act, 1962 - Held that - section 23 of the CA, 1962 has no applicability in the facts and circumstances of the case. It is a case where adjudication has already been completed and the goods stand confiscated. In the present case, goods are still with the Revenue and were not cleared prior to adjudication. On the order of confiscation, the appellants have been given an option to redeem the same on payment of Redemption Fine which option the importer has not exercised. The factum of non-exercising of such option by the importer would lead to non-clearance of imported goods, which would continue to rest in the Government. If the goods have not been cleared, the question of payment of duty does not arise at all - Merely because the importer has already deposited the duty instead of waiting for the adjudication order, will not change the legal issue - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Can duty already paid by the importer for seized goods be claimed as a refund in case of non-clearance?

Analysis:
1. The appellant imported items with some undeclared goods, leading to seizure by the authorities. The original adjudicating authority found the importer guilty of illegal import and provided an option to redeem the goods on payment of Redemption Fine. The appellant did not exercise this option and applied for a refund of the duty paid.

2. The main issue to be decided is whether duty paid by the importer for the seized goods can be refunded if the goods are not cleared. The Revenue argues that abandonment of goods can only be done before the clearance order, and after adjudication, the importer must pay the confirmed duty. However, the appellant contends that since they did not clear the goods and did not exercise the redemption option, duty refund should be allowed, citing Tribunal decisions.

3. The Tribunal examined the Customs Act and the circumstances of the case. It noted that the goods were still with the Revenue, not cleared before adjudication. The option to redeem the goods, if not exercised, leads to non-clearance and continued ownership by the Revenue, eliminating the duty payment requirement. The Tribunal compared this scenario to absolute confiscation, where duty payment is not necessary, as observed in previous cases.

4. The Commissioner rejected the refund claim based on the appropriation of duty, but the Tribunal disagreed, stating that irrespective of appropriation, duty refund should be granted. The Tribunal emphasized that if the importer does not exercise the redemption option, the goods are considered absolutely confiscated, relieving the importer of duty payment obligations.

5. The Tribunal highlighted that even if duty was deposited before adjudication, failure to exercise the redemption option absolves the importer from duty payment. The appellant had already paid the penalty for the offense committed, leading the Tribunal to set aside the order and allow the refund of duty amount, providing consequential relief to the appellant.