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2017 (5) TMI 131 - HC - CustomsPrinciples of natural justice - import of broadcasting equipment - The petitioner was aggrieved by the fact that his goods were auctioned off without its knowledge and before giving it opportunity of being heard - respondents contentions are that the goods could not be held by the Custodian for an indefinite period; advertisement for sale was given due publicity. Had the petitioner wished, it could have either cleared the goods, or later, participated in the auction. Their actions, according to them, are in consonance with provisions of the Customs Act. Held that - Once the customs authorities were aware that the confiscation order was not final, but subject to the outcome of the appeal, they were accountable to the importer in the event of its success. A notice to the petitioner could have averted a possible risk of liability, because it was to notify the importer to make arrangement for purchase. The customs authorities allowed to sell the goods, at a vastly depressed price, despite their assumption that they were prohibited articles. However, the CESTAT upheld the declared value of the goods. The amount payable to the petitioner, is that which was assessed to be the value of the goods at the time of seizure i.e., ₹ 51,70,619/- and not the amount for which the respondent sold the petitioner s goods for i.e., ₹ 81,000/-. Furthermore Circular No.711/4/2006-Cus (AS) dated 14.02.2006 mandates the customs authorities to give due notice of sale to the petitioner before making the auction. Petition allowed - decided in favor of petitioner.
Issues Involved:
1. Confiscation and Auction of Imported Goods 2. Restitution of Value of Confiscated Goods 3. Compliance with Legal Procedures and Natural Justice 4. Responsibility and Liability of Customs Authorities and Custodian Detailed Analysis: 1. Confiscation and Auction of Imported Goods The petitioner, a company, imported broadcasting equipment declared under Bill of Entry No.7687005 dated 17.08.2012. The customs authorities alleged that the goods required a WPC license and classified them under CTH 85255020, leading to their confiscation on 25.10.2012 and imposition of a penalty of ?5 lakh. Despite a stay order from the CESTAT during the appeal, the goods were auctioned by the custodian, M/s Delhi International Airport (P) Ltd (DIAL), for ?81,000. 2. Restitution of Value of Confiscated Goods The petitioner succeeded in the appeal before the CESTAT, which set aside the confiscation order. The petitioner then sought the declared value of the goods, ?51,70,619/-, along with interest, as restitution. The court referenced precedents like Northern Plastic Ltd. v. Collector of Customs and Central Excise and Kailash Ribbon Factory Ltd. v. Commissioner of Customs & Central Excise, which support the restitution of the declared value of goods when confiscation is overturned. 3. Compliance with Legal Procedures and Natural Justice The petitioner argued that the auction was conducted without proper notice, violating the customs circular F.No.711/4/2006-Cus(AS) dated 14.02.2006, which mandates notice to the owner before auction. The court found that the customs authorities were negligent and failed to comply with the principles of natural justice, as they did not notify the petitioner adequately before the auction. 4. Responsibility and Liability of Customs Authorities and Custodian The customs authorities claimed that the auction was conducted by the custodian under Section 48 of the Customs Act, 1962, due to the petitioner’s failure to clear the goods. However, the court held that the customs authorities were responsible for the auction and should have ensured compliance with legal procedures. The court directed the customs authorities to pay the declared value of the goods, ?51,70,619/-, after deducting customs duty, with 9% interest per annum from the date of the unauthorized auction until payment. Conclusion The court concluded that the customs authorities wrongly disposed of the petitioner’s goods during the appeal period and failed to follow proper legal procedures. The customs authorities were directed to compensate the petitioner for the declared value of the goods along with interest. The writ petition was allowed, and no costs were ordered.
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