2017 (6) TMI 742 - AT - Customs

Interest on refund of sale proceeds of confiscated Gold bars - case of appellant is that while refunding the sale proceeds, they should have also been given interest from the date of sale of the goods till the date of refund of the amount - Held that - Hon ble High Court of Madras in the case of Collector of Customs, Madras Vs. Meena A. Bharwani 2001 (9) TMI 126 - HIGH COURT OF JUDICATURE AT MADRAS , wherein it was held that whenever Revenue disposes of the confiscated goods during the pendency of the legal proceedings, the litigant is entitled to the refund of the sale proceeds along with payment of interest - matter remanded to the original adjudicating authority to quantify the interest amount at the prescribed rates - appeal allowed by way of remand.

Summary

Issues: Seizure and confiscation of gold bars, redemption fine, refund of sale proceeds, entitlement to interest on refund amount.

Seizure and Confiscation of Gold Bars: In the case, 70 gold bars were seized by the Directorate of Revenue Intelligence (DRI) from the appellant's possession in the year 2000. The original adjudicating authority confiscated the gold bars, which were later remanded back by the Tribunal through Commissioner (Appeals).

Redemption Fine and Refund of Sale Proceeds: The appellants were initially given an option to redeem the goods on payment of a specific amount. Upon rehearing, the redemption fine was reduced, and the gold bars were directed to be returned to the assessee. However, during the proceedings, the gold bars were sold by the Revenue, and the sale proceeds were returned to the appellant after deducting the redemption fine and duty payable.

Entitlement to Interest on Refund Amount: The appellant contended that interest should have been paid on the refund amount from the date of sale of the goods till the date of refund. A writ petition before the High Court of Madras resulted in a direction for the Revenue to consider and pay appropriate interest on the refund amount. The Division Bench observed that interest might be payable on the confiscated goods and left the decision to the appellants, directing them to refund the amount with interest, if any.

Legal Precedents and Decision: The appellant cited decisions from various High Courts where it was held that the litigant is entitled to interest on the refund of confiscated goods. Noting that these decisions were not considered by the lower authorities, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority to quantify the interest amount based on the prescribed rates from the High Court decisions. The Tribunal expected the denovo proceedings to be completed within three months from the date of the order.

In conclusion, the Tribunal directed the original adjudicating authority to determine the interest amount based on legal precedents, emphasizing the entitlement of the litigant to interest on the refund of confiscated goods. The decision highlighted the importance of considering relevant legal decisions in such cases and urged a prompt resolution of the matter.