2017 (7) TMI 81 - HC - Customs

Return of seized goods - difference in weight of goods confiscated and weight of goods returned - At the time of release, the Customs Authorities could make over 926.65 kgs/quintals instead of 1,000 kgs/quintals of the sugar to the petitioner - Held that - The justification in short delivery is that the goods were kept at the godowns belonging to the petitioner in sealed condition and the when the seal was removed the balance was not found. In the facts of the present case, the justification sought to be canvassed on behalf of the BSF does not inspire confidence. The Customs Authorities had taken provision of 1000 kgs/quintals from the BSF. At no point of time did the Customs Authorities complain that 1000 kgs/quintals of sugar was not made over by the BSF - The Customs Authorities will, therefore, pay the petitioner the value of 73.35 kgs/quintals of sugar taking the same at ₹ 14/- per kg. Interest on account of encashment of bank guarantee - Held that - The nature of transaction between the parties being commercial, it would be appropriate to direct the Customs Authorities to pay interest on the sum of ₹ 7,00,000/- for the period from April 5, 2008 till January 29, 2010 at the rate of 10% per annum. Petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Return of seized sugar or its value along with interest for wrongly invoked bank guarantee.
2. Discrepancy in the quantity of sugar returned to the petitioner.
3. Refund of bank guarantee and entitlement to interest on the wrong invocation.

Analysis:
1. The petitioner sought the return of 73.35 kgs/quintals of sugar or its value, along with interest due to the wrongful invocation of a bank guarantee. The Border Security Force (BSF) initially seized 1000 kgs/quintals of sugar, which was later handed over to the Customs for confiscation proceedings. The petitioner, after a successful appeal, applied for the return of the goods but received only 926.65 kgs/quintals. The Court held that the Customs Authorities must pay the petitioner the value of the shortfall, calculated at ?14/- per kg, within four weeks.

2. The Customs Authorities argued that they were not responsible for the discrepancy in the quantity of sugar returned to the petitioner. However, the Court found that the justification provided was not convincing. It was noted that the Customs Authorities failed to deliver the entire 1000 kgs/quintals of sugar to the petitioner during provisional release, resulting in a shortfall of 73.35 kgs/quintals. Therefore, the Customs Authorities were directed to compensate the petitioner for the shortfall within the specified time frame.

3. Regarding the bank guarantee, the Customs Authorities invoked it prematurely, before the appeal process was concluded. The Court determined that the Customs Authorities wrongfully withheld the petitioner's money from April 5, 2008, to January 29, 2010, without proper authorization. As the transaction was commercial in nature, the Court ordered the Customs Authorities to pay interest at a rate of 10% per annum on the sum of ?7,00,000/- for the mentioned period. This interest payment was also required to be made within four weeks of the Court's order.

In conclusion, the petition was disposed of with the Customs Authorities instructed to fulfill the above directives, and no costs were awarded in the case.