2009 (8) TMI 81 - HC - Customs

Re import of rejected exported goods duty free clearance - . The consignee in Hongkong observed certain variations in the specifications of the exported bulk drug and therefore rejected the goods - On receipt of the goods, the petitioner filed a bill of entry on 15th march 1990 claiming duty free clearance u/s.20 of the Customs Act, 1962 AC refused to allow the duty free clearance and issued SCN Customs Authorities disposed of the goods sometime in November 1990 - the petitioner has filed this petition for writ of mandamus directing the delivery of goods or payment of the price thereof with interest held that petitioner is entitled for value of goods at claimed in writ petition interest also allowed for 18 years at the rate of 6% as against 18% claimed by the petitioner

Summary

Issues:
- Petition for writ of mandamus to return consignment or pay value with interest
- Dispute over duty free clearance of consignment
- Goods auctioned by Customs Authorities
- Failure to deliver goods or compensate petitioner
- Respondents liable to pay value of goods
- Calculation of interest rate on payment

Analysis:
The petitioner filed a petition seeking a writ of mandamus directing the respondents to return a consignment of 500 kg of Erythromycin or pay its value of Rs.14,91,500 with interest. The consignment was exported in 1987 but was rejected by the consignee due to variations in specifications. Despite clearance being claimed under the Customs Act, duty free clearance was refused, leading to a show cause notice for confiscation. The matter was remanded back and eventually, the goods were transferred to a bonded warehouse. The Customs Authorities auctioned off the goods in November 1990, and the petitioner demanded delivery or compensation. The respondents failed to act, prompting the petition for mandamus.

Regarding the dispute over duty free clearance, the Assistant Collector initially refused clearance, leading to a prolonged legal battle. The petitioner's appeals and requests for clearance were met with delays and inaction by the Customs Authorities. Despite the goods being confirmed as of Indian origin, they were auctioned off, causing the petitioner to seek redress through the legal system.

The affidavit filed by Mr. Gonsalves on behalf of respondent no.3 - Air India, detailed the auctioning process and the removal of goods from the warehouse. The Customs Authorities confirmed the auction and permitted the goods to be taken by the purchaser. The respondents acknowledged the value of the goods claimed by the petitioner, leading to the court's decision to hold them liable for the value of the goods and award interest at a market rate of 6% per annum from the date of the petitioner's approach to the Collector of Customs.

In conclusion, the court allowed the petition, directing respondents 1 and 2 to pay the petitioner Rs. 14,91,500 along with interest at 6% per annum from the date of the petitioner's approach to the Collector of Customs until payment, in addition to the costs of the petition. The judgment highlighted the failure of the respondents to deliver the goods or compensate the petitioner, ultimately holding them accountable for the value of the auctioned goods.