2018 (8) TMI 1412 - HC - Customs

Refusal of release of goods (gold ornaments) despite payment of the entire redemption fee and penalty - case of Department is that certification proceedings are pending before the Additional Chief Judicial Magistrate s (Economic Offences) Court, Ernakulam and hence the release was not being effected - Held that - Admittedly, there is no stay petition filed by the Department before the first appellate authority. As has been noticed by the learned Single Judge, the order passed under the Customs Act, 1962 is now in force and the Department is obliged to release the goods (gold ornaments) unless there is a stay obtained from the appropriate Forum. The Department is directed to file a stay application within a period of two weeks from today. If such a stay application is not filed within the period specified, then there shall be immediate release of the goods on expiry of the said period - appeal disposed off.

Summary

Issues involved:
1. Refusal to release goods despite payment of redemption fee and penalty.
2. Certification proceedings pending before the Additional Chief Judicial Magistrate's Court.
3. Appeal filed by the Department before the first appellate authority.
4. Allegation of misclassification in the export of gold ornaments.
5. Failure to release goods by the Department without a stay petition.
6. Direction for the Department to file a stay application.

Analysis:
1. The appellant, an exporter, filed an appeal against the refusal to release goods despite payment of redemption fee and penalty. The Department cited certification proceedings pending before the Additional Chief Judicial Magistrate's Court as the reason for non-release. However, the Department admitted in a counter affidavit that the certification proceedings were over but contended that an appeal had been filed by them before the first appellate authority. The learned Single Judge found that as long as the redemption order (Ext.P1) is valid, the authorities must comply with it. The appellant also filed an appeal seeking a reduction in the redemption fine and penalty.

2. The facts revealed that the appellant purchased gold from a nominated agency as per the Foreign Trade Policy procedures. The appellant exported gold ornaments, which were detained by Customs authorities due to misclassification. The misclassification involved declaring the weight of precious stones embedded in the ornaments as part of the gold weight exported to benefit from duty entitlements. The adjudicating authority passed order Ext.P1 imposing redemption fine and penalties, which the appellant paid. Despite this, the Department did not release the goods citing their own appeal against Ext.P1. No stay petition was filed by the Department before the first appellate authority.

3. The High Court directed the Department to file a stay application within two weeks; failing which, immediate release of the goods was ordered. If a stay application was filed, the Commissioner (Appeals) was instructed to dispose of the appeals or at least the stay petition within one month. Cooperation from both parties was mandated for timely consideration. Failure to comply within a month would result in the release of the seized goods. The appellant was required to provide a certified copy of the judgment to the first appellate authority for compliance. The Writ Appeal was disposed of with no costs imposed.