2019 (2) TMI 976 - HC - Customs

Release of the confiscated goods - furnishing of Bank Guarantee - applicability of decision in the case of C.C.E.C. S. TAX, SURAT-II VERSUS DHARMESH PANSURIYA 2017 (9) TMI 1454 - CESTAT AHMEDABAD - Held that - In the present case, the total value of the confiscated goods is less than the value of confiscated goods in the case of Dharmesh Pansuriya 2017 (9) TMI 1454 - CESTAT AHMEDABAD . However, since in this case it is the applicants who are in appeal, at this stage they cannot claim complete parity with the case of Dharmesh Pansuriya. Besides, the case of Dharmesh Pansuriya has not attained finality as the appeal of the revenue has been admitted by this court. However, considering the fact that this court has found that a prima facie case has been made out and has admitted the appeal on substantial questions of law, this court is of the view that the confiscated goods are required to be released on appropriate terms and conditions. The interest of justice would be met if at this stage the applicants are directed to pay redemption fine of 10% of the value of the confiscated goods and 1% of the amount of penalty and further furnish bank guarantees of ₹ 50 lakhs each, which shall be kept alive till the final disposal of the appeal - application allowed.

Summary

Issues:
Release of confiscated gold bars, diamonds, and jewelry; Stay of recovery of penalties during tax appeal.

Analysis:
The applicant sought release of confiscated gold bars, diamonds, and jewelry belonging to a company, along with a stay on penalties imposed during a tax appeal. The original appellants challenged an order confiscating goods valued at ?2,70,12,710 and ?3,20,96,437 under specific sections of the Customs Act, 1962. The Tribunal dismissed their appeals and ordered redemption fines equal to 50% of the goods' value. The applicants argued that the case did not fall under the mentioned sections and cited a precedent where a redemption fine was set at 6% of the confiscated goods' value. They requested release based on similar terms. The respondents highlighted a case where the court directed a bank guarantee in addition to the redemption fine. The court noted similarities between the cases and decided to release the goods under specific conditions.

The court found that the applicants could not claim complete parity with the precedent case as they were the appellants. However, considering the prima facie case made out in their appeal, the court directed the payment of a redemption fine of 10% of the goods' value, 1% of the penalty amount, and the furnishing of bank guarantees of ?50 lakhs each to be kept alive till the appeal's final disposal. The court ordered the release of confiscated goods within two weeks of meeting these conditions and stayed the penalties until the appeal's conclusion. The application was allowed accordingly, providing interim relief to the applicants.