2020 (1) TMI 320 - AT - Customs

Smuggling - Gold - Disposal of seized gold on the part of Revenue - it is submitted that department had not followed any procedure for the disposal of the gold and the said fact has been admitted by the department vide their letter dated 16.03.2018 - notice is not served to the owner or to the person from whom such goods were recovered - benefit of N/N. 31/1986- Customs dated 05.02.1986 - HELD THAT - From N/N. 31/1986- Customs dated 05.02.1986, it is apparent that gold in all forms, including bullions, ingot, coin, ornament, crude jewellery is one of the specified goods therein - Further it is observed that the gold was seized on 02.06.1999, the order of confiscation was announced on 23.03.2000. The provision of section 110 of CA permits the disposal of seized goods. In the present case pursuant to the said seizure the original adjudicating authority had confirmed the confiscation where after only the department proceeded for disposal of goods, it being one of the specified goods, in terms of the notification as passed under Section 110(1A) of the Customs Act. Section 1B of 110 of Customs Act provides a procedure to be undertaken by the proper officers for disposal of the goods. It is apparent from record that the said procedure was also duly followed by the department as the inventory of the seized goods was got prepared on 02.06.1999 on the date of seizure itself. The same was also got verified by the Additional Civil Judge (Jr. Division)-Cum-Judicial-Magistrate, Bikaner that too twice i.e. on 03.06.1999 and also on 16.05.2000. Thereafter the impugned goods were deposited in the Malkhana of New Customs House, IGI Airport, New Delhi on 13.07.2000 from where the gold was handed over to State Bank of India (SBI) on 20.03.2001 for disposal which was ultimately sold by SBI on 26.03.2001 for an amount of ₹ 4,84,545/- - This particular perusal is clear enough to show that the disposal of goods was very much in compliance of the statutory procedure. Otherwise also there is always a presumption of correctness in the act of discharge of duty by a competent officer. There is no evidence produced by the Appellant to rebutt the said presumption. In the light of the fact that gold is a commodity the value where of has been increased enormously since the date of impugned disposal in the year 2001 till the date of the order of return in the year 2015 and that there is no apparent fault on part of the department while disposing the same. The department rather has duly complied with the order of return of confiscated goods of the year 2015 by refunding the sale proceeds of the gold as was received in the year 2001. The said amount has duly been encashed by the Appellant that to more than a year prior filing of the impugned appeal. The question is answered with the finding that in the given facts circumstance, the order of this Tribunal stands duly complied with when department returned the sale proceeds of impugned gold as were received in the year 2001 when this gold was auction sold. Thus the appellant is not held entitled for the gold as such nor for its market value as prevalent in the year 2015 - appeal dismissed.

Summary

Issues Involved:
1. Legality of the confiscation and disposal of the seized gold.
2. Compliance with the statutory procedures for disposal of seized goods.
3. Entitlement of the appellant to the market value of the gold as of 2015.

Issue-wise Detailed Analysis:

Legality of the Confiscation and Disposal of the Seized Gold:
The gold was seized on 02.06.1999 from Shyam Lal Pal, who could not produce valid documents for its lawful possession. The department considered the gold as smuggled and seized it under Section 110 of the Customs Act, issuing a notice of confiscation under Section 111. The adjudicating authority confirmed the confiscation on 23.03.2000, and the order was upheld by the Commissioner (Appeals) on 31.08.2004. The Tribunal later directed the release of the gold to Shri Badri Narayan Sharma on 04.08.2015.

Compliance with the Statutory Procedures for Disposal of Seized Goods:
The department followed the procedure laid down in the Customs Preventive Manual for the disposal of the seized gold. The inventory of the seized goods was prepared and verified by the Additional Civil Judge, Bikaner. The gold was deposited in the Malkhana of New Customs House, New Delhi, and later handed over to the State Bank of India for disposal. The gold was sold by SBI on 26.03.2001 for ?4,84,545. The Tribunal noted that the disposal was in compliance with statutory procedures and there was a presumption of correctness in the act of discharge of duty by competent officers, as held in the case of Ajanta Music Palace Vs. Collector of Customs.

Entitlement of the Appellant to the Market Value of the Gold as of 2015:
The appellant contended that the department did not follow the proper procedure for the disposal of the gold and sought either the return of the gold or its market value as of 2015. The department argued that the disposal was done in accordance with the statute and the sale proceeds were already released to the appellant. The Tribunal observed that the disposal was in compliance with statutory provisions and the appellant had failed to challenge the disposal during previous appeals. The Tribunal cited the case of Shabbir Ahmed Abdul Rehman Vs. Union of India, where it was held that the Customs Authority is liable to return the sale proceeds without deducting the duty. The Tribunal concluded that the department had duly complied with the order by refunding the sale proceeds received in 2001 and the appellant was not entitled to the market value of the gold as of 2015.

Conclusion:
The Tribunal dismissed the appeal, holding that the department had complied with the order by refunding the sale proceeds of the gold as received in 2001. The appellant was not entitled to the gold or its market value as of 2015, and there was no infirmity in the order under challenge.