2023 (2) TMI 403 - HC - Customs

Seeking release of goods - goods imported by the petitioner constitute bona fide baggage or not - the option to redeem the confiscated goods had not been exercised within the maximum period of 120 days from the date of the adjudication order - Commissioner of Customs (appeal) set aside to the extent of rejection of petitioner s request on the ground of delay in seeking redemption beyond the prescribed period - Revenue has went into appeal before Tribunal - HELD THAT - Once the appellate authority has passed the order-in-appeal and directed release of the goods on payment of redemption fine, it is not open to respondent No.5 to decline release of such goods despite payment of redemption fine by the petitioner. Respondent No.5, being an officer lower in hierarchy than the Commissioner of Appeals, is bound to comply with the order of the higher appellate authority, unless the order of the higher appellate authority is stayed by a still higher forum. As has been observed by the Supreme Court, unless there is adherence to the principle of judicial discipline, there would be chaos in administration of the tax laws. Such a situation cannot be permitted. The respondents are directed to release the goods declared by the petitioner on 13.08.2021 forthwith upon due verification of payment of redemption fine - petition allowed.

Issues Involved:
1. Legality of the order dated 15.12.2022 refusing to release the petitioner's goods.
2. Validity of the baggage declaration and subsequent confiscation of goods.
3. Compliance with appellate authority decisions.
4. Application of judicial discipline and adherence to appellate orders.

Issue-Wise Detailed Analysis:

1. Legality of the order dated 15.12.2022 refusing to release the petitioner's goods:
The petitioner sought quashing of the order dated 15.12.2022 passed by respondent No.5, which refused to release the goods. The court noted that the petitioner had paid the redemption fine, including customs duty, social welfare cess, IGST, and penalty. Despite this, respondent No.5 declined the request for clearance, citing Section 125(3) of the Customs Act, which nullifies the option to redeem confiscated goods if not exercised within 120 days from the adjudication order. The court found this reasoning insufficient, especially since the appellate authority had set aside the rejection of the redemption claim and ordered the release of goods.

2. Validity of the baggage declaration and subsequent confiscation of goods:
The petitioner declared goods under the Non-Transfer of Residence (NTR) category, valued at Rs.3,65,000. Respondents rejected this declaration, determining the value at Rs.20,35,391, and issued a show cause notice for confiscation and penalty under various provisions of the Customs Act. The order-in-original dated 21.10.2021 confirmed the rejection of the declaration and ordered confiscation but allowed redemption on payment of fine. The petitioner paid the redemption fine but faced refusal for goods clearance due to alleged delay.

3. Compliance with appellate authority decisions:
The appellate authority, via order-in-appeal dated 12.09.2022, set aside the rejection of the redemption claim and directed the release of goods upon payment of applicable duties, penalty, and redemption fine. A corrigendum on 28.09.2022 clarified this directive. Despite this, respondent No.5 issued the impugned order on 15.12.2022, citing a pending appeal by the Customs Department against the appellate order. The court emphasized that without a stay on the appellate order, respondent No.5 was bound to comply with it.

4. Application of judicial discipline and adherence to appellate orders:
The court reiterated the principles of judicial discipline, referencing Supreme Court rulings in Union of India v. Kamlakshi Finance Corporation Ltd. and Collector of Customs v. Krishna Sales (P) Ltd., which mandate that orders of higher appellate authorities must be followed unless stayed by a competent court. The court highlighted that non-compliance leads to undue harassment and administrative chaos. It cited similar rulings from the Bombay High Court and its own previous decisions, stressing that subordinate authorities must adhere to appellate orders unless there is a stay.

Conclusion:
The court set aside the order dated 15.12.2022 by respondent No.5 and directed the release of the goods upon verification of payment of the redemption fine. The writ petition was allowed, emphasizing the necessity of following appellate orders to maintain judicial discipline and administrative order.

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