2023 (5) TMI 674 - HC - Customs

Smuggling - gold biscuits with foreign markings - relevant date for valuation of goods - absolute confiscation - Personal penalty imposed on the petitioner as well as two others under Section 112 of Customs Act - HELD THAT - The narration relating to the litigation is really of no consequence in the matter as the valuation of the asset in question for determination of duty, emanates from order dated 24/31.07.2015 which has attained finality as on date. The narration in regard to the litigation is for purposes of completion and seeing as the petitioner has emphasised only upon those orders that are of no consequence really, in deciding the issue relating to valuation of the goods for determination of customs duty. The enactment contemplates two separate and distinct schemes for valuation in the context of imposition of duty on the one hand, and fixing redemption fine, on the other. As far as duty is concerned, the applicable provisions are Sections 14 and 15. Section 14 talks of valuation of the goods which is the manner by which such valuation should be effected and Section 15 crystallizes the date as on which such valuation must take place. Coming to redemption fine, Section 25 is a code by itself and states that the valuation for purposes of fixing redemption fine, shall not exceed the market price as on the date of confiscation of the goods. Thus, the Act contemplates two separate and different scenarios, one while imposing customs duty and the other, in the levy of redemption fine. The argument of the petitioner to the effect that the date of valuation must be taken to be the date of confiscation of the goods for the purposes of levy of customs duty thus has no merit. Impugned order dated 09.11.2020 calls upon the petitioner to pay duty as per Section 15(1)(c) of the Customs Act, 1962 and there is no legal infirmity made out in this regard - Petition dismissed.

Summary

Issues:
The judgment involves issues related to the confiscation of smuggled gold biscuits, determination of duty, and redemption fine.

Confiscation of Smuggled Gold Biscuits:
The petitioner was found in possession of 22 gold biscuits, smuggled into the country, concealed in various places. The Collector Customs concluded that the gold biscuits were liable for absolute confiscation under the Customs Act, 1962. The petitioner was arrested and remanded to judicial custody.

Determination of Duty and Redemption Fine:
The Commissioner (Appeals) modified the order, allowing the petitioner to redeem the goods upon payment of a fine. The duty liability was computed by the Assistant Commissioner, including customs duty, redemption fine, personal penalty, and warehouse charges. The officer determined the duty to be paid based on the date of payment of duty, in accordance with Section 15 of the Act.

Litigation and Judicial Review:
The petitioner appealed to the Customs Excise and Service Tax Appellate Tribunal, which dismissed the appeal. The petitioner then filed a Civil Miscellaneous Appeal before the High Court, which was allowed, remanding the matter to the Tribunal to reevaluate the market value of the gold for fixing the redemption fine. The Court emphasized that the redemption fine should not exceed the market price of the confiscated goods.

Legal Interpretation and Decision:
The Court clarified that the valuation for determining duty and redemption fine are distinct processes under the Act. While duty determination is based on Sections 14 and 15, redemption fine valuation is governed by Section 25. The Court upheld the order directing the petitioner to pay duty as per Section 15(1)(c) of the Customs Act, 1962. The challenge to the order was rejected, and the release of the confiscated gold biscuits was ordered upon payment of duty within two weeks.

Conclusion:
The writ petition challenging the order was dismissed, with no costs awarded. The judgment reaffirmed the distinction between duty determination and redemption fine valuation, upholding the decision on duty payment and release of the confiscated gold biscuits.