2023 (6) TMI 476 - HC - Customs

Disposal of Sale / Auction proceeds - Settlement of various claims whereas the demand under the customs act is in Dispute and pending - Failure to re-export the vessel OSV BEAS DOLPHIN - breach of terms and conditions of the re-export bond executed - HELD THAT - It would be appropriate that the Revenue moves an application in the pending admiralty proceedings so that it can recover the duty demand against the petitioner. It also needs to be observed that the amounts lying deposited and available in the admiralty proceedings from sale of the said vessel, is certainly a situation of sufficient security being available to the revenue so as to recover the duty demand - It may also be observed that as fairly submitted by Mr. Pratap (petitioner), there would not be any opposition to such claim of the revenue from the petitioner. Mr. Pratap also submits that the owners of the vessel may also not contest the proceedings as the sale itself was not contested by the owners of the vessel. The total claim of the crew is stated to be Rs. 1.35 crores. The duty dues as demanded by the respondents from the petitioner subject matter of this proceedings is an amount of Rs. 4,49,35,190/-, whereas the amount realized from the sale of the vessel is about Rs. 8.75 crores - there is also a claim of the Port Trust in the tune of Rs. 1.85 crores. It is stated that even considering such claims sufficient amount is available which would secure the interest of the revenue, subject matter of the present proceedings. Thus, prima facie it appears that there is sufficient amount available to satisfy not only the dues of the crew, Port Trust, but also the duty demand in question. This petition disposed off with liberty to the petitioner to revive the present proceedings or to file a fresh petition as may be appropriate, in the event needs so arises.

Summary

Issues involved:
The judgment addresses the customs demand against the petitioner, a charter party, for breaching the terms of a re-export bond, and the subsequent sale of the vessel involved in admiralty proceedings. The main issue is the recovery of the duty demand against the petitioner from the sale proceeds of the vessel.

Details of the Judgment:

Customs Demand and Sale Proceeds:
The respondents had a customs demand of Rs. 4,49,35,190 against the petitioner for breaching the re-export bond terms. The vessel, subject to the demand, was sold as per court orders, and the sale proceeds were deposited in court. The petitioner sought a direction for the respondents to lodge their claim against the sale proceeds, highlighting an independent suit filed by the petitioner in this regard.

Pending Proceedings:
Two proceedings were ongoing in court: admiralty proceedings by the crew for their claims, to be satisfied from the sale proceeds, and a suit filed by the petitioner against the respondents. The court raised the question of the Revenue recovering dues from the available sale proceeds, as they seemed sufficient to cover all claims, including the duty demand.

Revenue Recovery and Court's Decision:
Considering the unique circumstances, the court suggested the Revenue make an application in the admiralty proceedings to recover the duty demand from the petitioner. The petitioner expressed willingness to cooperate, and the court emphasized the availability of sufficient security in the form of the sale proceeds to cover all claims, including the duty demand.

Conclusion and Future Actions:
The court disposed of the petition, allowing the petitioner to revive or file a fresh petition if needed. It kept all contentions open for both parties, enabling the Revenue to recover the amounts due through the admiralty court. The judgment emphasized cooperation and the use of available funds to settle the duty demand without unnecessary litigation.

Final Disposition:
The petition was disposed of with no costs, and the pending interim application was also resolved accordingly. The court stressed the importance of utilizing the available funds from the sale of the vessel to satisfy the various claims, including the duty demand against the petitioner.