2023 (11) TMI 1092 - HC - Customs

Refund of the value of the goods that were seized and confiscated - Auction of goods by the Customs Department - the order of seizure were set aside - petitioner claims for a refund of the complete value of the goods and not the value as per the auction - HELD THAT - No material is placed by the petitioner before the Court to arrive at any conclusion that the estimated value stated in the order of seizure is also a determined value of the goods at the time of its seizure. As it is the petitioner who had procured the goods which were seized and confiscated and later on put up on auction, he would be the best person to have the knowledge about the actual value of the goods as it may have been. The same would also be in conformity with provision of Section 106 of the Indian Evidence Act, 1872. But as a dispute has been raised by the petitioner that he is entitled to the value of the goods as it stood on the date of seizure, the basic material to adjudicate the said issue would be what would be the value as may be determined as on the date when the goods were seized. In the absence of such material being available, it would be futile to decide the issue as to whether in a circumstance where the goods were sold by public auction, the petitioner would be entitled to a refund of the value of the goods as it stood on the day it was seized. In the meantime, liberty is granted to the petitioner to assail the auction of the goods that may have been done by the respondents in the Customs Department as regards the valuation of the goods and we are clarifying that the liberty to challenge the auction would be confined to a challenge to the value of the goods as determined in the auction - Petition disposed off.

Summary

Issues Involved:
The issues involved in the judgment are the seizure and confiscation of raw rubber by Customs authorities, subsequent auction of the seized goods, claim for refund of the value of the goods, determination of the value of the goods, and the entitlement of the petitioner to a refund based on the value at the time of seizure versus the auction price.

Seizure and Confiscation:
The petitioner, a trader in raw rubber, had 2840.87 kg of raw rubber seized by Customs authorities under Section 110 of the Customs Act, 1962. The estimated value of the seized raw rubber was Rs. 5,68,174 @ Rs. 200 per kg, leading to confiscation under Section 105 of the Act. The seized goods were later auctioned for Rs. 1,45,000. The confiscation was set aside by the Commissioner (Appeal), Customs and Central Excise, Guwahati, resulting in a claim for a refund of the value of the goods by the petitioner.

Refund Claim and Legal Proceedings:
The petitioner claimed for a refund of the complete value of the goods seized and confiscated, not just the auction price. A previous order of the Division Bench of the Court addressed a similar issue where the petitioner sought a refund of Rs. 5,68,174, but the Customs Department offered Rs. 1,55,000. The present writ petition challenged the refund amount offered, emphasizing the estimated value of the seized goods.

Determining Value of Goods:
The Deputy Commissioner in the Customs Department, while disposing of the petitioner's representation, noted that the goods were sold through public auction after confiscation. The order highlighted that the value of the goods was assessed by a Government registered valuer at Rs. 50 per kg before the auction. The petitioner argued that the estimated value at the time of seizure should be the determined value for refund purposes, citing a Supreme Court judgment.

Legal Interpretation and Decision:
The Court considered the Supreme Court's ruling that upon confiscation being set aside, the owner is entitled to the value of the goods at the time of seizure. However, in this case, the goods were auctioned, and the determined auction value was considered valid unless challenged. The Court emphasized the need for concrete evidence of the value at the time of seizure to decide on the refund entitlement. The petitioner was granted liberty to challenge the auction valuation and seek further review based on the outcome of such challenge.

Conclusion:
The writ petition was disposed of, allowing the petitioner to challenge the auction valuation. The Court clarified that any challenge should focus on the value determined in the auction. Further review on the refund entitlement based on the seizure value versus auction value was permitted after the challenge process.