2001 (3) TMI 114 - HC - Central Excise

Issues Involved:
1. Legality of the seizure and confiscation of Indian currency and Maruti Van.
2. Compliance with the CEGAT's order to return the seized currency.
3. Obligation of the Customs Department to refund the seized currency despite the Income-tax Department's warrant under Section 132A of the Income-tax Act.
4. Entitlement of the petitioner to interest on the seized currency.
5. Issuance of a writ of mandamus against the Customs Department.

Detailed Analysis:

1. Legality of the Seizure and Confiscation of Indian Currency and Maruti Van:
The petitioner was traveling when the local police of Beawar stopped his Maruti Van and seized Indian currency amounting to Rs. 10,49,000/- along with the van. The Customs Department subsequently seized the currency and van, issuing a show cause notice under Section 124 of the Customs Act. The petitioner claimed the currency was for purchasing a plot and not related to smuggling activities. Despite this, the Commissioner of Customs, Jaipur, confiscated the currency on 26-3-1996. However, the Central Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) set aside this order on 24-7-1998, finding insufficient evidence to prove the allegations against the petitioner.

2. Compliance with the CEGAT's Order to Return the Seized Currency:
The petitioner approached the Customs Department for the return of the currency following the CEGAT's order, but received no response. Despite a notice of demand for justice sent on 22-10-1998, the Customs Department did not comply with the CEGAT's directive. The court noted that the Customs Department is duty-bound to refund the amount immediately after the CEGAT's order, which they failed to do, leading to the writ petition for mandamus.

3. Obligation of the Customs Department to Refund the Seized Currency Despite the Income-tax Department's Warrant:
The Customs Department argued that they could not return the currency due to a warrant issued by the Income-tax Department under Section 132A of the Income-tax Act. The court found this argument untenable, stating that the Customs Department must comply with the CEGAT's order, which had become final and conclusive. The court emphasized that the Customs authorities are bound by the statutory tribunal's decision and cannot deny the refund based on the Income-tax Department's subsequent warrant.

4. Entitlement of the Petitioner to Interest on the Seized Currency:
The court awarded interest at 18% per annum on the seized currency from the date of confiscation (26-3-1996) to the petitioner. This decision was based on the prolonged denial of the use of the money by the petitioner due to the Customs Department's failure to refund the amount despite the CEGAT's order.

5. Issuance of a Writ of Mandamus Against the Customs Department:
The court issued a writ of mandamus directing the Customs Department to refund the seized currency along with accrued interest within four weeks. The court referred to the Supreme Court's decision in Bhopal Sugar Industries Ltd. v. Income Tax Officer, Bhopal, which held that refusal to comply with a superior tribunal's clear and unambiguous directions constitutes a denial of justice. The court also cited Northern Plastics Ltd. v. Collector of Customs and Central Excise, emphasizing that the Customs authorities cannot ignore or act contrary to the tribunal's decision.

Conclusion:
The writ petition was allowed, directing the second respondent to refund Rs. 10,49,000/- along with 18% interest per annum from the date of confiscation within four weeks. The court also awarded costs of Rs. 5,000/- to the petitioner.

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