2002 (4) TMI 87 - HC - Customs

Summary

Issues Involved:
1. Whether the customs authority is obligated to release goods following the Tribunal's order.
2. Whether the writ petition is maintainable in light of Rule 41 of the Customs, Excise, and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982.
3. Whether the pendency of a reference under Section 130(3) of the Customs Act prohibits the redemption or release of goods.
4. The applicability of Section 143 and Section 125 of the Customs Act for the release of goods.

Detailed Analysis:

1. Obligation of Customs Authority to Release Goods:
The customs authority had initially refused to release the imported walkie-talkie toys, claiming they were not permitted under the Special Import Licence for electronic toys. The goods were confiscated under Section 111(d) of the Customs Act and a fine and penalty were imposed. However, the Tribunal set aside the order of confiscation and provided consequential relief to the petitioner. The customs authority declined to release the goods due to the pending reference, leading the petitioner to seek a court order for release.

The court held that once the Tribunal has set aside the customs authority's order, it is incumbent on the authority to carry out the Tribunal's order. The customs authority's refusal to release the goods was deemed a dereliction of duty.

2. Maintainability of Writ Petition:
The respondent argued that the writ petition was not maintainable due to Rule 41 of the CEGAT Rules, which provides an alternative remedy. The court noted that Rule 41 empowers the Tribunal to ensure compliance with its orders but lacks the power to enforce them through contempt proceedings. Given the Tribunal's limited enforcement capabilities, the court found the writ petition maintainable to compel the customs authority to perform its duty.

3. Pendency of Reference and Redemption or Release:
The court examined whether the pendency of a reference under Section 130(3) of the Customs Act prohibits the release of goods. It clarified that the High Court's role in a reference is advisory, limited to answering questions of law. The court does not have the jurisdiction to stay the Tribunal's order during the pendency of the reference. Therefore, the mere pendency of a reference does not justify withholding the release of the goods.

4. Applicability of Section 143 and Section 125 of the Customs Act:
The court discussed the definitions and implications of "prohibited goods" under Section 2(33) of the Customs Act. It concluded that the imported goods, even if considered prohibited, could be redeemed at the customs authority's discretion under Section 125. The court also emphasized that Section 143 allows for the release of goods upon the execution of a bond.

Conclusion:
The court found no justification for withholding the release of the goods. It ordered that the petitioner furnish a bond for Rs. 3,50,000/- to the satisfaction of the Assistant Commissioner of Customs or the Deputy Commissioner of Customs. Upon furnishing the bond, the customs authorities were directed to release the goods within a fortnight. The writ petition was disposed of with no order as to costs.