2003 (11) TMI 95 - HC - Customs

Seizure - Realisation of the seizure value of the goods - sewing machine and accessories - Whether the case seizure value of the goods should be given to the petitioner or the value fetched by sale should be appropriate, under law - HELD THAT - In my view, until and unless the entire proceedings came to an end, the Department concerned should have held the goods as a trustee thereof as ultimately the goods were required to be returned to the petitioner either by way of redemption or by unconditional release in terms of the order of competent authority. First order was passed in the year 1992 when Item No. 2 in the seizure list was directed to be released unconditionally and the sale has been held in the year of 1997. In any view of the matter, goods bearing Item No. 2 should have been released immediately as the Customs Authorities have no jurisdiction or authority to sell same. The seized value of the goods in this case so far as Item No. 2 is concerned shall be the value and this should have been paid by the Department concerned without any hesitation. Next question remains with regard to Item Nos. 1 and 3 which were ultimately held to be returned. Upon reading of the aforesaid Section, in my view, the goods which are not liable to be confiscated and remaining in the custody of the Customs Authorities, may be sold but this shall be done by and under the procedure provided in the said Section itself. The Customs Authorities have not come forward with any explanation in the affidavit as to how the sale took place; whether the sale was undertaken by public auction or otherwise; whether the goods were valued properly or not are not explained. Fair procedure in the action of the Government ensures the legitimacy of any order, and it is in my view, part and parcel of Article 14 of the Constitution of India. In my view, in absence of any such explanation and elucidation as regard sale having taken place, the entire action of the Department concerned for holding sale of Item Nos. 1 and 3 are absolutely improper and void and therefore the price which is said to have been fetched from the so-called sale cannot be accepted to be the price of the goods of Item Nos. 1 and 3, for the simple reason it is unconstitutional as being without authority of law. The Delhi High Court decision as above is very useful guidance in this regard. Thus, I set aside and quash all the orders refusing to pay the seizure value of the goods. In the event the aforesaid payment is made within two months from the date of communication of this order, then there will be no liability for payment of interest. If the respondents fail to pay within the time as above, then the petitioner would be entitled to interest at the rate of 6% per annum on the said amount of Rs. 1,38,233/- until realisation. The petitioner is entitled to costs assessed at 200 gms. to be paid by the respondents and such payment of costs shall be made together with the payment, as aforesaid. The writ petition is, thus disposed of.

Summary

Issues involved: Realization of seizure value of goods under Section 110 of the Customs Act.

Summary:
The petitioner sought realization of the seizure value of goods ceased under Section 110 of the Customs Act. The department confiscated two items but allowed redemption of one upon payment of penalty. Despite payment, the goods were not returned as they were sold by the department. The petitioner appealed against the refusal to pay the seizure value, which was denied. The main issue was whether the seizure value or the value fetched by sale should be paid to the petitioner.

The Court noted that the goods were seized and valued at the time of seizure, which was higher than the sale value. The Customs Act provides a procedure for the sale of goods not confiscated. The Court held that until the proceedings concluded, the goods should have been held by the department as a trustee for return to the petitioner. The department failed to explain the sale procedure, rendering the sale of certain items improper and void. The petitioner was entitled to the declared seizure value of the goods.

The Court directed the department to pay the petitioner the sum of Rs. 1,38,233, being the seizure value of the goods. All orders refusing to pay the seizure value were set aside and quashed. If payment was not made within two months, the petitioner would be entitled to interest at 6% per annum. The respondents were also ordered to pay costs assessed at 200 gms. The writ petition was disposed of, with parties to receive signed copies after requisition.