2005 (8) TMI 254 - AT - Customs

Summary

Issues:
- Appeal against Order-in-Appeal passed by the Commissioner (Appeals)
- Seizure of silk yarn by Customs Authority
- Confiscation of goods and subsequent auction
- Claim for interest on sale proceeds returned to the appellant

Analysis:
The appellant filed an appeal against the Order-in-Appeal passed by the Commissioner (Appeals) regarding the seizure of silk yarn by the Customs Authority on the grounds of smuggling. The silk yarn, valued at Rs. 4,05,000/-, was confiscated by the adjudicating authority. Subsequently, the seized silk yarn, being perishable, was auctioned for Rs. 3,24,000/-. The Commissioner (Appeals) set aside the confiscation, and the sale proceeds were returned to the appellant. The appellant then sought interest on the sale proceeds in the present proceedings.

The main contention of the appellant was that they were entitled to interest on the amount returned to them as the sale proceeds were retained by the custom authorities and later returned after the seizure was set aside. However, upon inquiry, the appellant failed to demonstrate any provision under the Customs Act that entitles them to interest on the refund of sale proceeds. Citing the decision of the Hon'ble Supreme Court in the case of Miles India Ltd. v. Assistant Collector of Customs, it was emphasized that authorities created by a statute are governed by the provisions of the statute. In this case, since there were no provisions regarding interest on sale proceeds or confiscated goods, the Tribunal found no basis for granting interest. Therefore, the appeal was dismissed.

In conclusion, the Tribunal held that in the absence of specific provisions in the Customs Act for interest on refund of sale proceeds, the appellant's claim for interest was not sustainable. The decision was based on the principle that statutory authorities are bound by the provisions of the statute governing them, and since no such provision existed in this case, the appeal for interest was rejected.