2025 (2) TMI 1122 - HC - Customs

Smuggling of Gold - Entitlement to additional compensation from the Respondent after the confiscation and subsequent release of gold weighing 755.50 grams - applicability of Instruction No. 22/2022-Customs - HELD THAT - Clause 3.1.1 of the Instructions provide for the determination of the value of the gold at the time of seizure by recording the average market price per 10 gms. based on the price reported in three National Economic Dailies. Clause 3.1.2(i) of the Instructions states that where the seizure is made in the customs area the calculations shall be based on the value of gold on the date of such seizure. Concededly and in terms of the orders passed by this Court the Petitioner has received the value of confiscated gold. The grievance of the Petitioner is that he has paid Rs. 3.14 lakhs approximately in excess in view of the difference in the value of customs duty. However what the Petitioner has not taken into account is that the Petitioner has received an additional amount. Since the difference in the rate of gold in these 10 years was approximately Rs. 370/- for 10 gms. the value for 755.50 gms. of gold would be approximately Rs. 2.8 lakhs. Given this fact the contention that the Petitioner recovered 3.14 lakhs less is incorrect. Conclusion - The Petitioner had already received the value of the confiscated gold and that the additional compensation claimed was not justified based on the valuation and customs duty calculations. The prayers in the present Petition stands satisfied in view of the fact that the payment for the seized gold has already been received by the Petitioner. Petition disposed off.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the Petitioner is entitled to additional compensation from the Respondent after the confiscation and subsequent release of gold weighing 755.50 grams.2. Whether the calculation of customs duty charged by the Respondent was done correctly and in accordance with the law.3. Whether the Petitioner's claim for an additional sum of Rs. 3,14,255/- is valid based on the valuation of the gold and customs duty at different dates.Issue-wise detailed analysis:Issue 1:- The Petitioner sought a writ of mandamus to compel the Respondent to comply with its order allowing the release of confiscated gold and to investigate illegalities.- The Petitioner was apprehended with 755.50 grams of gold in the form of stapler pins and the gold was confiscated under the Customs Act, 1962.- A penalty was imposed on the Petitioner, which was later challenged and the Petitioner was allowed to redeem the gold upon payment of a fine and penalty.- The Petitioner deposited the redemption fine but the gold was not released, leading to the present petition.- The Respondent initiated an inquiry as the seized gold was not traceable and a payment was made to the Petitioner as directed by the Court.Issue 2:- The Petitioner argued that the customs duty should be calculated based on the date of seizure, not the date of payment.- The Respondent contended that the prayers in the petition were already satisfied by the refund made to the Petitioner.- The Respondent relied on Instructions No. 22/2022-Customs for the valuation of the gold and customs duty calculation.- A judgment in Mohammad Zaid Salim v. Commissioner of Customs was cited to support the Respondent's position on valuation.Issue 3:- The Petitioner claimed an additional sum based on a calculation chart, arguing that the customs duty should be calculated at the date of seizure.- The Respondent argued that the Petitioner had already received an enhanced amount based on the value of gold in 2023.- The Respondent relied on Instructions No. 22/2022-Customs to support their calculation method.- The Court found that the Petitioner had received the value of the confiscated gold and the petition was disposed of.Significant holdings:- The Court found that the Petitioner's prayers were satisfied by the payment received and disposed of the petition.- The Petitioner was granted liberty to take further legal steps for recovery of any additional amounts due.In conclusion, the Court ruled in favor of the Respondent, finding that the Petitioner had already received the value of the confiscated gold and that the additional compensation claimed was not justified based on the valuation and customs duty calculations. The judgment emphasized the importance of following legal procedures and instructions in determining such financial matters.