2013 (2) TMI 118 - HC - Customs

Confiscation of the gold and gold ornaments - representation of the Petitioner rejected for the return of the sale proceeds of the gold after adjusting the outstanding government dues - Held that - By his letters dated 18 February 2009 and 8 December 2009 the Petitioner referred to the enormous delay on his part in paying the redemption fine and penalty and admitted that due to a severe financial crunch, he was unable to pay the fine and penalty. The contents of these letters clearly belie what is sought to be stated in the alleged letters dated 28 April 1993 and 14 October 2002 that the Petitioner was ready and willing to pay the redemption fine and penalty. After the final order of the Tribunal, the Petitioner took no steps whatsoever until 2009 when he addressed a communication to the Respondents. On this state of the record, it is apparent that the Petitioner was himself to blame in not paying the redemption fine within a reasonable period. A period of nearly 18 years elapsed before the Petition was filed and this can by no stretch of imagination be regarded as a reasonable period. The option of redemption was granted to the Petitioner which he failed to exercise. The gold having vested absolutely in the Union Government, no fault can be found in the action that was pursued of selling the confiscated property. The prayer for the return of the gold ornaments or in the alternative, for the payment of the sale proceeds cannot be acceded to.

Summary

Issues:
1. Challenge to order of confiscation of gold ornaments and personal penalty imposed by Collector of Customs.
2. Challenge to communication rejecting representation for return of sale proceeds of gold.
3. Request for return of gold ornaments or payment of sale proceeds with interest.

Issue 1:
The petitioner challenged the order of confiscation of gold ornaments and imposition of a personal penalty by the Collector of Customs. The Tribunal reduced the redemption fine and personal penalty, noting that the confiscation was not seriously challenged. The petitioner failed to pay the redemption fine despite multiple opportunities granted by the Tribunal over nearly 15 years. The Revenue argued that the gold vested with the government upon confiscation, and after the petitioner's failure to pay the fine, the gold was sold in 2006. The petitioner claimed readiness to pay the redemption fine, but the Revenue disputed the existence of acknowledged letters supporting this claim. The court found that the petitioner's delay in payment over 18 years was unreasonable, especially considering the lack of action even after the Income Tax proceedings concluded. As the gold vested with the government and the petitioner failed to exercise the redemption option, the court dismissed the challenge to the order of confiscation and penalty.

Issue 2:
The petitioner sought to challenge a communication rejecting their representation for the return of sale proceeds of the gold. The Assistant Commissioner rejected the request, stating that the petitioner had multiple opportunities to redeem the gold but failed to do so, leading to its disposal. The court upheld the Revenue's decision, emphasizing that the gold's ownership vested with the government upon confiscation, and the petitioner's failure to pay the redemption fine resulted in the sale of the gold. The court found no fault in the Revenue's actions and dismissed the petitioner's plea for the return of sale proceeds with interest.

Issue 3:
In addition to challenging the communication rejecting the representation for the return of sale proceeds, the petitioner also requested the return of gold ornaments or payment of sale proceeds with interest. The court, considering the petitioner's prolonged delay in payment and failure to act despite multiple notices, concluded that the petitioner was at fault for not paying the redemption fine within a reasonable period. As the gold vested with the government and the petitioner did not exercise the redemption option, the court denied the prayer for the return of gold ornaments or sale proceeds. The court found no merit in the petition and dismissed it accordingly.