2015 (1) TMI 261 - AT - Customs

Claim of sale proceeds since since the confiscated goods were sold through e-auction by the department - confiscated goods were not redeemed by the appellant despite an option was given - Held that - Goods were confiscated by Commissioner of Customs on 05.5.2003 and option was given to the appellant to redeem the same on payment of Redemption fine of ₹ 20 Lakh within 15 days. The redemption fine so imposed by the adjudicating authority was reduced to ₹ 7.5 Lakh as a result of CESTAT s order. In spite of the above modification, appellant did not redeem the goods. Auction of the goods was done after 07.10.2006 after giving a notice to the appellants. The goods confiscated by the Adjudicating authority were not redeemed, within the stipulated time either after Adjudication order or its modification by CESTAT. As per Section 126 of the Customs Act, 1962, the title of the confiscated goods vests with the Central Government and appellant had no claim on such goods and its sale proceeds - Appellant could have a valid claim on the remaining sale proceeds only if he had contested the confiscation of goods in appeal to higher courts and got a favourable verdict. In the absence of any such contest and also not taking redemption of the goods, appellant has no case and the order passed by the first appellate authority is required to be upheld. - Decided against assesse.

Summary

Issues:
- Appeal against OIA No. 352/2013/CUS/COMMR-A/KDL
- Confiscation of goods and duty payment
- Reduction of fine and penalty amounts
- Refund claim rejection on jurisdictional grounds
- Auction of confiscated goods and sale proceeds

Analysis:

The appellant, a 100% EOU, imported synthetic fabrics at Kandla Port, which were seized in transit for containing excess quantity. The Commissioner of Customs, Kandla, adjudicated the case, confiscating the goods, imposing fines and penalties. The Tribunal confirmed duty payment but reduced fine and penalty amounts. However, a mistake in reducing penalties led to a High Court remand for rectification. The appellant withdrew an appeal challenging the Tribunal's order, which attained finality. The confiscated goods were auctioned, and sale proceeds realized.

Regarding the refund claim, the appellant sought refunds of duty paid and sale proceeds. The Assistant Commissioner and Commissioner (Appeals) rejected the refund claim on jurisdictional grounds. The appellant filed multiple refund claims with different authorities, all of which were rejected as time-barred or misplaced. The first appellate authority also ruled against the appellant.

During the hearing, the appellant's advocate argued for a refund of the auctioned goods' sale proceeds. The Revenue representative contended that post-confiscation, goods belong to the Central Government, and the appellant lost the redemption option by not acting within the stipulated period. The Tribunal observed that despite modifications in redemption fines, the appellant failed to redeem the goods. As per Section 126 of the Customs Act, the confiscated goods' title vests in the Central Government, and the appellant had no claim on the goods or sale proceeds without contesting the confiscation.

Ultimately, the Tribunal rejected the appeal, upholding the first appellate authority's decision. The appellant's failure to contest the confiscation or redeem the goods precluded any claim on the sale proceeds. The order pronounced in court upheld the rejection of the appeal, emphasizing the lack of a valid case for the appellant.