2021 (2) TMI 375 - HC - Customs

Validity of confiscation proceedings and subsequent sale - power to pass an order for restitution of the amount of value of goods which was illegally confiscated - Section 129B of Customs Act - HELD THAT - The Tribunal has not considered the issue with regard to the validity of the confiscation of the goods and the consequent sale. The order passed by the Tribunal is cryptic and suffers from the vice of non-application of mind inasmuch as the Tribunal had not adverted to the rival submission made by the learned counsel for the parties. In fact situation of the case, we deem it appropriate to quash the impugned order passed by the Tribunal and remit the matter to the Tribunal to decide the issue afresh. The tribunal shall specifically advert to the issue of validity of the confiscation proceedings and the consequent sale by the respondent and thereupon, shall decide the issue with regard to restitution of value of goods to the appellant. The Tribunal is directed to decide the appeal within a period of two months from the date of receipt of certificate copy of the order passed today - Appeal disposed off.

Summary

Issues:
- Appeal under Section 130 of the Customs Tax Act, 1962 against an order by the Customs, Excise and Service Tax Appellate Tribunal.
- Confiscation of imported goods due to alleged mis-declaration and subsequent sale without notice to the appellant.
- Allegations of non-compliance with court orders and failure to release goods.
- Appellant's contention for restitution of illegally confiscated goods and the power of the Tribunal under Section 129B of the Act.

Analysis:
1. The appellant, engaged in import and export of earth moving equipment, imported machinery parts from the USA. Customs officers seized the goods alleging mis-declaration and failure to produce a country of origin certificate. Despite a court order for provisional release upon payment of duty, the Department determined a duty liability and asked for a provisional duty bond. No specific order was passed for releasing the seized goods, leading to a delay.
2. The Commissioner of Customs rejected the declared invoice value, enhanced the transaction value by 50%, confiscated the goods, and imposed a penalty. The appellant appealed to the Appellate Tribunal, which remitted the matter for re-consideration on the issue of the country of origin. The Commissioner upheld the earlier order, increasing the penalty. The Tribunal dismissed the appeal stating it had no power to order compensation under appellate jurisdiction.
3. The appellant argued that the Tribunal failed to consider the invalidity of confiscation proceedings and subsequent sale. Citing legal precedents, the appellant contended that the Tribunal had the power to order restitution of illegally confiscated goods. The respondent supported the Tribunal's decision upholding the confiscation and sale of goods.
4. The High Court observed that the Tribunal's order lacked consideration of the validity of confiscation and sale. Finding the order cryptic and lacking application of mind, the Court quashed it and remitted the matter to the Tribunal for fresh consideration. The Tribunal was directed to specifically address the validity of confiscation proceedings and the subsequent sale, deciding on the restitution of goods to the appellant within two months.
5. In conclusion, the appeal was disposed of, emphasizing the need for the Tribunal to re-examine the issues in light of legal precedents and the appellant's contentions, ensuring a fair decision within a specified timeframe.