2021 (10) TMI 943 - HC - Customs

Seeking appropriate direction for encashment of the fixed deposits made in respect of the sale proceeds received by selling the unclaimed/uncleared goods at the bonded warehouse - Also, seeking handing over the residual amount after adjusting the Customs duty payable in respect of the items sold - HELD THAT - The application along with the writ petition can be disposed of if the concerned office who can look into the issue of the computation of the Customs duty to be adjusted from the sale proceeds in terms of provisions of Section 150(2)(c). The matter according to the applicants/writ petitioners can also be referred to the Chief Commissioner of Customs, being the overall head so that any one representing the Customs Authority will be subordinate to him - Let this matter appear on next Friday (5-3-2021) when the department shall inform this Court about the competent authority to whom the matter can be relegated for the purpose of computation of Customs duty in terms of provisions of Section 150(2)(c) of the said Act. Petition disposed off.

Summary

Issues:
Application for encashment of fixed deposits from sale proceeds at a bonded warehouse and adjustment of Customs duty.

Analysis:
The applicants, operating a bonded warehouse, sought direction for encashment of fixed deposits from the sale proceeds of unclaimed goods and adjustment of Customs duty as per Section 150 of the Customs Act, 1962. They had obtained court orders for the sale of such goods, and the sale proceeds were kept in fixed deposits with Customs Authorities. The priority of payment from the sale proceeds was outlined in Section 150(2) of the Act.

The applicants had already made payments for expenses related to the sale and were now looking to settle the duty payable on the goods sold. They referred to a judgment emphasizing that Customs duty should be calculated on the sale price, not based on the duty payable at the expiration of the warehouse period. The applicants were entitled to any residual amount after adjusting the duty, which could be used to satisfy their dues.

The respondents argued that the computation of Customs duty should be handled by the competent authority, as per the precedent cited by the applicants. It was suggested that the issue of computation might require factual considerations beyond the court's writ jurisdiction. The court acknowledged the need for the competent authority to determine the duty adjustment in line with the precedent cited.

It was decided that the matter should be referred to the Deputy Commissioner of Customs, Special Disposal Cell, as the competent authority for computing the Customs duty. However, concerns were raised about potential bias if the Deputy Commissioner was to judge his own cause. The applicants proposed referring the matter to the Chief Commissioner of Customs to ensure impartiality. The court scheduled the next hearing for the department to confirm the competent authority for the duty computation as per Section 150(2)(c) of the Act.

In conclusion, the application for urgent hearing was disposed of, pending further clarification on the competent authority for computing the Customs duty from the sale proceeds in accordance with the provisions of the Customs Act.