2023 (12) TMI 919 - HC - Customs

Prayer for direction upon the respondent customs authority concerned to pay to the petitioner value of goods in question as on the date of seizure - seizure was on the ground of foreign origin and that it was smuggled in nature - HELD THAT - Considering the facts and circumstances of the case and submission of the parties and in view of the order of the appellate authority dated 1st March, 2021 holding that the adjudication order confiscating the goods in question and imposition of penalty not sustainable in law, action of respondents customs authority neither returning the seized goods in question to the petitioner nor paying the value of goods as on the date of the seizure is arbitrary and illegal and accordingly the respondent customs authority concerned is directed to pay to the petitioner the value of goods in question as on the date of seizure within a period of four weeks from the date of communication of this order. Petition disposed off.

Summary

Issues involved:
The issues involved in this case are related to the confiscation of goods by customs authority, the imposition of penalty, the appeal process, and the obligation of customs authority to pay the value of seized goods.

Confiscation of Goods and Imposition of Penalty:
The petitioner filed a writ petition seeking direction for the customs authority to pay the value of goods seized on the grounds of being of foreign origin and smuggled nature. The adjudicating authority had initially held the goods to be of smuggled nature, but this decision was set aside by the Commissioner of Customs (Appeals). The appellate authority specifically noted the lack of evidence to establish the foreign origin and smuggled nature of the goods, leading to the conclusion that confiscation and penalty were not justified under Section 111(b) & (d) and Section 112(a) & (b) of the Customs Act, 1962. The appellate order set aside the adjudication order, emphasizing the unsustainability of the decision based on presumption and assumption.

Appeal Process and Customs Authority's Obligation:
The respondent customs authority failed to challenge the appellate authority's order at a higher forum, despite the order setting aside the adjudication decision on confiscation and penalty. The respondent argued that due to the hazardous nature of the goods, which were not fit for human consumption, they were destroyed and thus not liable to be returned or compensated. However, the court found this argument unsustainable, labeling it as unreasonable and arbitrary. The court directed the customs authority to pay the petitioner the value of the goods seized as on the date of seizure within four weeks, as the action of the customs authority in not returning the goods or compensating the petitioner was deemed arbitrary and illegal. The court did not grant any interest to the petitioner in this case.

This judgment highlights the importance of evidence in confiscation cases, the role of appellate authorities in reviewing decisions, and the obligation of customs authorities to comply with appellate orders regarding the return or compensation for seized goods.