2024 (3) TMI 296 - HC - Customs

Smuggling - confiscation - fine - penalty - security towards the redemption fine - Seeking release of gold bars - offence punishable u/s 2(33) - HELD THAT - In the present case, the first appellant had given an option to be exercised by the respondent by issuing a show cause notice dated 16.08.2022. Even though the respondent sent a reply dated 02.09.2022, without waiting for the conclusion of adjudication proceedings, he has filed the present writ petition, which was also erroneously allowed by the learned Judge, by order impugned herein. In view of the limited relief now sought by the learned counsel on either side and also considering the fact that the learned Judge, following the earlier orders passed in the writ petitions referred to above, and without examining the order-in-original passed by the adjudicating authority, has partly set aside the same, when the writ petition was filed only for a mandamus to release of the gold seized, this court, without going into the merits of the case, sets aside the order dated 23.08.2023 passed by the learned Judge in Writ Petition No. 29618 of 2022 and remands the matter to the learned Judge for considering the issue afresh, on merits and in accordance with law. We request the learned Judge to take up the writ petition and pass appropriate orders, as expeditiously as possible. In the mean while, the respondent / writ petitioner is directed to file a miscellaneous petition to amend the prayer made in the writ petition. Accordingly, this writ appeal stands disposed of.

Summary

Issues Involved:
The issues involved in this case include a writ petition for a Mandamus to direct the release of seized gold bars, the legality of the seizure under the Customs Act, the authority to confiscate goods, the discretion of the adjudicating authority, and the proper procedure for handling confiscated goods pending adjudication.

Writ Petition for Mandamus:
The respondent filed a writ petition seeking a Mandamus to direct the release of 795 grams of gold bars seized by the customs authorities. The respondent claimed he possessed the gold bars legally and was willing to produce the purchase bill. However, the customs authorities contended that the gold bars were smuggled and subject to confiscation under the Customs Act.

Legal Basis for Seizure:
The customs authorities justified the seizure of the gold bars based on the respondent's failure to possess required documents or permits at the time of search. They asserted that the respondent had smuggled the gold bars into Chennai from Colombo and committed an offense under the Customs Act. The authorities valued the seized gold bars at Rs. 36,18,045 and indicated that confiscation was pending adjudication.

Adjudication Proceedings and Relief Granted:
The learned Judge allowed the writ petition and directed the respondent to deposit customs duty and penalty for the release of the gold bars. The Judge referenced previous cases where confiscated goods were released upon payment of duties and penalties. The customs authorities were instructed to conduct de-novo proceedings and determine the redemption fine within three months.

Appeal Against the Order:
The appellants appealed the decision, arguing that the relief granted exceeded the scope of the writ petition. They contended that the respondent should have awaited the outcome of adjudication proceedings before seeking relief. The appellants emphasized the discretionary powers of the adjudicating authority under the Customs Act.

Appellants' Arguments and Prayer for Relief:
The Senior Panel Counsel for the appellants argued that the order relied upon by the Judge was not applicable to the present case. They highlighted the difference between personal belongings and smuggled goods, urging the Court to set aside the Judge's order and deny the release of the gold bars to the respondent.

Response from Respondent's Counsel:
The respondent's counsel defended the Judge's decision, stating that returning the gold bars upon payment of duties and penalties would secure the department's interest without causing prejudice. They contended that in certain cases, confiscation may be replaced by payment of duties and penalties, and no interference with the Judge's order was necessary.

Remand and Disposition:
Ultimately, the Court set aside the Judge's order and remanded the matter for fresh consideration, emphasizing the need to examine the issue on merits and in accordance with the law. The Court directed the Judge to reconsider the case expeditiously and allowed the respondent to amend the prayer in the writ petition. The writ appeal was disposed of without costs.