9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (3) TMI 861 - HC - CustomsCompensation of respondent for the seized betel nuts that were destroyed while in their custody - illegal importation of betel nuts - onus of proof - HELD THAT - First of all there is clear admission by the appellant that as on the date of seizure the value of the goods was 88 lakhs. From the date of seizure up to the date of dumping of the goods in the pit about one and a half years had elapsed. These goods were in the custody of the Customs. They had an obligation to explain how the goods were or became unfit for human consumption. If the goods at the time of seizure were unfit for human consumption they could not have been valued at 88 lakhs at that point of time. Therefore this condition was reached in the custody of the Customs. Whether such deterioration was natural or due to some action or inaction on the part of the Customs had to be explained by the Customs authorities. The onus of proof was upon them. They have not been able to discharge it. Even if the reports of the expert agencies like food analyst and the specialised laboratory made between December 2017 and March 2018 suggested that the goods were unfit for human consumption still the respondent ought to have been given a chance to be present when the test was carried out or to be provided with a copy of the report to seek second opinion or to take some steps with regard to it. Conclusion - i) The Customs authorities are liable for the deterioration of goods in their custody if they fail to provide a satisfactory explanation for the condition of the goods. ii) Valuation of goods at the time of seizure is binding unless there is evidence of a grave error or miscarriage of justice. iii) Authorities have a duty to inform the owners of goods before taking irreversible actions such as destruction especially when the ownership and legality of the goods are contested. The Customs authorities were directed to comply with the order to pay the respondent within four weeks - Appeal dismissed.
ISSUES PRESENTED and CONSIDERED
The primary issues considered in this appeal were:
ISSUE-WISE DETAILED ANALYSIS 1. Liability of Customs Authorities for Compensation The relevant legal framework is governed by the Customs Act, 1962, particularly Section 124 which deals with confiscation and penalties. The Court examined whether the Customs authorities were justified in destroying the goods and if they were liable to compensate the respondent for the loss. The Court found that the Customs authorities admitted the value of the goods at 88 lakhs at the time of seizure. The goods were in their custody for over a year and a half, during which they became unfit for consumption. The Court determined that the Customs authorities had the onus to explain the deterioration of the goods while in their custody, which they failed to do. This failure established their liability to compensate the respondent. 2. Valuation and Compensation The valuation of the goods at 88 lakhs was not contested by the Customs authorities, and the respondent agreed to accept 60 lakhs as compensation. The Court noted that there was no evidence of a grave error or miscarriage of justice regarding the valuation. The respondent's agreement to accept 60 lakhs was considered reasonable, and the Court upheld this compensation amount. 3. Duty to Inform Before Destruction The Court emphasized that the Customs authorities had a duty to inform the respondent before destroying the goods. The respondent was not given an opportunity to be present during the testing of the goods or to contest the findings of unfitness for consumption. The failure to notify the respondent before destruction was a breach of duty, further supporting the respondent's claim for compensation. SIGNIFICANT HOLDINGS The Court upheld the decision of the learned single judge, affirming the order for the Customs authorities to pay 60 lakhs to the respondent. The Court found no infirmity in the judgment and emphasized the following principles:
The appeal was dismissed, and the Customs authorities were directed to comply with the order to pay the respondent within four weeks.
|
