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TMI Blog2011 (5) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the respondents, on the earlier dates of hearing, the Ld. Counsel for the respondents relied upon the decision of the Hon'ble Bombay High Court in the case of Shabir Ahmed Abdul Rehman v. UOI - 2009 (235) E.L.T. 402 (Bom.) to contend that only the fine and penalty amounts can be deducted from the sale proceeds of disposed, gold and the duty thereby would not be deducted there from. We find that the operation of the Hon'ble Bombay High Court judgment has been stayed by the Hon'ble Supreme Court vide Order dated 13-5-2009 in SLP No. CC6571/09 [2010 (253) E.L.T. A142 (S.C.)]. Therefore, the Hon'ble Bombay High Court judgment cited by the Ld. Counsel for the respondents is not required to be followed. On the other hand, there is a decision of the Tribunal in the case of Shri K.N. Thiyagarajan - Misc. Order No. 384/07, dated 4-5-2007 [2007 (216) E.L.T. 165 (T)] wherein the Tribunal has directed the Commissioner, to return the balance amount of sale proceeds of the confiscated gold after realization of fine and penalty as well as duty. Similar order bearing Misc No. 568/07 dated 26-6-2007 has been passed by the Tribunal in the case of K. Balulchamy v. CC, Trichy [2007 (216) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne the scheme of levy of customs duty on imported goods. In subsequent sections, the Act deals with two other situations, (i) where the goods are left uncleared and (ii) where the goods are confiscated. 9. The goods which are not cleared from customs control after importation are required to be sold. Section 150(2) provides how the sale proceeds has to be allocated. It reads as follows :- "150 (2). The proceeds of any such sale shall be applied- (a) firstly to the payment of the expenses of sale, (b) next to the payment of the freight and other charges, if any, payable in respect of the goods sold, to the carrier, if notice of such charges has been given to the person having custody of the goods, (c) next to the payment of the duty, if any, on the goods sold, (d) next to the payment of the charges in respect of the goods sold due to the person having the custody of the goods. (e) next to the payment of any amount due from the owner of the goods to the Central Government under the provisions of this Act or any other law relating to customs, and the bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng duty on goods which enter the domestic territory of India irrespective of whether the goods are cleared for home consumption after regular assessment, or whether the goods remain uncleared and are subsequently sold by auction, or whether the goods are confiscated for any infraction and are subsequently disposed by the customs authorities by sale. Even jetsam and flotsam which come floating to the Indian shore have to be charged to duty as stipulated under Section 21 of the Customs Act. Once the scheme of Customs Law as enacted by the Parliament is understood, it becomes clear that Customs duty requires to be collected and paid to the public exchequer, on imported goods, whether the same is cleared after regular assessment, or is sold in auction after lying uncleared, or is sold after being confiscated, or is released on redemption fine after being confiscated. 13. Section 125(2) unequivocally states that where any fine in lieu of confiscation of goods is imposed, the. owner of such goods or the person from whose custody such goods have been seized, shall, in addition, be liable to duty in respect of such goods. 14. The question came up before the Hon'ble Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble Bombay High Court in the case of Shabir Ahmed (supra), was cited by the Ld. Advocate for the respondents on an earlier date of hearing without bringing it to the notice of the Bench that the refund of the sale proceeds without deducting duty there from ordered under the said decision has been subsequently stayed by the Hon'ble Supreme Court vide UOI v. Shabir Ahmed Abdul Rehman - 2010 (253) E.L.T. A142 (S.C.). The decision of the Hon'ble Bombay High Court in Shabir Ahmed (supra) has been rendered without taking note of the precedent decisions of the same High Court in the case of Wockhardt Hospital (supra) and Bombay Hospital Trust (supra). It is further seen that in Shabir Ahmed (supra) the Hon'ble High Court has observed that "as regards payment of duty is concerned, in our opinion, duty would be payable only if the gold was actually allowed to be redeemed". As such, this opinion of the Hon'ble High Court rendered in a particular case without any reference to any provision of law is contrary to the precedent decisions of the same High Court referred to in paragraphs 14, 15, and 16 above which have interpreted the provisions of Section 125 and have held that duty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents are recompensing the State and the fact that the fine can at the most be equal to the market price less the duty means they can only get the sale proceeds minus the duty by paying the fine. 21. After all, the sale price is only the cum-duty price. If the duty element from the sale proceeds is also given to the respondents, they would be unjustly enriched as they would be refunded the duty which they have not paid. Section 27 of the Act allows refund of duty which is paid by a person or which is borne by a person. In the instant case, the respondents have neither paid the duty nor have borne the duty and therefore, the duty portion cannot be refunded to them, which has been recovered as a part of the sale proceeds. The impugned imported goods have gone into home consumption subsequent to sale, and there is no reason why the exchequer should not retain the duty portion. 22. It is also to be noted that in this case, the impugned goods were seized on 21-11-1997 and the same were disposed of on 16-3-1998, as per law following Notification No. 31/86-Customs dated 5-2-1986, (which listed the impugned goods against Sl. No. 4A to the schedule annexed as a specified it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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