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TMI Blog2013 (7) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ter noting that by an order dated 30th October 2000 the Board for Industrial and Financial Reconstruction ('BIFR') had held YMIL to be a sick industrial company that was not likely to become viable in future. The BIFR held that it was in public interest that YMIL should be wound up under Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1995. This Court appointed the Official Liquidator ('OL') as the Liquidator of YMIL. 4. After a report of valuation of the assets of YMIL was made available and after noting that there was no objection on behalf of the Noida Special Economic Zone ('NSEZ') to the sale of its assets, bids were invited by the OL. In the order dated 16th November 2006 it was noticed that two bids had been received one of which was by Mr. Vilas Gupta. He was permitted to inspect the premises. The order dated 24th November 2006 noted that Mr. Vilas Gupta was ready and willing to offer Rs.1,35,50,000 for the assets of YMIL. 5. On 7th December 2006, the following order was passed: "1. Learned counsel appearing for M/s. Hanung Dyes and Textitles Ltd. states that his client is withdrawing his offer for Rs.1.34 crores. EMD giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 18th June 1999 the Central Excise and Gold Appellate Tribunal, New Delhi upheld the order of the Commissioner of Customs. It is submitted by the Customs Department that despite the capital goods and raw materials of YMIL vesting in the Central Government, the OL sold them by way of auction sale which was confirmed by the Court on 7th December 2006 by accepting the highest bid of Rs.1,35,50,000. Pursuant to the above order, possession of the goods in question was given by the OL to the auction purchaser Mr. Vilas Gupta on 7th February 2007. 8. The Customs Department submitted its claims to the OL followed by submission of proof of debt on 14th January, 13th July, 3rd September and 10th October 2007. On 15th November 2007 the Deputy OL admitted the Applicant's claim to the extent of Rs.2,19,55,000 towards customs and central excise duty in addition to penalty of Rs.10 lakhs. The Applicant Customs Department submits that the Deputy OL overlooked the claim for interest on the duty amounting to Rs.4,73,15,816. 9. The Customs Department filed C.A. No. 1016 of 2008 seeking stay of the auction sale of the assets of YMIL. Mr. Vilas Gupta, the auction purchaser filed a reply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion', 7 items of 'capital goods'. In another column, the details of the corresponding bills of entry (B/E No.) were indicated. The column titled 'Quantity' was left blank. The last two columns gave the 'value' and the 'duty invoice'. There were six items of 'raw materials'. Four were described as 'glass' and last two as 'Mercury' and 'Top Ring'. The B/E No., the quantities as well as the value and duty invoices were mentioned. Some of the packing lists and invoices dated 1990 and 1991 have also been enclosed. The confiscation of the capital goods and raw materials is supposed to have taken place sometime in 1997. However, it cannot be discerned from the above documents, whether the capital goods confiscated tally with the 'plant and machinery' sold to the auction purchaser on 'as is where is basis'. In the circumstances, the Court directed the Customs Department to produce the inventory of the goods confiscated. 12. On 9th January 2012 the following order was passed by this Court: "The Customs Department is directed to file an affidavit enclosing photocopies of the Bills of Exchange mentioned in annexure to Show Cause Notice dated 17th July 1996 issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: "As regards copy of inventory of the goods, at the time of confiscation, the same is not available in the relevant file. However, the demand was worked out on the basis of records available with the Customs, namely Bills of Entry etc. as reflected in the Annexure to the show cause notice. The order of confiscation was passed vide Orderin- Original No. 44/97 dated 4th November 1997. 4. As regards the details of the goods stated to have been handed over by them to the Official Liquidator subsequent to confirmation of auction, it is submitted that no goods were handed over by the department of Customs to the Official Liquidator subsequent to confirmation of auction by this Hon'ble Court. 5. It is respectfully submitted that details of the goods stated to have been handed over by them to the Official Liquidator should also be available with the Official Liquidator. 6. As regards the possession memo, "prepared jointly by the Custom Department and Official Liquidator" it is respectfully submitted that there is no such possession memo. A copy of possession memo dated 7th February 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rior intimation was given to the Customs Department. It is submitted that the sale of the goods and its confirmation was carried out by concealment of material facts. Reliance is placed on the decisions in Union of India v. Somasundaram Mills (P) Ltd. AIR 1985 SC 407, United Bank of India v. Official Liquidator (1994) 1 SCC 575, Collector of Customs v. Dytron (India) Ltd. 1999 (108) ELT 342 (Cal), M/s. Jainsons Exports India v. Binatone Electronics Ltd. AIR 1996 Del 105 and the decision dated 28th July 2005 in CA Nos. 930-93 of 2004 in Co. Pet No. 381 of 19998 (Singapore Tong Tek P Ltd. v. Digiflex India Ltd.). 17. Counsel for the auction purchaser on the other hand submitted that in the absence of the inventory of the goods confiscated, it would be difficult for the Court to conclude that the goods sold to the auction purchaser were in fact those confiscated by the Customs Department. The present value of the plant and machinery had further depreciated and it was of no use to even the auction purchaser. He had set up an arc welding unit and needed the money from the further sale of the purchased plant and machinery for that purpose. He submitted that there was no response from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that the goods which have been sold by auction sale in 2007 were in fact the very goods that were confiscated by the Customs Department in 1997. 20. In the cases cited by Mr. Aggarwala there was no doubt as to the identity of the goods confiscated by the Customs Department. There was also no doubt that those were the very goods sold to the auction purchaser. In the present case, it is not possible to speculate at this stage why the Customs Department failed to take steps to clearly segregate/isolate and distinctly mark the goods seized so that the OL could clearly identify them. The laxity of the Customs Department has led to a situation where the auction purchaser was only given to understand in the auction notice that 'plant and machinery' and building of YMIL were on offer for sale. The time period between the date of import of the goods i.e. 1990/1991, their subsequent seizure in 1997 and their sale ultimately in 2006 ensured that the goods suffered depreciation. Their present value is nowhere near the import value. For some reasons the Customs Department was not vigilant in ensuring that the OL was kept informed that the goods had been confiscated by it. Also, from the auct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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