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TMI Blog2013 (9) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... goods had been confiscated by it. Stay of Auction – Held that:- confiscated by the Customs Department in 1997 - What had been produced by the Customs Department were Bills of Exchange and Packing List dated 1990 and 1991 recording ‘capital goods and ‘raw materials - In the absence of any inventory prepared by the Customs Department at the time of confiscation in 1997, it was not possible to verify whether the ‘capital goods described in the Bills of Exchange and Packing List nearly six years earlier to the confiscation were the ones that were in fact confiscated - Another reason and in our opinion a very cogent one, which was given by the learned Company Judge, was that in the absence of any mark on said ‘capital goods to indicate that they had been confiscated by the Customs Department, it was not possible to conclude that they were the ‘plant and machinery which were sold to and handed over to the auction purchaser in February, 2007 - The learned Company Judge concluded and we think rightly so that the laxity of the Customs Department and its failure to mark the goods confiscated by it rendered the goods incapable of identification - We may note at this juncture that one of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exemption granted subject to all just exceptions. Application stands disposed of. CM No.12923/2013 This is an application praying for condonation of 69 days delay in filing the appeal. Delay condoned. Application stands disposed of. CO. APP. 58/2013 and CM No.12924/2013 (stay) 1. This appeal is directed against the order dated 26th April, 2013 passed by the learned Company Judge in CA Nos.910/2008 and 1297/2008. The first application (CA No.910/2008) was filed by the Appellant (Customs Department) seeking the setting aside of the auction sale of the capital goods and raw materials belonging to M/s. Yuil Measures (India) Limited (hereinafter referred to as YMIL ) pursuant to the order dated 7th December, 2006 passed by the learned Company Judge. The second application (CA No.1297/2008) was filed by the auction purchaser, Mr. Vilas Gupta for permission to further sell the plant and machinery of YMIL purchased by him in the auction sale to enable him to generate capital for his company. 2. The facts leading to the filing of the aforesaid two applications are that by an order dated 12th October, 2004, YMIL was ordered to be wound up by the learned Company Judge after not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods and instead filed an appeal before the Central Excise and Gold Appellate Tribunal, New Delhi (CEGAT). The CEGAT vide its order dated 18th June, 1999 upheld the order of the Commissioner of Customs. 4. As noted hereinabove, the BIFR had recommended the winding up of YMIL and on the recommendation of the BIFR, the learned Company Judge ordered the winding up of the company on 30th October, 2000 and appointed the Official Liquidator as the Liquidator of YMIL. The Official Liquidator after obtaining a report of the valuation of the assets of YMIL, under the directions of the Court sold the capital goods and raw material of YMIL by way of auction sale, which was confirmed by the Court on 7th December, 2006 noting that the sale was made at the highest bid of Rs. 1,35,50,000/-. In terms of the subsequent order of the Court dated 18th January, 2007, possession of the capital goods and raw material was secured by the Official Liquidator from the Development Commissioner and then handed over by the representative of the Official Liquidator to the auction purchaser who had deposited the full amount on 7.2.2007 and possession memo with regard to the handing over was also obtained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed an application (CA No.1016/2008) for the first time seeking quashing/setting aside of the sale confirmed by the Court on 7th February, 2007. Reply was filed to this application by the auction purchaser pointing out that he had paid Rs. 1,07,85,962.25 for the building and Rs. 27,64,037.75 for the plant and machinery of YMIL; that he was a bonafide purchaser of the plant and machinery, which in any event was of no use to him and had only scrap value. It was stated by him in para 10 of the reply that neither any inventory was prepared by the Official Liquidator at the time of handing over the possession of the plant and machinery nor any inventory was given by the office of the Official Liquidator. In para 12 of his said reply, the auction purchaser made a specific averment that he had written to the Deputy Commissioner of Customs, NSEZ on 2nd September, 2008 for permission to dispose of the plant and machinery, but no response to his said letter was given by the Deputy Commissioner. In paragraph 15 of his reply, the auction purchaser stated that he was ready and willing to return the plant and machinery if he was returned the sum of Rs. 27,64,037.75. He also filed an applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court would be inclined to impose costs on the Customs Department as it did not intimate the Court prior to the confirmation of the auction that goods had been confiscated by it. List on 27th February 2012. Order dasti under signatures of Court Master to all parties. Co. Pet. No. 1016 of 2008 Present application has been filed by the Customs Department for stay of auction. Admittedly, present application has become infructuous. Accordingly, the application is dismissed. 9. The Deputy Commissioner of Customs, NSEZ on 24th February, 2012 thereupon filed affidavit stating that the documents sought by the Court were not readily traceable as the same were very old and efforts were being made to trace out the same. On 31st August, 2012, another affidavit was filed enclosing copies of some of the Bills of Exchanges but stating therein that copy of the inventory of goods at the time of confiscation was not available in the relevant file. Paragraph 4 of the said affidavit is significant, which reads as under:- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment at the time when the goods were confiscated way back in the year 1997. The goods were not even marked for the purpose of identification at the time of confiscation. Then again, having confiscated the goods the Customs Department sat on the fence and watched the auction sale take place. The application for setting aside of the auction sale was eventually filed by it in the year 2008, i.e., eleven years after it had confiscated the goods in question. There being nothing with the Official Liquidator to indicate that the goods were confiscated by the Customs Department, the Department sought to rely upon the Bills of Exchange dated 1990 and 1991 prepared six years earlier to the confiscation, which in no way are indicative of the goods confiscated by the Department. In such circumstances, the Company Judge in our opinion rightly concluded that it was not possible to speculate at this stage that the goods sold to the auction purchaser in 2007 were in fact the very goods that were confiscated by the Customs Department in 1997. The Customs Department not only failed to inform the Official Liquidator that goods had been confiscated by it, but also could not place on record any ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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