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TMI Blog2017 (5) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... e their assumption that they were prohibited articles. However, the CESTAT upheld the declared value of the goods. The amount payable to the petitioner, is that which was assessed to be the value of the goods at the time of seizure i.e., ₹ 51,70,619/- and not the amount for which the respondent sold the petitioner’s goods for i.e., ₹ 81,000/-. Furthermore Circular No.711/4/2006-Cus (AS) dated 14.02.2006 mandates the customs authorities to give due notice of sale to the petitioner before making the auction. Petition allowed - decided in favor of petitioner. - W. P. (C) 2575/2015 - - - Dated:- 27-4-2017 - S. Ravindra Bhat And Najmi Waziri, JJ. For the Petitioner : Mr. Pradeep Jain with Mr. Shubhankar Jha, Advocates For the Respondents : Mr. Sanjeev Narula, Sr. Standing Counsel for Resp-1 with Mr. Abhishek Ghai, Advocate, Mr. Tarun Gulati with Mr. Sparsh Bhargava, Mr. Vinayak Mathur, Mr. Anupam Mishra and Mr. Vipin Upadhyay, Advocates JUDGMENT S. Ravindra Bhat, J. 1. The present petition under Article 226 of the Constitution claims for directions to payment of the declared value of imported goods that were confiscated, by an order of the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment subsystem as declared by the imported, but complete equipment in itself which has the facility to transmit live video/ audio and other data for broadcasting; is specifically classifiable under CTH 85255020 and is not permitted to be imported except against the license issued by the WPC wing of the Ministry of Telecommunication and Information Technology. 5. The respondent by its order dated 25.10.2012 directed absolute confiscation of the goods as according to it, the importer had failed to produce the requisite license from the DGFT and the WPC, and imposed a penalty of ₹ 5 lakh on the petitioner under Section 112(a) of the Customs Act, 1962. The Petitioner aggrieved by the order assailed it by an appeal and stay application before the CESTAT ( the tribunal ) in New Delhi. During pendency of the appeal the respondent was restrained from disposing off the goods. However, despite this restraint, the respondent auctioned off the goods. The tribunal allowed the appeal and by order dated 29.01.2014 set aside the impugned order of 25.10.2012. 6. The petitioner submits that no notice was served on it before auctioning off of the goods, and it had not waived the issuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Sanjeev Narula, alleged that the petitioner had not approached the court with clean hands as it averred that goods were sold by the respondent whereas, the respondent contends, the goods were sold by the Custodian, M/s Delhi International Airport (P) Ltd, IGI Airport, New Delhi (hereinafter M/s DIAL Ltd) under Section 48 of the Customs Act, 1962. This was done as the petitioner failed to respond to the notices issued to him regarding disposal of his property under Section 48 in the event of his failure to clear the cargo. To this effect, the Customs claims to have taken out advertisements in the Indian Express, the Hindustan Times and the Educator newspapers by the Custodian and thereafter the goods were sold as part of a larger container lot for ₹ 81,000/- to M/s. Star Traders. In view of these facts, the customs authorities stated that the custodian i.e., M/s DIAL Ltd. was a necessary party to the instant writ petition. 10. Mr. Narula, denies the petitioner s arguments regarding the customs inaction and stated that it had not sold the goods but that they were sold by the Custodian under Section 48 of the Customs Act. The respondent also stated that for all imported g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell had issued due notice to the petitioner s address before the auction, which can be verified from the Airway Bill. He has also issued a Press Release with respect to the goods and their auction till February 2014. The goods were only auctioned off after there was no response from the petitioner. Hence, the particulars stipulated in the circular were complied with. Analysis 14. The dispute in the present writ petition is with respect to making payment of the value of the imported goods, to the petitioner. The CESTAT directed the respondent either to return the broadcasting equipment or make refund of value of broadcasting equipment to the petitioner. The equipment was sold in auction for ₹ 81,000/-, the petitioner contacted the respondent to make payment of cost of goods i.e., ₹ 51,70,619/- along with interest to the petitioner. The present petition was filed to direct the respondent to comply with the order of the CESTAT made on 29.01.2014. 15. The petitioner was aggrieved by the fact that his goods were auctioned off without its knowledge and before giving it opportunity of being heard. The petitioner contends that this is in violation of this court s judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms authorities; they do not deny that an interim order operated during the pendency of the petitioner s appeal, before the CESTAT. This meant that any action towards sale carried with it an inherent risk of exposure to a potential action for restitution. In other words, once the customs authorities were aware that the confiscation order was not final, but subject to the outcome of the appeal, they were accountable to the importer in the event of its success. A notice to the petitioner could have averted a possible risk of liability, because it was to notify the importer to make arrangement for purchase. The customs authorities allowed to sell the goods, at a vastly depressed price, despite their assumption that they were prohibited articles. However, the CESTAT upheld the declared value of the goods. 19. As can be seen from the authorities cited, the goods could not have been auctioned off before due notice of sale is given to the petitioner and without obtaining the consent of the CESTAT during pendency of the appeal. The fact that the respondent authorities auctioned off the goods during the pendency of the appeal is an act which is against the letter of the law. Their subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to award interest at such a high rate and considering the facts and circumstances of the case it would be in the interest of justice if the respondent is directed to return the amount of ₹ 33.04 lakhs with interest at the rate of 12% from 1-2-1989 till the date of payment as the Collector by his order dated 31-1-1989 had held that the goods were properly described and the import was legal (sic)10. In the result the applications are allowed. The respondent is directed to return the amount of ₹ 33.04 lakhs with 12% interest from 1-2-1989 till the date of payment. Similarly, the Calcutta High Court had also by its judgment in Ahsan Waris v. Commissioner of Customs (Preventive), 2014 (305) ELT 78 (Cal.), ruled: By applying the ratio as laid down in the above noted reports the respondent authorities are bound to pay the value of the goods assessed at the time of seizure and not the value which it fetched from the sale of said goods after the seizure is declared to be illegal by the CESTAT. The authorities are thus directed to pay the petitioner the differential amount within eight weeks from the date of the communication of this order In Shilps Impex (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with goods not cleared, warehoused or transshipped within 30 days after unloading. However, in the present case, the goods were stopped from being cleared only on the basis of allegation made by the customs authority which allegation was ultimately rejected by the CESTAT, New Delhi, by its order dated 29.01.2014. Thus, giving permission for auction at an advanced stage of the matter while it is still being adjudicated does not set a good precedent. 23. Clearly, the customs authorities wrongly disposed off the petitioner s property during the period when the petitioner s appeal was pending. Furthermore, in terms of the order of 25.10.2012, the goods were absolutely confiscated by the customs authority, so the goods ending up in the custody of M/s DIAL Ltd could not have been without the respondent s consent as M/s DIAL Ltd had no jurisdiction over the goods, let alone authority to sell. In these circumstances, the petitioner s claim has to succeed. The first two respondents are accordingly directed to pay the amount of ₹ 51,70,619/-, i.e., the declared value of the confiscated goods to the petitioner, after deducting the customs duty payable on it, in accordance with law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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