Calcutta High Court
Rang Birajgi Sarees(P)Ltd vs Addl.Commissioner Of Customs & Ors on 7 May, 2008
Author: Soumitra Pal
Bench: Soumitra Pal
WP No. 194 of 2008
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
RANG BIRAJGI SAREES(P)LTD Plaintiff/Petitioner/Applicant
Versus
ADDL.COMMISSIONER OF CUSTOMS & ORS Defendant/Respondent
For Plaintiff/Petitioner : MR.SUDHIR MEHTA, ADV.
For Defendant/Respondent : MR.S.DAS,ADV.
BEFORE:
The Hon'ble JUSTICE SOUMITRA PAL
Date : 7th May, 2008.
The Court : The petitioner, a company
incorporated under the Companies Act, 1956 has filed the writ petition praying for a direction upon the respondents particularly upon the respondent nos.1,2,3 and 4 to make payment of Rs.9,19,625, being the seizure value of the goods to the petitioner in terms of the order dated 22nd February, 2007 passed by the Customs, Excise and Service Tax Appellate Tribunal along with statutory interest.
The facts are during December, 2003 the imported goods of the petitioner were seized. According to the petitioner, though the 2 value of the goods were above Rs.12 lakhs, the customs authorities, as it would appear from the seizure memorandum valued it at Rs.9,35,765/-. Challenging the seizure a writ petition was filed which was disposed of by order dated 24th April, 2003 directing the customs authorities to decide the matter in accordance with law. Thereafter, on 1st May, 2003 show cause notice was issued by the respondent no.2. The goods were shown to be valued at Rs.9,19,625/-. Adjudication was done by the Additional Commissioner of Customs (Special Investigation Branch) who by an order dated 28th July, 2004 passed an order of confiscation and imposed redemption fine of Rs.50,000/- and a penalty of Rs.50,000/-. Against the said order an appeal was preferred before the Commissioner of Customs (Appeal). By an order dated 31st January, 2006 appeal was dismissed. Still aggrieved, the petitioner preferred a further appeal before the Customs, Excise and Service Tax Appellate Tribunal, Calcutta. The learned Tribunal by order dated 22nd February, 2007 allowed the appeal by setting aside the order passed by the Commissioner of Customs (Appeals).
Thereafter, learned advocate of the petitioner by letter dated 27th February, 2007 requested the Superintendent of Customs, Varanasi and respondent no.1 to comply the order passed by the Tribunal and release the goods. The Deputy Commissioner of Customs (Special Investigation Branch) by an intimation dated 14th December, 2007 intimated the Deputy Commissioner of Customs 3 (Preventive Division)Varanasi, that the order passed by the Tribunal have been accepted by the Commissioner of Customs(Port). However, as the goods were not released, being aggrieved, this writ petition was filed.
The matter came up for hearing on 12th March, 2008 when directions were issued for filing of affidavits. Affidavits have since been exchanged. The customs authorities in its affidavit have stated that due to mistake, in 2004 the goods have been sold. The explanation in the affidavit is as there was delay on part of the petitioner in preferring appeal, as the Deputy Commissioner of Customs Division, Varanasi was not a party in the appeal and as there was communication gap in between the respondents the goods were sold.
The issue is whether the goods confiscated and directed to be released by the order of the Tribunal can be sold. Section 150 of Customs Act, 1962 (for short 'the Act') postulates the procedure for sale of goods and application of sale proceeds. Relevant portion of Section 150 of the Act is as under:
"(1) Where any goods not being confiscated goods are to be sold under any provisions of this Act, they shall, after notice to the owner thereof, be sold by public auction or by tender or with the consent of the owner in any other manner."4
The question in the instant case is whether before sale notice was given to the petitioner - the owner of the goods or whether goods were sold by public auction. I find the affidavit- in-opposition is silent in this regard. Though it has been stated in paragraph-24 of the affidavit filed by the authorities "that the goods were sold lawfully to M/s.NCCF, Lucknow, as per the price fixed by the Combined Disposal Committee based on the market opinion, so as to realise the maximum price" such sale in my view is in total disregard of the provisions contained in Section 150 of the Act. It is unfortunate that though the High Court in COMMR. OF CUS.(PREV),W.B.,CALCUTTA VS. RATAN KUMAR SAHA 2005 (189)E.L.T.11(Cal.) and in BHOGILAL MEHTA VS. UNION OF INDIA 2004(164)E.L.T.239(Cal.) has deprecated the practice of selling the goods without adhering to the procedure established in law, yet the customs authorities have sold the goods without going in for public auction and without giving notice to the owner of the goods. It is also in utter disregard to the Circular No.711/4/2006-Cus.(AS) dated 14-Feb-2006 the authorities are to be remined that law interpreted and laid down is for strict compliance and circulars issued by the authorities themselves are for adherence in letter and spirit.
In the instant case admittedly neither notice was served on the owner of the goods, that is the petitioner, nor it was sold by public auction. Therefore, the impugned action of the respondents 5 in selling the goods cannot be sustained. Hence, the writ petition is allowed. The respondent nos.1 to 4 are directed to pay a sum of Rs.9,19,625/- to the petitioner along with interest at the rate of Rs.9% per annum to be calculated from the date of the order passed by the Tribunal, that is, 22nd February, 2007 till the date of actual payment to be made within a fortnight from the date of presenting the certified copy of this order. The petitioner is entitled to costs which is assessed at Rs.1700/- to be paid by the respondent nos.1,2,3 and 4.
Urgent certified copy of this order, if applied for, be given to the appearing parties on priority basis.
(SOUMITRA PAL, J.) ssaha RO(ct)