Customs, Excise and Gold Tribunal - Delhi
Ajanta Music Palace vs Collector Of Customs on 12 August, 1993
Equivalent citations: 1993(68)ELT414(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. The short point for our consideration in this case is, that when goods seized under the provisions of the Customs Act, 1962, are ordered to be released by the competent authority, and in the meanwhile such goods have been disposed of by the Customs department in terms of Section 110(1A) of the said Act, whether the person from whose possession the said goods were seized, is entitled for the -
(a) Value of such goods determined at the time of seizure as shown in the panchnama; or
(b) the sale proceeds of the said goods disposed of in terms of Section 110(lA)of the Act.
2. The brief facts of the case are as under :-
(1) On 8-5-1991, under the authority of a search warrant issued by the Assistant Collector of Customs, Indore, residential and business premises of M/s. Ajanta Music Palace, Ujjain were searched.
(2) goods of foreign origin valued at Rs. 1,07,480/- were seized under a panchnama drawn on the spot.
(3) the goods of foreign origin were seized under a reasonable belief that the same were liable for confiscation under the provisions of the Customs Act, 1962.
(4) the appellants reported to have purchased the goods seized, from different individuals who had imported the same for their personal use. When the goods were purchased, they were reported to have stopped working due to mishandling or due to some other minor trouble. They were purchased at very low prices and it was stated that the appellants had repaired them and made them serviceable.
(5) On adjudication, vide order-in-original dated 21-4-1992, except 17 Video Cassettes (which were confiscated absolutely), the rest of the goods seized valued at Rs. 1,05,100/-, were ordered to be released to M/s. Ajanta Music Palace, from whom they had been seized.
(6) Before adjudication, the goods (ordered to be released) had been disposed of in terms of Section 110(1A) of the Act, for Rs. 52,741/-on various dates between 30-8-1991 to 13-1-1992.
(7) The adjudicating authority ordered that the appellants were eligible for receipt of the sale proceeds.
3. The case was heard on 11-5-1993, when Shri K.G. Seth, Advocate appeared for the appellants. The respondents were represented by Shri B.D. Bhagat, J.D.R.
4. Shri Seth, the learned Advocate mentioned that there were a number of decisions by the High Courts and the Tribunal in their favour. He submitted that the value as determined by the department at the time of seizure, should be given to the appellants. As regards Video Cassettes, he stated that there was no evidence of their smuggling and there was no reason to believe that they were smuggled.
5. Shri B.D. Bhagat, the learned JDR submitted that as per law, the sale proceeds were offered to the party. The goods have been rightly disposed of under the provisions of Section 110(1A) of the Customs Act. They were covered by the provisions of this Section. At the time of seizure, the only factor relevant is the 'reason to believe' that the goods were liable to confiscation under the provisions of the Customs Act. At the time of seizure, the emphasis is on the 'goods' and not so much on their 'value'. It is only at the time of adjudication that the charges levelled in the show cause notice are established. It is open to the adjudicating authority to come to his own decision about the allegations, contraventions, valuation etc., as alleged in the show cause notice.
6. The respondents have filed Cross Objections in which it was mentioned that 17 Video Cassettes confiscated absolutely were new, and the appellants had failed to furnish any document regarding legal importation of these Video Cassettes. With regard to valuation of the seized goods, it was submitted that the same were 3 to 5 years old at the time of adjudication, and obviously the value as shown in the panchnama was very much on the higher side, whereas the sale proceeds represented the actual value of the seized goods. It was prayed that the appeal filed by the appellants be rejected and the order passed by the Collector of Central Excise be upheld.
7. We have carefully gone through the facts and circumstances of the case and have also studied the relevant provisions of law. Under Sub-section (1A) of Section 110 [Sub-section (1A) was inserted in Section 110 by the Customs (Amendment) Act, 1985], "the Central Govt. may having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant consideration, by Notification in the official Gazette, specify the goods or class of goods which shall as soon as may be, after its seizure under Sub-section (1) be disposed of by the proper officer in such manner, as the Central Govt. may, from time to time, determine after following the procedure hereinafter specified."
This sub-section was inserted to provide for the procedure to be adopted for the disposal of certain seized goods having regard to their perishable nature or depreciation in their value with the passage of time, or other relevant circumstances (Statement of objects and reasons in the Bill).
8. Under Sub-section (1B), the procedure adopted for the disposal of the goods specified under Sub-section (1A) of Section 110, has been provided.
The following goods have been specified under Sub-section (1A), vide Notification No. GSR-87(E), dated 5-2-1986 (1) Liquors;
(2) Primary cells and primary batteries including rechargeable batteries;
(3) Wrist watches; including electronic wrist watches, watch movements, parts or components thereof;
(4) All electronic goods including television sets; Video cassette recorders, tape recorders, calculators, computers, components and spares thereof including diodes, transistors, integrated circuits etc; and (5) Dangerous drugs and psychotropic substances;
9. The electronic goods in the case before us were seized on 8-5-1991, and were disposed of between 30-8-1991 to 13-1-1992. As is apparent from the order of the Additional Collector of Central Excise and Customs, Indore, the goods ordered to be released by him, have been disposed of in terms of Section 110(1A) of the Customs Act, 1962. He had ordered that the sale proceeds of these goods should be handed over to the appellants. The appellants, on the other hand, while not disputing the disposal or the procedure regarding disposal adopted by the Department, had submitted that they are entitled not for the sale proceeds but for the seizure value i.e. the value determined by the department at the time of seizure. In support of their plea, they have cited a number of decisions which we propose to discuss in succeeding paragraphs.
10. The case of Union of India v. Sambhunath Karmakar 1986 (26) E.L.T. 719 (Cal.) pertained to the period prior to the introduction of Sub-section (1A) of Section 110. The gold in that case was seized on 26-4-1963. The initial order of confiscation was passed by the Collector of Central Excise on 10-1-1964. The seized gold was forwarded for melting to the Government of India Mint. It had not been sold to a third party for value. Subsequently, the confiscation order had been set aside by the Collector of Central Excise on 6-5-1985. In the circumstances of that case, the Calcutta High Court had observed that the Government was bound to return the said gold or the value on the date the Collector of Central Excise set aside the confiscation order. It will be seen that even in that case, which pertained to the period prior to the insertion of Sub-section (1A) in Section 110 the value at the time of the seizure was not considered relevant, and it was the value on the date on which the confiscation order has been set aside by the Collector of Central Excise, which alone was considered relevant.
11. In the case of Shyamlal Sharma v. Collector of Customs 1992 (57) E.L.T. 415 (Tri.), the contraband goods were seized on 3-11-1983. The show cause notice was served on the parties after the expiry of the time limit prescribed under Section 110 of the Act. No extension of time for issuing show cause notice beyond the statutory time limit of 6 months had been obtained from the Collector of Customs. The goods were confiscated and were not returned to the party. In that case, the.provisions of Section 110(1A) were not quoted before the Tribunal.
12. Before the matter reached the Tribunal, the goods had already been sold. It was in these circumstances that the Tribunal held in para 37 of their order that if the goods in question were already sold by the department, the department shall pay the seizure value of the goods to the appellants.
13. In the case before us, the show cause notice was issued within time and the goods were covered by the provisions of Sub-section (1A) of Section 110 of the Act. In the order-in-original, the Addl. Collector of Customs had remarked that "as the said released goods have been disposed of in terms of Section 110(1A) of the Customs Act, 1962, they are eligible for receipt of the sales proceeds of these".
14. In the case of Samsudin Sheikh v. Collector of Customs 1992 (58) E.L.T. 246 (Trib.), the Tribunal had observed that in a case where confiscation of goods was set aside and return of the goods was ordered, the Department was obliged to pay the market value of the goods as on the date of quashing of the confiscation, if the goods were not available having already been auctioned. The Tribunal had not mentioned the seizure value.
15. In the case of Giridharilal Kalyandas Advani v. U.O.I. 1992 (58) E.L.T. 453 (Bom.), the goods concerned were gold ornaments. They were seized on 23-2-1980 from certified goldsmiths under the provisions of the Gold (Control) Act, 1968. On 22-2-1983, the Addl. Collector came to a finding that the gold under seizure belonged to the customers of the petitioners and was not liable to confiscation. The gold ornaments were reported to be missing from the office of the Supdt. Central Excise.
16. The Bombay High Court observed that the market value as on 22-2-1983 be refunded by the respondents. Here also it was the date of the order of the Addl. Collector that was considered relevant and not the date of seizure. The High Court observed that the market value of the ornaments was to be ascertained with reference to the date on which the liability of the respondents arose to return the ornaments.
17. Similar observations were made by the Tribunal in the case of P. Mohan v. Collector of Customs 1992 (62) E.L.T. 82 (Trib.). In that case, in spite of the receipt of the order dated 25-9-1990 passed by the Tribunal, the departmental authorities had auctioned the goods on 27-11-1990 without reference to the said order of the Tribunal.
18. In all these cases, there was no reference to Sub-section (1A) of Section 110 of the Act. No plea has been taken by the appellants with regard to the procedure for disposal of the specified goods, as per Section 110(1A) of the Act. It is presumed that in the absence of any evidence or the plea to the contrary, the prescribed procedure for the disposal of the electronic goods as provided in Sub-section (1A) of Section 110 of the Customs Act, had been followed.
19. Under the law, the presumption is that the official acts have been regularly performed. The Addl. Collector of Customs, Indore in his order-in-original, has specifically referred that the goods ordered to be released by him had been disposed of under the provisions of Section 110 Sub-section (1A) of the Customs Act, 1962. As we have said above, the appellants have not taken any plea that the procedure prescribed under Sub-section (1A) of Section 110 of the Customs Act had not been followed. Accordingly it is presumed that the prescribed procedure for the disposal of the goods under consideration, was followed.
20. Accordingly, we observe that the appellants were entitled for receipt of the sale proceeds of the goods ordered to be released by the Addl. Collector of Customs, Indore under his order in original dated 21-4-1992, and not the value as shown in the panchnama drawn at the time of seizure.
21. We do not find any reason to differ with the findings of the Addl. Collector with regard to the absolute confiscation of the video cassettes. In the circumstances of the case, however, we waive the penalty amount of Rs. 400/-imposed on the appellants under Section 112 of the Act. Subject to the above, the appeal is otherwise rejected. The cross objections filed by the respondents are also disposed of accordingly.