Gujarat High Court
Prakash Kumar Jain vs Union Of India on 2 February, 1999
Equivalent citations: 2001(127)ELT674(GUJ)
Author: M.C. Patel
Bench: C.K. Thakker, M.C. Patel
JUDGMENT M.C. Patel, J.
1. This is a petition under Article 226 of the Constitution of India.
2. The petitioner's grievance at the time when the petition was filed was that the authorities under the Customs Act had failed to release the goods, which were ordered to be released by the Commissioner (Appeals), Central Excise and Customs, in the appeal filed by the petitioner against the order of confiscation passed by the Additional Collector, Customs (Preventive), Gujarat.
3. The facts leading to the present petition are as follows :
On 8-10-1994 some Customs Officers seized a parcel from M/s. Om Air Gargo Enterprises, Sarangpur, Ahmedabad belonging to the petitioner. The parcel contained consumer goods of foreign origin. The goods consisted of cosmetic items such as Shampoo, Spray and Shave Cream and electronic articles, such as cassette, flash light, electronic calculators, casio TV and cameras. There was no dispute that the goods were of foreign origin, but the petitioner's explanation was that they were brought by him through a relative named Joitaram from Madras, whose address he did not know, but whose telephone number he gave as 567511. He expressed his inability to produce any document indicating payment of customs duty on the said goods. When inquiries were made at Madras, it was found that the telephone No. 567511 belonged to C.N. Enterprises and there was no person by name Joitaram using the said telephone number or connected to the said office. The petitioner gave a further statement on 26-10-1994 declaring that he did not have any document showing payment of customs duty and he said that he was willing to pay customs duty payable on the said goods and he sought waiver of the show cause notice. Again in his further statement on 2-11-1994 he stated that the cosmetic goods at Sr. Nos. 1, 3, 4, 6 and 7 of the Panchnama were for his personal use and he requested that they may release to him. He expressed his willingness to pay duty and penalty on the remaining goods, personal hearing was fixed on 13-1-1996, when the petitioner appeared and submitted that the person from whom he had purchased the goods had purchased the same from passengers who had paid the duty at the appropriate rate on the goods. He also submitted original copies of the challans. He submitted that the person who had sent the goods in question had sent them for selling at Ahmedabad and that the goods in question had been legally imported and he made a request for the release of the goods.
4. After considering the facts and circumstances of the case and different explanations offered by the petitioner from time to time, the Additional Collector, Customs, came to the conclusion that the petitioner was dealing in the sale of foreign goods and had produced receipts through sources known to him which he kept back at the initial stage when he gave telephone number of a fictitious person, ostensibly to mislead the authorities so that they cannot reach the source of the goods. He came to the conclusion that although the goods are neither notified nor falling under Section 123, they had not been bona fide acquired by the petitioner in a lawful way, but were part of clandestine activity to bring in goods of foreign origin without payment of duty and dispose of them through persons like the petitioner. He, therefore, came to the conclusion that the goods were liable to confiscation and, by his order dated 23-3-1995, ordered confiscation of the goods seized under Panchnama dated 8-10-1994 under Section 111(d) of the Customs Act, 1962 and imposed a personal penalty of Rs. 10,000/- on the petitioner under Section 112(a)(b) of the Customs Act.
5. The petitioner, being aggrieved by the said order of confiscation and penalty, preferred an appeal to the Commissioner (Appeals), Central Excise and Customs, Ahmedabad. The Commissioner came to the conclusion that amongst the seized goods only Electronic Calculators appear within the list of notified goods under Section 123 of the Customs Act. The rest of the goods were not notified, though they were admittedly of foreign origin and hence the burden of proving the smuggled nature of the said goods was on the department. He found that the department had failed to discharge the burden placed upon them in this regard to sustain the finding that the goods had been smuggled. He, therefore, by his order dated 22-11-1995 partly allowed the appeal and modified the order of confiscation passed by the Additional Collector by ordering unconditional release of the seized goods except Electronic Calculators which were allowed to be redeemed on payment of redemption fine of Rs. 15,000/- and the penalty imposed on the petitioner was reduced from Rs. 10,000/- to Rs. 4,000/- only.
6. The petitioner did not file any appeal to the Customs, Excise and Gold (Control) Appellate Tribunal against the said order to the extent it did not allow unconditional release of Electronic Calculators. The Department did prefer an appeal to the Appellate Tribunal, but the Tribunal by the order dated 7-8-1996 dismissed the same at admission stage holding that there was no case for interference with the order of the Commissioner (Appeals).
7. In the meantime on 26-12-1995, the petitioner, through his Advocate, addressed a notice to the Additional Commissioner, Customs (Preventive), Ahmedabad drawing his attention to the said order dated 22-11-1995 passed by the appellate authority and called upon him to release the goods in compliance with the said order within seven days from the date of receipt of the notice. Since there was no response from the authority concerned, the petitioner filed the present petition on 15-2-1996 seeking release of the goods seized from him. Initially, notice was issued to the respondents. When in response to the notice, Assistant Commissioner of Customs (Preventive), filed an affidavit, it came out that the goods had been disposed of by sale to a co-operative society while the petitioner's appeal against the order of confiscation was pending before the Commissioner (Appeals) and before it was heard. He stated that the goods had been sold to the National Consumer Co-op. Federation, Ahmedabad. He stated that articles such as shampoo, spray and cream were considered perishable in view of the fact that they would ascertaining the price according to the usual procedure, i.e. by reference to the Joint Price Committee, Bombay in respect of some of the items and Local Price Committee in respect of the rest of the items, they were sold to the National Consumer Co-operative Federation, Ahmedabad in keeping with the policy of the Customs Department to sell the confiscated goods to the co-operative organisations. The rest of the goods, namely, cassettes, flash lights, calculators, TVs, cameras, etc. were disposed of by sale on 5-9-1995. According to him, Disposal Section was not aware of the fact that any appeal had been filed by the petitioner against the order of confiscation and the same was still pending. He stated that the total price realised by the sale of the goods was Rs. 28,493/-, after allowing a discount to the National Consumer Co-op. Federation at 14.5% of the total price. He submitted that though the value of the goods was shown to be Rs. 60,420/- in the order of confiscation, it reflected only the Panchnama-value and represents an approximation but the value assessed by the Local Pricing Committee was on the basis of authentic date.
8. In view of the said affidavit, petitioner's Advocate sought amendment of the petition, praying for a direction to the respondent-authorities to pay to the petitioner the sale proceeds of the goods.
9. On 5-12-1996, the petition was admitted and in view of the said affidavit filed by the Assistant Commissioner of Customs (Preventive), the department was directed to pay the price of the goods actually realised by them after paying discount to National Consumer Co-op. Federation by sale of goods other than Electronic Calculators, which payment could be subject to the final result of the petition.
10. Pursuant to the said order, it appears that the Assistant Commissioner, Customs Division, Ahmedabad, passed an order dated 14-3-1997 sanctioning the payment to the petitioner of Rs. 6,538/- after allowing discount at 14.5% to the Federation and deducting the penalty amount of Rs. 4,000/- payable by the petitioner. The petitioner, however, has not accepted the said amount. It appears, that the petitioner moved another Civil Application bearing No. 5809 of 1997 for amending the prayer in the petition so as to direct the respondent authorities to pay Rs. 1,05,065/- as the price of the goods seized.
11. During the pendency of the petition, the petitioner has changed his advocate three times, each time the new Advocate amending the petition, but ultimately what the petitioner seeks is direction to the authority concerned to pay his Rs. 1,05,065/- which, according to him, is the value of the goods seized from him.
12. At the hearing of the petition, the learned Advocate for the petitioner submitted that the authorities had disposed of the goods without any justification, while the petitioner's appeal against the order of confiscation was pending and in the circumstances they were bound to pay to the petitioner the market value of the goods, which according to him, was Rs. 1,05,065/-. He also submitted that the order of the appellate authority to the extent it refused unconditional release of electronic calculators and allowed their redemption on payment of Rs. 15,000/- and a penalty of Rs. 4,000 was erroneous in law.
13. The learned Advocate for the respondents ought to justify the disposal and sale of the goods on the grounds stated in the affidavit-in-reply of the Assistant Commissioner of Customs (Preventive).
14. Now, so far as the order of the appellate authority, did not allow unconditional release of electronic calculators, the petitioner did not challenge the same by preferring any appeal to the appellate Tribunal or revision application to the Central Government. The respondent-authorities had challenged the said order by filing an appeal to the appellate Tribunal, but the same has been dismissed. In the circumstances, the order of the appellate authority has become final and the petitioner is not entitled to challenge the same in the present proceedings to the extent it disallowed unconditional release of electronic calculators by passing the statutory remedies available under the Customs Act. As far as the respondent-authorities are concerned, they were bound to release the goods some of them unconditionally and electronic calculators on payment of redemption fine and payment of penalty, as per the order of the appellate authority. But, unfortunately the goods had been disposed of while the petitioner's appeal against the order of confiscation was pending and the authorities are now unable to return the goods. In our opinion, it is not necessary to go into the question whether the authorities were justified in disposing of the goods while the petitioner's appeal against the order of confiscation was still pending. If the authorities are not able to return the goods, they are bound to make payment of compensation for the same. Ordinarily the measure of compensation would be the value of the goods. According to the petitioner, the authorities have disposed of the goods at a throw away price, but he is entitled to Rs. 1,05,065/- as the value of the goods. The respondent-authorities have sought to justify the price realised on sale to the National Consumer Co-op. Federation. Now, this raises a disputed question of fact. There is no doubt that the respondent-authorities are bound to make payment of compensation, if they are unable to return the goods which were ordered to be released. However, the value of the goods is disputed and such a disputed question of fact cannot be decided in a proceeding under Article 226 of the Constitution of India. We, therefore, would leave the petitioner to such other remedy as may be available to him either under the Customs Act, if any, or by filing a civil suit for recovering compensation for the failure of the respondent-authorities to return the goods which were ordered to be released. It would be open to the petitioner to accept the payment of the amount offered by the Assistant Commissioner, Customs, Ahmedabad by his order dated 14-3-1997 and take appropriate proceedings to recover the rest of his claim.
15. The petition is disposed of with the above observations. Rule is discharged with no order as to costs.