AHSAN WARIS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The Court: The point which evoked from the submissions of the respective counsels is whether the petitioner is entitled to a value of the goods assessed at the time of seizure or the value received by the respondent authorities from selling the said goods to a third party. The 4848.7 Mtrs. of Silk Fabrics of China Origin was seized under section 110 of the Customs Act on May 4, 2001. The authorities reasonably believed that the said goods were brought within the country in volition of the provisions contained under section 3(3) of Section 11(1) of the Foreign Trade (Development and Regulation) Act, 1992 read with para 15.2 of chapter 15 of Exim Policy 1997-2002 and section 11 of the Customs Act 1962.

(2.) The proceeding was initiated against the petitioner and the adjudicating authority did not pass a favourable order to the petitioner. The petitioner carried the said order before the appellate authority who affirms the said order subsequently, the order was further carried to the Customs Excise & Service Tax Appellate Tribunal (CESTAT) and the order of the adjudicating authority as well as the appellate authority was quashed and set aside. Between the period from the date of an order of the appellate tribunal and filing of an appeal before the CESTAT, the authorities sold the seized goods at a price of Rs. 2,28,010/- although the competent officer at the time of seizure valued the said goods at Rs. 7,75,792/-. The department challenged the order passed by CESTAT before this Court. The writ petition was initially admitted but thereafter no step was taken by the respondent authorities as a consequence whereof the appeal stood dismissed for default. Subsequently, the respondent authorities forwarded a cheque for a sum of Rs. 2,28,010/- being the value of the goods sold by the authorities which was accepted without prejudice by the petitioner.

(3.) In this writ petition the petitioner says that the authorities are required to pay the value of the goods assessed at the time of seizure. The learned advocate for the petitioner further submits that the action of the respondent authorities in selling the seized goods before the expiration of the statutory period for preferring an appeal before the CESTAT is unreasonable, arbitrary and contrary to law. The petitioner relies upon a Division Bench judgment of the Delhi High Court in case of Shilp Impex v. Union of India, 2001 128 ELT 54; Kailash Ribbon Factory Ltd. v. CC & CE, 2002 143 ELT 60 and Commissioner of Customs v. Harinder Singh, 2008 221 ELT 203 in support of his contention that the authorities are bound to refund either the goods seized in exercise of the statutory power or the value assessed at the time of seizure and not the value which the respondent authorities received while selling the seized goods. By placing reliance upon the judgment of the Supreme Court in the case of Northern Plastics Ltd. v. Collector of Customs & Central Excise, 1999 113 ELT 3, the petitioner submits that the moment an order of confiscation/seizure is declared illegal by a competent forum, the importer becomes entitled to the value of the goods as on the date and the time when the said goods ought to have been cleared by the customs authorities. Thus the petitioner submits that the authorities ought to have paid the amount valued at the time of the seizure and not the amount which the authorities fetched after selling the said goods. The petitioner further submits that section 150 of the Customs Act prescribed the procedure for sale of the goods after giving notice to the owner. He further submits that since no notice is given the sale has been conducted by the respondent authorities in gross violation of the statutory provisions.