Shilps Impex vs Union Of India (Uoi) And Anr.
2000 Latest Caselaw 1138 Del

JUDGMENT

Arijit Pasayat, C.J.

1. This case is a classic example of how simple matters get complicated by authorities. As factual scenario would go to show to a large extent that Customs officials were largely responsible for the confusion and impasse created.

2. In a nutshell the factual position asserted by petitioner and largely intraversed is as follows:

One Mauve & Crimson imported consignment of toys under invoice dated 12.2.1999 for US $ 10,11160 and filed Bill of Entry dated 26.2.1999. The said concern could not make payment to the consignor of the imported toys. Shipper approached the petitioner to buy the materials. The Shipping Agent filed an undertaking with the Commissioner of Customs, Inland Container Depot (in short the Commissioner)and permission was accorded to amend the Import General Manifest in the name of the petitioner. On 11.6.1993, Bill of entry in favour of the petitioner was filed with the Commissioner. On 15.6.1999 the said authority directed checking of the goods. On 28.6.1999 the goods were examined by the officials of the Customs Department . On 2.8.1999 petitioner requested for a personal hearing which was granted, During the hearing, the petitioner submitted that the declared value is genuine, bonafide and real value and not suppressed, and there is no reason to enhance the value as proposed by the Commissioner. However, Joint. Commissioner vide order dated 2.8.1999 enchanced the value from Rs. 4,34,835/ to Rs. 6,44,997/- and further ordered for confiscation under Section 111(m) of the Customs Act, 1962 (in short, the Act). However, he imposed redemption fine of Rs. 2,00,000/- and a penalty of Rs 50,000/- in addition to duty of Rs. 1,80,000/- Thirty days time was granted to the petitioner to deposit the fine and the penalty. Strangely no adjudication order has yet been issued to the petitioner. Be that as it may, according to the petitioner, to avoid demurrage, on coming to know of the amounts fixed petitioner deposited customs duty, redemption fine of Rs. 2 lakhs and penalty of Rs. 50,000/-. According to it, what was required to be done in terms of the adjudication order, even though not issued, has been complied with. On 1.3.8.1999, the petitioner paid detention, charges of Rs. 1,82,772/- towards container detention charges to shipping agents. After having taken necessary steps for release of the goods, when the petitioner inspected the container it was found to be open. The petitioner made frantic enquiries about the whereabouts of imported goods but nobody was willing to tell anything. Subsequently it surfaced that the imported goods were sold at a price of Rs. 2,78,000/- on 7.8.1999 itself, whereas invoice price of Rs. 434835/- was enchanced by the Customs authority to Rs. 6,44,997/-. Despite the fact that the petitioner was given time upto 1.9.1999 to make payment and in fact payment had been made on 13.8.1999, goods were sold on 7.8.1999. It is of vital importance that on 10.8.1999, Superintendent (Disposal) of the Commissioner's office vide letter of even date sought for No Objection Certificates from (a) Appraising Officer, (b) Superintendent (Law), Pre-Adjudication and (c) Office Supdt. IGM, and said No Objection was sought upto 31.8.1999 for contemplated auction/disposal of goods. Superintendent (Disposal) unmistakably acted with oblique motive, as the goods are shown to have been disposed of on 7.8.1999 i.e. prior to issuance of the letter calling for no objection. On 16.8.1999 the petitioner wrote a letter to the Container Corporation of India Ltd. (in short, Corporation) wanting to know the official status of the goods but no response was received . On 23.8.1999, the petitioner sent another letter to the said Corporation to know whereabouts of the imported goods. By letter dated 25.8.1999 the Corporation informed that the goods have been handed over to the Customs Authorities on 7.8.1999. Again the petitioner made enquiries from the Assistant Commissioner (Customs) wanting to know whereabouts of the goods. This was done on 16.9.1999 followed by letter dated 27.9.1999 and a telegram of that date, but there was no response. On 28.9.1999 the petitioner wrote another letter to the Commissioner requesting him to hand over the imported goods since it was legally entitled to delivery thereof having paid the customs duty, redemption fine and penalty and other dues. On 30.8.1.999, the petitioner sent another reminder to the Commissioner but there was no response and even to the telegram sent on the said date, there was no response. On 8.9.1999 the petitioner again requested the Commissioner to deliver the goods, met the officials of the Commissioner's office, but there was total silence. Thereafter, writ petition has been filed on 3.11.1999.

3. In the affidavit filed by the Deputy Commissioner Customs, it was stated that the petitioner's claim for refund was processed and by adjudication order dated 18.3.2000 passed by the Deputy Commissioner of Customs, refund of Rs. 3,80,000 was granted. It was stated that adjudication order is appealable and therefore writ petition should not be entertained. When the matter was placed before the Court on 21.3.2000, a copy of the adjudication order was produced. The Bench hearing the matter observed that it was not clear from the order as to how the amount of refund has been worked out. Therefore, a direction was given to the Deputy Commissioner (Refund) who had passed the order to be present in person on 28.3.2000. On the date fixed, Deputy Commissioner appeared and explained the stand of the Department. As the aforesaid order was passed even without giving an opportunity to the petitioner to have its say, the Assistant Commissioner (Refund) has passed a fresh order dated 8.8.2000 concluding portion thereof reads as under:-

"In view of my findings above I hereby reconfirm order for a refund of Rs. 3,80,000/- (Rs. 2 lacs Redemption fine and Rs. 1.8 lacs duty) which has already been paid vide cheques dated 18.3.2000 to M/s. Shilpa Impex. The amount of refund claimed on account of value of goods (Rs. 6,44,997/-Penalty (Rs. 50,000/-) container detention charges (Rs. 82,425/-) Demurrage charges (Rs. 87,000/-) and CHA charges (Rs. 15,000/-) is rejected."

4. We have heard the learned counsel for the parties. According to the petitioner, disposal of the goods even before the expiry of period granted by adjudication order is per see illegal, motivated and mala fide. Further, the conclusions of Assistant Commissioner who had passed the subsequent order dated 8.8.2000 shows an effort on the part of the authorities to bye-pass the main issue and, there main effort is to deprive the petitioner to its legitimate entitlement. According to the learned counsel for the respondent, the order is appealable one and in any event the course adopted by the authorities is in accordance with the provisions of Section 23(2) and Section 160 of the Act.

5. Though the order is appealable yet in view of the peculiar circumstances, we do not think it would be proper to throw out the petition on the ground of existence of alternative remedy. In view of the factual position highlighted above, not withstanding passing of order dated 8.8.2000 during pendency of writ petition, we entertain the petition. From the undisputed factual position it appears that the goods have already been sold and that too at much lesser price that the one declared by the petitioner and much less than the value of the goods adjudicated by the authorities. Though the petitioner had declared the value at Rs. 4.34,835/-, it according to the Department it was Rs. 6,24,997/- it is baffling that the goods were sold for Rs. 2,78,000/- On 2.8.1999, Joint Commissioner had fixed the price at Rs. 6,24,887/- as against the declared value of Rs. 4,34,835/- That being so, disposal of goods for Rs. 2,78,000/- on 7.8.1999 appears to be some what queer and mysterious. Be that as it may, once the petitioner had deposited the duty, redemption fine and penalty, it was entitled to release of the goods. Here again there is some confusion. According to the respondent, the petitioner was asked to take the goods from three consumer co-operative stores and it did not do so. In answer to this stand of the respondent, the petitioner has filed several letters to show that the goods which were supposed to be with three co-operative societies were not in a fit state to be taken back.

6. Sections 23(2) and 150 on which great emphasis is laid by the counsel for the respondent read as under:-

Section 23. Remission of duty on lost, destroyed or abandoned goods.

"(2) The owner of any imported goods may, at any time before an order for clearance of goods for home consumption under Section 47 or an order for permitting the deposit of goods in a warehousing under Section 60 has been

made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon.

 xxx    xxx    xxx    xxx   
 

 Section '150. Procedure for sale of goods and application of sale proceeds-' 
   

 (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. 
 

 (2) The proceeds of any such sale shall be applied - 
   

 (a) firstly to the payment of the expenses of the sale, 
 

 (b) next to the payment of the freight and other charges, if any, payable in respect of the goods sold, to the carrier, if notice of such charges has been given to the person having custody of the goods, 
 

 (c) next to the payment of the duty, if any, on the goods sold, 
 

 (d) next to the payment of the charges in respect of the goods sold due to the person having the custody of the goods, 
 

 (e) next to the payment of any amount due from the owner of the goods to the Central Government under the provisions of this Act or any other law relating to customs, and the balance, if any shall be paid to the owner of the goods."    
 

7. On a bare reading of the provisions, it is clear that they have no application to the facts of the case. Section 23(2) deals with a case of relinquishment of a title in the goods by the owner of the goods. "Relinquish" means to give over possession or control of, to leave off. According to Tomlins' Law Dictionary it means forsaking, abandoning or giving over . In Home v. Booth 3 M&G 742 11 LICP 78, it was observed that "relinquish" is not a world of Art, and an abandonment or non-claim would amount to relinquishment, and may be satisfied by an abandonment or non-claim. Admittedly, there was no relinquishment and at least that is not the stand of the Department and there has been no relinquishment. It was faintly suggested that the petitioner did not lift the goods and that amounts to relinquishment. Such a stand is hardly acceptable.' Section 150 operates in a different field altogether. It relates to sale of goods not being confiscated goods, and which are to be sold under any provisions of the Act. Even this provision postulates a notice to the owner before action is taken. That has been also undisputedly been not done.

As prescribed in Sub-section (1) of Section 150 it relates to conditions of sale and procedure thereof in respect of confiscated goods which are to be sold by public auction or tender or by consent of the owner. That is not the fact situation in the present case. The petitioner had deposited the redemption fine, duty and penalty. If it was the stand of the respondent that it was a case of under-valuation then there was no question of returning the redemption fine, duty already paid as indicated above.

8. In the aforesaid background, petitioner is entitled to receive the value of the goods as fixed by the Department i.e. Rs. 6,44,997/- and at the same time it is liable to pay redemption fine and duty which amount to Rs. 3,80,000/- Penalty of Rs. 50,000/-has already been paid. Therefore, the Customs Authority shall return to the petitioner a sum of Rs. 2,64,997/-(i.e. the difference between Rs. 6,44,997/-) and Rs. 3,80,000/-). The amount shall be remitted to the petitioner within a period of six weeks from today.