Commissioner Of Customs vs Moti Lal Gupta
2007 Latest Caselaw 1298 Del

ORDER

Page 2154

1. These appeals deal with similar issues on both law and facts and, therefore, we propose to dispose of all the three appeals by this common judgment/order.

2. These appeals pertain to seizure of the polyster fabric imported by the respondent. The aforesaid seizure was made by the appellant at Mumbai and Delhi for want of valid licenses. However, subsequently it has been proved and established in these cases, that the consignments of polyster fabric were covered by valid licenses and imports were made in accordance with law and the consignments were wrongly seized by the appellant, viz. Department of Revenue Intelligence.

3. Since the goods were perishable in nature, therefore, during the pendency of the writ petition, prayer was made by the respondent for selling the said goods and the money to be realised be kept in a fixed deposit account until final adjudication of the proceedings. Division Bench of this Court passed an order on 4th August, 1887 for sale of the aforesaid goods by the appellant after keeping samples with a further direction that sale proceeds realised there from to be kept in a fixed deposit account. The said order was passed by the Division Bench of this Court in W.P.(C) No. 466/1987. This order was Page 2155 subsequently modified on 4th April, 1998 with a specific direction that the goods will be sold by the customs department within six months. Similar orders were passed in other cases. These goods were ultimately sold by the custom authorities after a long gap only on 2nd April, 1998.

4. It transpires that when the said goods were in the custody/possession of the appellant under the order of seizure, some of the goods were stolen, which were valued at Rs. 8,37,879/-. The demurrage charges were also sought to be deducted from the sale proceeds, which were objected to by the respondent on the ground that the respondent was not responsible for the delayed sale by the custom authorities. The aforesaid issues were considered by the learned Single Judge under the impugned order dated 6th July, 2004 and the writ petitions filed by the respondent were allowed and a writ of mandamus was issued directing the appellant to reimburse the respondent the amount which would have been realised from the sale of goods stolen from the custody of the appellant be paid to the respondent at the rate at which the goods were sold. It was held that demurrage charges should not be deducted from amount payable to the respondent.

It was also held by the learned Single Judge that the respondent would be entitled to interest @ 7% per annum from the date of the seizure till the date of payment.

5. Being aggrieved by the aforesaid order, the custom authorities have filed the present appeal, on which we have heard the learned Counsel for the parties. Basically two issues arise for consideration before us. Firstly, whether the appellant could be made liable to make good the value of the goods that went missing and were stolen when the said goods were with the custom authorities. On confiscation under Section 126 of the Customs Act, the goods vest with the said authority. When the goods were in custody and possession of the customs department, they were stolen. Admittedly, the goods were covered by a valid license and, therefore, goods could not have been seized. The goods have to be returned to the respondent or the value thereof paid. Since the goods were stolen, while they were in custody of the customs department, they are liable to make good the loss suffered by the respondent.

6. The next issue is with regard to the demurrage charges which was sought to be deducted from the sale proceeds, which would amount to burdening the respondent with demurrage charges.

7. So far as the demurrage is concerned, the order of the Division Bench for sale of the goods was passed sometime in 1987 and 1988. Despite the said orders, the goods were not sold by the custom authorities and ultimately came to be sold only in the year 1998 and in the process demurrage was being charged by the port authority, which is sought to be passed on to the respondent. In view of the aforesaid position, we are of the considered opinion that there was delay in selling the goods even after the orders were passed by this Court and, therefore, the aforesaid burden to pay demurrage charges cannot be fasten on the respondent. Division Bench had passed order dated 4th April, 1988 for sale of the goods to be completed within six months. In these circumstances, we modify the order of the learned Single Judge to the extent that the demurrage charges would not Page 2156 be payable by the respondent for the period after expiry of six months from 4th April, 1988. The appellant will be liable to pay demurrage charges for this period. We also uphold the order of the learned Single Judge for payment of interest on the amount payable to the respondent.

8. The appellant has deposited some amount in this Court. On the basis of calculations to be submitted by the parties within two weeks, the Registry shall disburse the amount to which the respondent is entitled to and the balance amount shall be returned to the appellant.

9. In terms of the aforesaid order, all the three appeals stand disposed of.