Madras High Court
Unknown vs Shri Vikram Jain @ Veerchand Jain on 29 September, 2021
W.A.No.2451 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 29.09.2021
CORAM :
THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP
W.A.No.2451 of 2021
and
C.M.P.No.15721 of 2021
1.The Commissioner of Customs,
Chennai - III Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
2.The Commissioner of Customs,
Chennai - II Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
3.The Commissioner of Customs,
Chennai - IV Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
4.The Additional Commissioner of Customs,
SIIB, Chennai - III Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
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W.A.No.2451 of 2021
5.The Deputy Commissioner of Customs,
SIIB, Chennai - III Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001. ... Appellants
Vs.
Shri Vikram Jain @ Veerchand Jain
M/s.Navratna, Shop.No.23, No.90, 1st Floor,
Singapore AC Shopping Complex,
Patni Plaza,
Chennai - 79. ... Respondent
Prayer : Writ Appeal filed under Clause 15 of the Letters Patent to set aside
the order in W.P.No.10066 of 2021 dated 23.04.2021.
For Appellants : Mr.A.P.Srinivas
Senior Standing Counsel
For Respondent : Dr.S.Krishnanandh
JUDGMENT
(Judgment was delivered by T.S. SIVAGNANAM, J.)
This Writ Appeal filed by the Commissioner of Customs, Chennai-III,
Commissionerate, is directed against the order, dated 23.04.2021, in
W.P.No.10066 of 2021.
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W.A.No.2451 of 2021
2.The said writ petition was filed by the respondent to forbear the
appellants from auctioning the 178 watches seized from the respondent till
the disposal of the appeal filed by the respondent before the Customs, Excise
and Service Tax Appellate Tribunal (“CESTAT” for brevity) against the
Order-in-Appeal, dated 05.12.2019, passed by the Commissioner of Customs
(Appeals-II), Chennai.
3.The said appeal was preferred by the respondent, challenging the
Order-in-Original dated 24.09.2018, in and by which, the Additional
Commissioner of Customs (Chennai-III), directed confiscation of 178
foreign made watches of various brands under Sections 111(d) and 111(m) of
the Customs Act, 1962 (“the Act” for brevity), revalued the confiscated
watches at Rs.79,03,440/- for the purposes of the Act with an option to
redeem the 178 watches under Section 125 of the Act on payment of
redemption fine of Rs.7,00,000/- and that, on payment of such redemption
fine, the respondent shall pay appropriate Customs Duty under Section
125(2) of the Act on the revalue of the 178 watches and imposed penalty of
Rs.3,00,000/- on the respondent under Section 112(b) of the Act.
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W.A.No.2451 of 2021
4.The respondent, being aggrieved by the order dated 24.09.2018,
preferred appeal before the First Appellate Authority, questioning the
correctness of the order passed by the Original Authority. The appeal filed
by the respondent was disposed of by reversing the Order-in-Original, dated
24.09.2018, and directing absolute confiscation of the seized 178 foreign
brand watches and confirming the imposition of penalty on the respondent.
To be noted that the Original Authority, while passing the order dated
24.09.2018, though in the show cause notice, has proposed to confiscate a
sum of Rs.19,00,000/- which was recovered from the respondent, the
proposal was dropped in the Order-in-Original. In the respondent's appeal
before the Commissioner of Customs (Appeals-II), Chennai, the First
Appellate Authority reversed such decision as well.
5.Aggrieved by the order passed by the First Appellate Authority, the
respondent has preferred an appeal before the Tribunal and we are informed
that the Tribunal has directed the matter to be listed before the Hon'ble
Division Bench during November, 2021.
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W.A.No.2451 of 2021
6.The legal question which may arise before the Tribunal is as to
whether, in an appeal filed by the respondent, aggrieved by the Order-in-
Original dated 24.09.2018, the respondent can be put to a disadvantageous
position, in other words, in an appeal filed by the respondent, can an order
adverse to the interest of the respondent be passed, when admittedly, such
portion of the order was not questioned before the First Appellate Authority.
7.In the case on hand, the Original Authority directed redemption of
the seized goods on payment of redemption fine and appropriate Customs
Duty. The respondent was on appeal before the First Appellate Authority,
questioning the correctness of the entire order, that is, on the revaluation of
the goods, on imposition of redemption fine and payment of Customs Duty
and penalty. The First Appellate Authority, therefore, would be required to
test the correctness of the order passed by the Original Authority and if he
does not agree with the order, he made set aside the order, but the respondent
cannot be worse off in his own appeal filed before the First Appellate
Authority. In any event, this question is required to be agitated before the
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W.A.No.2451 of 2021
Tribunal in the appeal which has been filed by the respondent.
8.During the pendency of the appeal, it appears that the Department
took steps to dispose of the seized watches, which permitted the petitioner to
file the Writ Petition. During the pendency of the appeal before the
CESTAT, it would not be appropriate for the Department to dispose the
seized goods, especially when the Tribunal has directed the appeal to be
heard during November, 2021, and furthermore, the Original Authority has
directed redemption of the seized watches on payment of redemption fine
and appropriate Customs Duty. Therefore, the appellant/Department has to
necessarily await the decision of the Tribunal and abide by the direction that
has been issued by the Tribunal.
9.The learned Single Bench, after taking note of the objections raised
by the appellant, by referring to Circular No.1053/2/2017-CX, dated
10.03.2017, which has laid down guidelines for recovery proceedings during
pendency of litigation, has noted that the Pre-Deposit has been effected by
the respondent while approaching the Tribunal, therefore, the
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W.A.No.2451 of 2021
appellant/Department cannot initiate any recovery proceedings consequent
upon the Order-in-Appeal, dated 05.12.2019.
10.The learned Senior Standing Counsel appearing for the appellants
submitted that the contention which was raised before the learned Single
Bench was that the Circular, dated 10.03.2017, would not be applicable, as
the said Circular deals with recovery during pendency of litigation and the
contention of the Department was that the watches will deplete in value and
because of the electronic items, battery, etc., they are to be treated as
perishable goods and in the event if the goods are not auctioned, the
Department will not be able to recover the Duty, penalty, etc., as the value
will diminish.
11.In our considered view, the effect of the Circular dated 10.03.2017
need not be gone into in the instant case, as the respondent has complied
with the Pre-Deposit condition for preferring the appeal before the CESTAT
and the appeal has been directed to be listed for final hearing before the
Division Bench during November, 2021. Therefore, the steps taken by the
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W.A.No.2451 of 2021
appellant/Department for auctioning the goods have to necessarily be
deferred and await the decision of the Tribunal in the appeal filed by the
respondent.
12.For all the above reasons, the Writ Appeal fails and it is dismissed
with a direction to the appellant/Department not to initiate any coercive
action against the respondent, as the respondent has complied with the Pre-
Deposit condition in terms of 129(E) of the Act and the watches which have
been seized shall continue to be retained as such and not put up for auction
and the appellant/Department shall await the decision of the Tribunal and
abide by the same. No costs. Consequently, connected Miscellaneous
Petition is closed.
(T.S.S., J.) (S.S.K., J.)
29.09.2021
jeni/mkn
Internet : Yes
Index : Yes / No
Speaking order / Nonspeaking order
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W.A.No.2451 of 2021
To
1.The Commissioner of Customs,
Chennai - III Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
2.The Commissioner of Customs,
Chennai - II Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
3.The Commissioner of Customs,
Chennai - IV Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
4.The Additional Commissioner of Customs,
SIIB, Chennai - III Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
5.The Deputy Commissioner of Customs,
SIIB, Chennai - III Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
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W.A.No.2451 of 2021
T.S. SIVAGNANAM, J.
and
SATHI KUMAR SUKUMARA KURUP, J.
jeni/mkn
W.A.No.2451 of 2021
29.09.2021
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