Tripura High Court
Shri Swadesh Chandra Paul vs Union Of India on 1 February, 2021
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HIGH COURT OF TRIPURA
AGARTALA
W.P (C) 1359 of 2016
Shri Swadesh Chandra Paul
S/o. Lt. Krishnadhan Paul, resident of College Tilla near BBMC College, near
Sishu tirtha school, P.O- College , P.S-East Agartala, District- West Tripura.
-----Petitioner(s)
Versus
1. Union of India
represented by the Secretary, Revenue, Ministry of Finance (North Block), New
Delhi-110001
2. Joint Commissioner of Customs,
North-Eastern Region, Nilamoni Phukan Path, Christian Basti, Guwahati-5,
Assam.
3. Assistant Commissioner of Customs
Agartala Customs Division, Near Mouchak Club, Milan Sangha, Bordwali, P.O &
P.S. A.D. Nagar, Agartala, District-West Tripura.
-----Respondent(s)
For Petitioner(s) : Mr. T.K. Deb, Advocate.
For Respondent(s) : Mr. Bidyut Majumder, Asst. S.G.
Mr. P. Datta, Advocate.
Date of Judgment & Order : 1st February, 2021.
Whether fit for reporting : NO.
_B_E_F_O_R_E_
HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI
HON'BLE MR. JUSTICE S.G. CHATTOPADHYAY
JUDGMENT & ORDER (ORAL)
(Akil Kureshi, CJ)
The petitioner has prayed for a direction to refund the sum of
Rs.22,48,675/- with interest which according to the petitioner was the market
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value of 817 gm of gold as on 27.06.2016, the date on which the petitioner had
applied to the Customs Authorities for releasing the gold as per the decision of
the Customs, Excise and Service Tax Appellate Tribunal (CESTAT for short).
[2] Brief facts are as under:
On a prior information of possible movement of smuggled gold of
foreign origin, the Customs Authorities kept a vigil on Assam-Agartala road in
the evening hours of 12th March, 2004. The Customs Authorities intercepted one
Babul Roy and found on his person, hidden 7 (seven) gold bars weighing 817.700
gm. The gold was seized and the carrier apprehended. Investigation under the
Customs Act, 1962 was carried out. Statements of witnesses under Section 108 of
the Customs Act were recorded. Estimated value of the gold at the time of seizure
was Rs.4,98,797/-. During the investigation it was revealed that the gold belonged
to the petitioner Swadesh Paul. Proceedings for confiscation were initiated by the
Customs Authorities which resulted into the adjudicating authority passing the
order in original providing for confiscation. After one round of remand from the
Tribunal, the competent authority once again passed the order of confiscation
upon which the petitioner preferred appeal before the Appellate Commissioner.
The Appellate Commissioner dismissed the appeal on 16.12.2013 upon which the
petitioner once again approached the CESTAT. The CESTAT passed fresh order
in such appeal of the petitioner on 18.04.2016. The appeal was allowed with
consequential relief. Relevant portion of the order reads as under:
"7. In view of the above settled proposition of law once Appellant Shri
Swadesh Ch. Paul has produced the evidence of licit acquisition of
7(seven) gold bars then an enquiry was required to be made at the end of
Nantu Banik, Pinky Jewellery to refute the claim of the Appellant Shri
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Swadesh Ch. Paul. In the absence of any such investigation claimant
Shri Swadesh Ch. Paul has discharged his burden that 7(seven) gold bars
seized from Shri Babul Roy belonged to him and are not of foreign
origin. The only evidence in the form of first statement of Shri Babul Roy,
which was also subsequently retracted, cannot be made as the sole basis
to hold that the seized gold bars are of foreign origin and smuggled.
8. In view of the above observations, the Appeals filed by the Appellants
are allowed with consequential reliefs, if any."
[3] The department did not challenge the said order of the CESTAT
before the High Court and the order thus became final. The petitioner thereupon
applied to the Assistant Commissioner of Customs on 27.06.2016 and raised the
refund claim of Rs.22,48,675/-. This was on the basis that his appeal was allowed
by the Tribunal. The order of confiscation passed by the competent authority as
confirmed by the Appellate Authority was no longer valid. The gold seized did
not bear any markings. Return of the gold therefore may not be feasible.
According to his calculation, going by the market rate of the gold as on the said
date, total value of 817.700 gm would come to Rs.22,48,675/-.
[4] The Assistant Commissioner of Customs passed an order dated 8th
September, 2016 on the application of the petitioner for refund. He sanctioned
refund of a sum of Rs.8,07,033/- by making following observations:
DISCUSSION AND FINDINGS
"2.1. I have gone through the case records and submission made by the
applicant carefully. In the instant case, Sh. Swadesh Ch. Paul has filed
refund claim of market value of 817.700 gm of gold amounting
Rs.22,48,675/- arising out of Order-in-Appeal No. CA-75230, 75231/14
dtd. 18.04.2016 passed by the Hon'ble CESTAT, Kolkata in c/w the
Seizure Case No. 92/CL/IMP/DPF/AGT/2004 dtd. 12.03.2004 of the DPF
Unit, Agartala. From the record it is seen that at the time of disposal of
gold there was no record available with the Office of pending appeal in
any Appellate forum against said seizure case. Hence, the said gold has
been disposed off observing necessary formality and sale proceed
amounting.8,07,033/- (Rupees eight lakh seven thousand thirty three)
only received on 19.12.2007. Accordingly, claimant has been intimated to
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file claim of sale proceed of the said quantity of gold. The claimant again
submitted refund claim for market value of the seized gold and thereafter
vide his letter received to this Office on 02.08.2016 submitted his
willingness to receive the amount as may be sanctioned representing the
sale proceeds under protest. For sake of natural justice, PH has been
given to the claimant Sh. Swadesh Ch. Paul during P.H. reiterated his
earlier submissions. The Superintendent (A&R), O/o the Commissioner
of Customs (Prev.), NER, Shillong vide letter dtd. 16.06.2016 intimated
that department is not appealing against the said Hon'ble CESTAT order.
2.2 On scrutiny of documents submitted by the claimant and records of
the case. I am of the considered view that claimant Shri Swadesh Ch.
Paul is eligible for refund of sale proceed of the seized 817.700 gm of gold
amounting Rs.8,07,033/- (Rupees eight lakh seven thousand thirty three)
only.
2.3. Keeping the above facts in view I passed the following Order.
ORDER
3.1. I do hereby sanction refund of Rs.8,07,033/- (Rupees eight lakh seven
thousand thirty three) only to Shri Swadesh Ch. Paul, College Tilla, Near
BBMC College, Near Sishutirtha School, Agartala, Tripura (W), for the
reasons as discussed above.
3.2. Certified that no refund order regarding the sum now in question has
previously been passed."
[5] The petitioner received the said refund amount as per the order of
the Assistant Commissioner under protest and thereafter filed this petition.
Learned counsel for the petitioner submitted that the department ought to have
reimbursed the entire market value of the gold on the date of the application for
release and could not have tendered only the original sum notionally realised by
the department upon disposal of the gold in the year 2007. He submitted that even
such disposal was done wholly unauthorisedly. When the gold was disposed of,
the appeal of the petitioner against the order of the Appellate Commissioner was
pending before CESTAT. Ignoring such fact the seized gold was disposed of
without prior notice to the petitioner.
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[6] On the other hand, learned counsel for the department opposed the
petition contending that after appeal period for challenging the order of the
Appellate Commissioner was over the confiscation order achieved finality. There
was no further intimation to the department about the appeal filed by the
petitioner before CESTAT. The department therefore proceeded to dispose of the
goods in accordance with the internal directives.
[7] In the present case, as noted, the order of confiscation of seized
gold bars passed by the competent authority as confirmed by the Appellate
Commissioner was reversed by the CESTAT. However as per the department, the
gold bars were already deposited with the Central Government Mint along with
other quantity of gold seized and which had vested in the Government upon the
confiscation orders becoming final. This happened on 20th November, 2007.
Through such transfer, the Customs Department had realized the sum of
Rs.8,07,033/- which it offered to refund to the petitioner when the final judgment
of the Tribunal was delivered. According to the Customs Department, when the
gold was disposed of, the order passed by the Appellate Commissioner held the
field and the department did not have any intimation of the petitioner's further
appeal before the CESTAT. The petitioner has not disputed this averment of the
department made in the order-in-original passed by the Assistant Commissioner
on 08.09.2016 as well as in the affidavit-in-reply filed in the present petition.
Thus, after having waited for the period of limitation for filing appeal against the
order of the Appellate Commissioner, the department proceeded to dispose of the
confiscated goods. As correctly pointed by the counsel for the department, in
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terms of Section 126 of the Customs Act when any goods are confiscated, the
same would vest in the Central Government. Counsel for the petitioner did not
bring to our notice any material to suggest that when the gold in question was
disposed of by the department, it already had an intimation of the petitioner's
pending appeal before the CESTAT. No procedure for disposal of such
confiscated goods has been brought to our notice by either side. When thus, upon
expiry of the period of limitation for filing appeal against the order of Appellate
Commissioner, the confiscation had achieved finality and in terms of Section 26
of the Customs Act the goods vested in the Central Government, in absence of
any statutory provision requiring in prior notice to the petitioner before disposal
of the goods, the action of the department cannot be faulted.
[8] However, when the order of the competent authority and the
Appellate Commissioner were reversed by the Tribunal, the petitioner had to be
restored to the original position, as closely as possible. The action of the
department to offer to the petitioner the value of the gold as on 20th November,
2007 without any further interest nearly 9 (nine) years later, cannot be approved.
The petitioner therefore, must receive the said principal sum of Rs.8,07,033/-
with interest. We do not think that this amount represents a deposit made by the
petitioner which upon it's refund in terms of Section 129 EE of the Customs Act,
would invite interest at the statutory rates. Here is the case where the
departmental action of confiscation of seized goods came to be set aside by the
CESTAT but by the time the Tribunal passed such an order the goods were
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already disposed of. The petitioner therefore can claim reasonable interest on
such principal sum which must be refunded to him.
[9] In the result, while not accepting the claim of the petitioner for
granting him the market value of the gold on the date of application made by him
to the department, it is provided that the said principal sum of Rs.8,07,033/- will
be paid to the petitioner along with simple interest @ 7.5% per annum from 20th
November, 2007 (i.e. the date on which the valuation of the gold for the purpose
of refund is carried out) till actual payment of the principal sum by the
department. This amount shall be released within a period of 3 (three) months
from today.
[10] Petition is disposed of accordingly. Pending application(s), if any,
also stands disposed of.
(S.G. CHATTOPADHYAY), J (AKIL KURESHI), CJ
Rudradeep
