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2012 DIGILAW 391 (PAT)

Ram Kishen Baheti v. Union of India

2012-03-02

S.N.HUSSAIN

body2012
ORDER This writ petition has been filed by the petitioner for directing the respondents to refund the value of betel nuts amounting to Rs.21,33,500.00 along with statutory rate of interest from the date it fell due to its actual date of payment as per order dated 29.08.2001 passed in A-796 to A-799/Kol/2001 by the Central Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as `the CEGAT’ for the sake of brevity). 2. The claim of the petitioner is that on 22.05.1999 a truck was intercepted by the Customs Officers and it was found to be carrying 251 gunny bags of betel nuts having gross weight of 17821 kgs. and net weight of 17068 kgs., whereafter on demand the driver of the truck produced delivery challans along with other relevant transport documents. However, the officers entertained a belief that the value of the betel nuts, shown in the delivery challans, was on the lower side and hence they took opinion of two local traders, who suggested that the betel nuts were of foreign origin and on that basis the said betel nuts and the truck were seized and at the time of seizure it was valued at Rs.21,33,500 and a proceeding bearing Customs Case No. 07/1999 was initiated against the petitioner. 3. Learned counsel for the petitioner submitted that subsequently a show cause notice dated 03.11.199 was issued under section 124 of the Customs Act, 1962 (hereinafter referred to as `the Act’ for the sake of brevity) by the Assistant Commissioner of Customs, Farbisganj Division, answerable to the Commissioner of Customs, in which the petitioner was noticee no.3 along with other persons, who were transporters and traders. In the said show cause notices, the noticees were asked to show cause as to why the betel nuts, valued at Rs.21,33,500.00, and the truck bearing registration no. NL-02A-8027 be not confiscated under the provision of section 111(d) and section 115 of the Act. The said proceeding culminated into order no. 32/CC/ADJ/2001 dated 24.03.2001 directing absolute confiscation of the aforesaid betel nuts valued at Rs.21,33,500.00, with an option to redeem the confiscated truck on payment of redemption fine of Rs.1,00,000.00 and in addition thereof personal penalties were also imposed on the persons against whom the proceeding was initiated. The said order dated 24.03.2001 was issued on 09.04.2001. 4. 32/CC/ADJ/2001 dated 24.03.2001 directing absolute confiscation of the aforesaid betel nuts valued at Rs.21,33,500.00, with an option to redeem the confiscated truck on payment of redemption fine of Rs.1,00,000.00 and in addition thereof personal penalties were also imposed on the persons against whom the proceeding was initiated. The said order dated 24.03.2001 was issued on 09.04.2001. 4. Against the aforesaid order of the Commissioner of Customs, the petitioner and others filed Appeal No. C-167-170/2001 before the CEGAT, Eastern Bench, Kolkata and after hearing both the parties, it was found that the adjudicating authority had proceeded on wrong assumptions and, accordingly, the Member (Judicial) of the CEGAT held that the impugned order of the Commissioner was not sustainable in law and the appeals were allowed vide order dated 30.08.2001 with the consequential reliefs in favour of the appellants. 5. It is also claimed that pursuant to the said order of the CEGAT, the petitioner filed repeated claims for refund of the amount , equal to the seizure value, which was subject of seizure and the Commissioner, Customs, Patna vide his order dated 08.05.2003 accepted the order of the CEGAT and ordered release of goods and refund of penalty/fine imposed upon noticees after taking 100% seizure value bond as the reference application bearing Tax Case No. 26/2002 filed by the Customs Department was pending in the Patna High Court against the order of the CEGAT dated 30.08.2001. 6. It was further averred by learned counsel for the petitioner that the aforesaid Tax Case No.26/2002, filed by the Customs Department, was dismissed by the Patna High Court on 08.09.2006, but inspite of that no step was taken by the authorities for either release of the goods or refund of the amount as per the order of the CEGAT affirmed by the High Court in the said tax case. Hence learned counsel for the petitioner stated that he had no remedy left but to move this Court by way of the instant writ petition for redressal of his grievances. 7. On the other hand, learned counsel for the respondents argued that the release of the articles was not possible merely because the said tax case was pending in the High Court since 2002, whereas, the refund of amount could not be made because the file in question was not traceable. 7. On the other hand, learned counsel for the respondents argued that the release of the articles was not possible merely because the said tax case was pending in the High Court since 2002, whereas, the refund of amount could not be made because the file in question was not traceable. It was also claimed by learned counsel for the respondents that the Commissioner of Customs, while passing his order dated 08.05.2003, was not aware of the fact whether goods were already sold and inspite of the said order the petitioner did not approach the authority with security, hence the petitioner did not abide by that order and for the first time he filed this writ petition in the year 2011 although there was no occasion for the petitioner to sit over the matter for eight years after the order of the Commissioner dated 08.05.2003. 8. Learned counsel for the respondents also averred that the concerned file was not traceable in the department and the authorities took steps for reconstruction of the file only after the filing of this writ petition and it was only then found that the betel nuts were sold for Rs.3,64,000.00, but the date and papers of sale of goods could not be ascertained from the records. 9. Learned counsel for the respondents also stated that no documents were produced with regard to the value of the betel nuts at the time of seizure and the calculation was made merely on the basis of statements, which might vary and hence the seizure lists are never accurate, specially when the authorities came to the conclusion that the goods are of third country origin because in that case calculation could not be made on the basis of the rate of Indian goods. It is also averred on behalf of the respondents that the goods sold is always at the rate lower than the purchase rate and furthermore goods, seized in 1999 might have deteriorated as they were sold several years thereafter. He also averred that the sale proceeds are always to be considered in the circumstances existing on the date of sale and the value mentioned in the seizure panchnama or variance are never considered for such payment. In support of his claim, learned counsel for the respondents relied upon a decision of the Supreme Court in case of Northern Plastics Ltd. vrs. In support of his claim, learned counsel for the respondents relied upon a decision of the Supreme Court in case of Northern Plastics Ltd. vrs. Collector of Customs & Central Excise, reported in 2000(1) S.C.C. 545 . 10. Considering the arguments of learned counsel for the parties and materials on record, the admitted facts are that the betel nuts in question and the truck, on which they were carried, were seized on 24.05.1999, whereafter order of confiscation was passed on 16.04.2001, against which the petitioner filed an appeal before the Appellate Tribunal, which allowed the appeal on 30.08.2001 and set aside the order of confiscation. Against the said order, the Customs Department filed Tax Case No. 26/2002, which was dismissed by this High Court vide order dated 08.09.2006 after holding that no substantial question was involved in that case. The said order of the High Court was never challenged by the respondents and hence it attained finality. 11. It is also an admitted fact that the order passed by the Appellate Tribunal setting aside the order of confiscation was never stayed by the High Court in the aforesaid tax case, rather the Commissioner, Customs, Patna vide order dated 08.05.2003 accepted the aforesaid order of the Appellate Tribunal dated 30.08.2001. In the aforesaid circumstances, any step taken by the authorities in violation of order dated 30.08.2001 passed by the Appellate Tribunal is bound to prove that they had committed illegalities and also disobedience of the orders of the higher authorities, which necessitated legal action against them. 12. From the aforesaid facts and materials on record, it cannot be disputed that according to the seizure list prepared at the time of seizure of the betel nuts by the authorities, its value was given by the authorities themselves as Rs.21,33,500.00. Similarly, in the confiscation notices sent to the noticees including the petitioner, the value of the seized betel nuts was shown to be the same. The said confiscation proceeding culminated into the order of absolute confiscation dated 24.03.2001 and in the said order also, the value of the confiscated betel nuts was given as Rs.21,33,500.00. Furthermore, even in the appeal filed by the petitioner against the aforesaid order of confiscation, no claim was raised by the respondents therein that the value of the confiscated betel nuts was less than Rs.21,33,500.00. Furthermore, even in the appeal filed by the petitioner against the aforesaid order of confiscation, no claim was raised by the respondents therein that the value of the confiscated betel nuts was less than Rs.21,33,500.00. Similarly, in the tax case filed by the respondents before the High Court against the appellate order, it was nowhere claimed that the value of the confiscated betel nuts was not Rs.21,33,500.00 and the said tax case was dismissed by a Bench of this Court on 08.09.2006. In the meantime also, the Commissioner, Customs, Patna accepted the order of the Appellate Tribunal and not even a single word was stated regarding any error in the valuation or depreciation of the value or even deterioration of the goods, rather the appellate order was accepted in toto. Thus, it is quite apparent that the authorities have never objected to the valuation of the goods at the time of seizure or confiscation, nor any such objection was subsequently also raised by them. Only after 12 years of the seizure of the goods, such objections are sought to be raised for the first time in the instant writ petition. 13. Furthermore, the claim of the respondents that the betel nuts were arbitrarily valued at the time of seizure or there was any depreciation in its value or its condition had deteriorated, has not been supported by any material whatsoever and hence mere bald and baseless statements made in the counter affidavit cannot legally dismantle the specific claim of the petitioner. The Apex Court in case of Northern Plastics Ltd. vrs. Collector, Customs & Central Excise, reported in 2000(1) SCC 545 had specifically held that if the authorities had sold the seized articles at any price whatsoever they would be liable to pay the market price as assessed at the time of seizure and not the auction price if the order of confiscation is set aside by the Court. The aforesaid case law has been followed by this Court in several cases, including in case of M/s Sharda Plastic Industries and another vrs. Union of India and others, reported in 2002(2)PLJR 82, in case of Jitendra Bothra vrs. The aforesaid case law has been followed by this Court in several cases, including in case of M/s Sharda Plastic Industries and another vrs. Union of India and others, reported in 2002(2)PLJR 82, in case of Jitendra Bothra vrs. Union of India & Ors, reported in 2004(2)PLJR 807 and in case of Dwarika Prasad Agrawal vs. Union of India & Ors., reported in 2006(4) PLJR 166 as well as in an earlier unreported judgment of this Court dated 07.04.1999 passed by a Bench of this Court in Cr.W.J.C. No. 571/1998 (Kailash Rai vs. Union of India and others). 14. Although learned counsel for the respondents had claimed that betel nuts were sold by the Custom authorities for Rs.3.64 lacs, but neither any document has been produced by the respondents nor even the date of such auction sale has been disclosed. In any view of the matter when the order of confiscation dated 16.04.2001 had been set aside by the CEGAT, Kolkata by order dated 30.08.2001, there was no occasion at all for the authorities to dispose of the confiscated betel nuts as it was their duty to return them to the petitioner, specially when the said appellate order was never stayed by the High Court in Tax Case No. 26/2002, which was filed by the Customs Department against the aforesaid order of the CEGAT dated 30.08.2001. 15. In any view of the matter, a procedure is prescribed under the Act, which also provides a notice to the persons concerned before such sale of the confiscated goods, which is mandatory in nature. Furthermore, after the order passed by the Appellate Tribunal, the goods in question did not remain confiscated goods and hence there was no occasion for its sale by the authorities. Thus, it is clear that for some nefarious intention of jeopardizing the claim of the petitioner and for personal aggrandizement of the officers concerned, the betel nuts in question were sold in a haste post haste manner by some officers of the department, who some how got the entire file vanished to conceal their illegal acts and save their skins from any future action. 16. 16. It may be noted that the Appellate Tribunal, while allowing the petitioner’s appeal by order dated 30.08.2001, specifically held that the adjudicating authorities had wrongly proceeded to hold that the betel nuts were of foreign origin merely on the basis of the trade opinion although it had been a settled proposition that such trade opinion cannot be made the basis for conclusively holding the betel nuts to be of foreign origin. It was also held that the betel nuts were non-notified items under the provisions of section 123 of the Act and as such the onus to prove that they were smuggled was squarely upon the revenue authorities, but no evidence was produced on record by the Department with respect thereto. It was further held that on the contrary, the betel nuts in question were covered by challans, which were, admittedly, produced by the driver at the time of interception of the truck and they specifically proved that the betel nuts in question were not of foreign origin, rather they were merely transported from one place of India to another place of India. 17. Considering the aforesaid facts and circumstances in their entirety, this writ petition is allowed and the Commissioner of Customs (P), Patna as well as the Assistant Commissioner (Refunds), Custom Headquarter, Patna are hereby directed to refund the aforesaid amount of Rs. 21,33,500.00 along with statutory interest (compound) at the rate of 6% per annum with effect from 30.08.2001, the date on which the petitioner’s appeal was allowed by the Appellate Tribunal till the actual date of payment. The said payments must be made by the said authorities to the petitioner within two months from the date of receipt/production of a copy of this order, failing which, they will have to face serious legal consequences. 18. However, the Customs Department will be at liberty to initiate a proceeding against its employees/officers, who are found to be responsible for sale of articles, loss of public exchequer and also for making the concerned file traceless and recover the loss to the Department from their pockets apart from punishing them for their aforesaid misdeeds.