BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 28/01/2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.(MD)No.3602 of 2007 and M.P.(MD)No.1 of 2007 Syed Julbi ... Petitioner Vs 1.The Commissioner of Customs, Customs Division, No.1, Williams Road, Cantonment, Trichy 620 001. 2.The Joint Commissioner of Customs, Customs Division, No.1, Williams Road, Cantonment, Trichy 620 001. 3.The Joint Secretary, Ministry of Finance, Department of Revenue, Revision Application Unit, 14, HUDCO Vishala Bldg.B Wing, 6th Floor, Bhikaji Cama Place, New Delhi 110 066. 4.The Assistant Commissioner, Office of the Commissioner of Customs, Customs Division, No.1, Williams Road, Cantonment, Trichy. ...Respondents PRAYER Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of certiorarified mandamus, calling for the records of the 4th respondent dated 07.12.2005 in his proceedings C.No.VIII/20/14 2005- Refund and quash the same and further direct the 4th respondent to pay a sum of Rs.3,94,487/- with accrued interest thereon. !For Petitioner ... Mr.K.Govindarajan ^For Respondents ... Mr.Annamalai for R1,R2 and R4 Mr.K.K.Senthilvelan for R3 Assistant Solicitor General :ORDER
The petitioner has filed the present writ petition, challenging the order
of the 4th respondent dated 07.12.2005 and after setting aside the same further
seeks for a direction to return a sum of Rs.3,94,487/- together with accrued
interest.
2. When the matter came up on 11.06.2007, notice was taken on behalf of
the third respondent. Subsequently, on behalf of the respondents 1 and 2,
Mr.Annamalai, learned counsel appears. On behalf of R4, Mr.K.K.Senthilvelan,
learned Assistant Solicitor General took notice.
3. The case of the petitioner was that he went to Sharjha and returned to
India on 25.04.2003 via Trichy Airport. On his arrival, he was intercepted by
the Officers of Directorate of Revenue Intelligence at the arrival lounge of the
Airport. On examining his baggages, it was found that the petitioner had 100
Nos. of Nokia cellphones, 190 Nos. of Samsung cellphones and other accessories
which was valued at Rs.13,28,000/-. The goods seized from the petitioner was
recorded under a Mahazar on 25.04.2003. The petitioner was also arrested for
misdeclaring the goods under the provisions of the Customs Act, 1962. He was
remanded to judicial custody. He was also detained under the provisions of the
COFEPOSA Act for a period of one year due to the detention order.
4. An adjudication proceeding was initiated against the petitioner under
Section 124 of the Customs Act. The petitioner gave a reply to the Show Cause
Notice and attended a personal hearing. At the end of the adjudication
proceedings, the second respondent passed an order confiscating the entire goods
under seizure and imposed a penalty of Rs.3,00,000/- against the petitioner.
The petitioner preferred an appeal before the first respondent, Commissioner of
Customs, Trichy, who rejected his appeal. Aggrieved by the order of
Commissioner of Appeals as well as the second respondent, confiscating the
goods, the petitioner preferred a review application before the third
respondent. After hearing the petitioner (through his counsel), the third
respondent held that the subject goods were non-prohibited goods and they can be
allowed to be re-exported by the petitioner or through his authorised
representative on redemption fine of Rs.2.25 lakhs. After getting an order
passed by the Revisional Authority, the petitioner through his counsel send a
notice requesting permission to return the goods after paying the redemption
fine and penalty.
5. The first respondent sent the impugned letter dated 07.12.2005
informing the petitioner that he is entitled to redeem total sale proceeds of
Rs.11,83,460/-. He was informed that the mobile phones confiscated by
notification dated 12.11.1998 under Section 110 of the Customs Act were disposed
of in view of their perishable nature and their depreciation with the passage of
time and in accordance with Section 110(1B) of the Customs Act and pursuant to
the order passed by the Judicial Magistrate dated 21.05.2003. The petitioner was
informed that he was entitled to redeem the total sale proceeds of
Rs.11,83,460/- on payment of appropriate customs duty of Rs.3,94,487/-, which is
50% of the accessable value of Rs.7,88,973/- as well as the redemption fine of
Rs.2,25,000/- and a penalty of Rs.3,00,000/-. Thereafter, adjusting the amount,
he was informed that he is bound to pay a sum of Rs.2,63,973/-.
6. The petitioner contended that the 4th respondent ought not to have sold
the goods without waiting for the legal remedy available to the petitioner and
the question of payment of any duty on the goods sold by the 4th respondent was
illegal. A further levy of customs duty on the petitioner was unwarranted.
7. The 4th respondent has filed a counter affidavit dated 07.09.2007
together with typed set of papers. The order passed by the Judicial Magistrate
No.I, Tiruchirapalli in C.M.P.No.3767 of 2003 dated 21.05.2003 permitting the
Directorate of Revenue Intelligence (DRI) to sell the goods was also produced.
A notification issued under Section 110 of the Customs Act showed that in The
Schedule, Cellular phones have been included as perishable goods. It was stated
that under Section 128 of the Customs Act, a person aggrieved by an order passed
by an officer of customs lower in rank than a Commissioner of Customs has a
remedy by way of appeal to the Commissioner (Appeals) within 60 days. The
petitioner has not availed the said remedies.
8. In paragraphs 5 and 7 of the counter affidavit, it was averred as
follows:-
5.As the goods were not in hand of the Department and they were already disposed
off as per Section 110(1A) of the Customs Act, the respondent issued an order
under C.No.VIII/20/14/2005-Refund, dated 07.12.2005 for refund of Rs.2,63,973/-
i.e. the sale proceeds of the goods after deducting the redemption fine of
Rs.2.25 lakhs, penalty of Rs.3,00,000/- and Customs duty of Rs.3,94,487/-
leviable on the goods as per section 125 of the Customs Act, in obeyance to the
above order of Ministry of Finance. The petitioner filed refund application for
Rs.2,63,973/- only. The said refund amount of Rs.2,63,973/- was received by the
party on 13.12.2005 without any protest.
7.The petitioner has also stated that there is no question of any duty on the
goods which were sold by the 4th respondent and the levy of Customs duty of
Rs.3,94,487/- on the petitioner is unwarranted. It is respectfully submitted
that the goods were sold as per the provisions of Section 110(1A) taking into
consideration, the depreciating nature of its value, if it is prolonged to be
kept in the godown. Thus, the intrinsic value of the cell phones was protected
by disposing of the same under Section 110(1A) of the Customs Act, 1962. If the
cell phones were to be disposed now, it could fetch much lower value. The only
option to the department is to refund the sale proceeds (i.e cum duty price)
after deduction of duty, fine and penalty which is a statutory liabilities under
the provision of Customs Act and the procedure laid down in the Act is legally
carried over. Hence, the contention of the petitioner is legally untenable.”
9. In the light of the stand taken by the respondents, this Court is not
inclined to entertain the writ petition. If the petitioner is so aggrieved, he
can always filed an appeal to Commissioner (Appeals) under Section 128 against
the impugned order. Hence, the writ petition stands dismissed. No costs.
Consequently, connected miscellaneous petition is closed.
svki
To
1.The Commissioner of Customs,
Customs Division,
No.1, Williams Road,
Cantonment,
Trichy 620 001.
2.The Joint Commissioner of Customs,
Customs Division,
No.1, Williams Road,
Cantonment,
Trichy 620 001.
3.The Joint Secretary,
Ministry of Finance,
Department of Revenue,
Revision Application Unit,
14, HUDCO Vishala Bldg.B Wing,
6th Floor, Bhikaji Cama Place,
New Delhi 110 066.
4.The Assistant Commissioner,
Office of the Commissioner of Customs,
Customs Division, No.1, Williams Road,
Cantonment, Trichy.