Home Case Index All Cases Customs Customs + HC Customs - 2019 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 1467 - DELHI HIGH COURTInterpretation of statute - Section 126 of the Customs Act, 1962 - scope of the term 'vest with the Central Government’ occurring in Section 126 (1) of the Act - Can the Central Government retain the excess auction proceeds after adjusting the customs duty, interest, penalty and redemption fine or has such excess amount have to be returned paid to the owner of the goods? HELD THAT:- Under Section 125 of the Act, an option indeed is given to the importer to redeem the goods by payment of fine. A time limit is also set for that purpose. If, as in the present case, the importer fails to avail of that opportunity it leads inevitably to confirming the ‘confiscation’ of the goods and their sale by public auction. Section 126 (1) of the Act spells out the legal effect of such ‘confiscation’. Section 126 (2) of the Act lends a further finality to such vesting. It requires the ‘officer adjudging confiscation’ to mandatorily “take and hold possession of the confiscated goods.” The distinction sought to be drawn between confiscation of ‘prohibited goods’ and of ‘other goods’ is relevant only to the extent of the discretion in the adjudging officer to permit their redemption by payment of fine. Once there is a failure to pay the fine within the time stipulated, the consequence is the same whether the goods are ‘prohibited goods’ or ‘other goods’. The transient nature of the confiscation ends and it becomes ‘absolute’. This is what is made clear by Section 126 of the Act. Sections 125 and 126 of the Act form one continuous scheme and are not to be read disjunctively. Once the vesting of the goods in the government is absolute, it would be inconsistent with the character of that vesting to contend that the Central Government can only recover through the sale of such goods the duty, penalty and interest and should return the excess to the owner/possessor of the goods. The question referred to this Bench is answered in the affirmative by holding that under Sections 125 read with Section 126 of the Act, where the redemption fine in lieu of confiscation is not paid within the time stipulated, the Central Government is entitled to retain the excess auction sale proceeds of the confiscated goods, after adjustment of the duty, penalty, interest and other statutory dues. The central government in such circumstance is under no obligation to return the excess amount to the importer. Petition dismissed.
|