2025 (5) TMI 1769 - HC - Customs

Condonation of delay in filing and re-filing the appeal - Seeking release of Seized Gold - confiscation - payment of excess custom duty - HELD THAT - Cause shown is sufficient. Accordingly the applications are allowed. Delay of 3 days and 7 days in filing and re-filing the appeal is condoned. The applications stand disposed of. It is clear that the grievances of the appellant were properly appreciated and after applying the provisions of the Instruction no.22/2022-Customs findings were rendered which we find satisfactory. Thus on account of the first grievance of the appellant we find no reasons to differ with the findings rendered by the learned Single Judge and the submission of the appellant are rejected. So far as the argument or grievance in respect of the inquiry or investigation as directed vide order dated 24.02.2023 having not been complied with or the investigations initiated not having concluded is concerned neither the learned Single Judge nor this Court in appellate proceeding can monitor or pass any directions in respect of investigations being conducted by the CBI. Clearly that is not the scope or jurisdiction of the writ Court or the appellate Court exercising extraordinary civil jurisdiction. Thus the same is untenable and rejected. In fact a perusal of the impugned judgment clearly indicates that both the prayers as sought by the appellant in the underlying writ petition stand satisfied. We also find that the learned Single Judge has also granted liberty to the appellant to take appropriate steps in accordance with law for recovery of the additional amount due to him if any. In view of such liberty too no interference is warranted by this Court. The appeal being absolutely bereft of merits is dismissed with pending applications.

The core legal questions considered in this judgment include:

1. Whether the appellant was entitled to the release of seized gold or its equivalent value after payment of redemption fine, penalty, and customs duty.

2. Whether the customs duty should be calculated as per the rate prevailing on the date of arrival/seizure (2013) or on the date of refund/payment (2023), in light of Section 78 of the Customs Act and relevant customs instructions.

3. Whether the appellant was entitled to recover excess customs duty paid due to the calculation method adopted by the respondent.

4. Whether the Court could direct or monitor an independent investigation or inquiry into alleged illegalities committed by the respondent officers, including compliance with prior directions to file status reports and action taken.

Issue-wise Detailed Analysis

Issue 1: Entitlement to Release of Seized Gold or Equivalent Value

Legal Framework and Precedents: The Customs Act, 1962, specifically Section 110, empowers confiscation of goods. Redemption of confiscated goods is subject to payment of redemption fine, penalty, and customs duty. The Court's jurisdiction under writ petitions includes ensuring compliance with lawful orders directing release or refund.

Court's Interpretation and Reasoning: The appellant was allowed to redeem the confiscated gold upon payment of redemption fine and penalty as per the order dated 10.04.2018. The appellant deposited the required amounts but the gold was not released, prompting the writ petition. During the writ proceedings, the respondent admitted that the gold was not traceable and initiated an inquiry, resulting in payment of an equivalent amount to the appellant.

Key Evidence and Findings: The respondent paid Rs. 14,63,618/- to the appellant in lieu of the gold's value as on the date of refund. The learned Single Judge held that the appellant's prayer for release or refund stood satisfied.

Application of Law to Facts: The Court found that the appellant received the equivalent value of the gold and that the payment complied with the directions issued. The appellant's entitlement was thus fulfilled.

Treatment of Competing Arguments: The appellant contended non-release of gold despite payment; the respondent argued compliance by refund. The Court accepted the respondent's position based on payment made.

Conclusion: The appellant's entitlement to release or refund was satisfied by the payment made by the respondent.

Issue 2: Date for Calculation of Customs Duty and Valuation of Gold

Legal Framework and Precedents: Section 78 of the Customs Act provides for the date on which customs duty is to be calculated. Instruction No. 22/2022-Customs dated 06.09.2022, particularly paras 3.1.1 and 3.1.2, governs valuation and refund of seized gold disposed of by the government. A coordinate Bench's judgment was cited supporting the approach of valuation based on the date of transfer to the government agency.

Court's Interpretation and Reasoning: The Court relied on Instruction No. 22/2022-Customs, which mandates that the tariff value and market price of gold be recorded at the time of seizure and that refund calculations be based on the tariff value on the date of transfer of seized gold to the government agency (SPMCIL). The Court emphasized that the appellant's contention that customs duty should be calculated on the date of arrival (2013) was not permissible since the valuation and refund are governed by the instructions.

Key Evidence and Findings: The gold's price increased from approximately Rs. 260 per gram in 2013 to Rs. 630 per gram in 2023. The appellant received payment based on the 2023 valuation, which was higher than the 2013 value. The appellant claimed excess customs duty paid, but the Court found that the increased gold value compensated for this.

Application of Law to Facts: The Court applied the customs instructions and found that the valuation and customs duty calculation on the date of refund was consistent with law and practice. The appellant's claim of excess customs duty was negated by the higher refund amount received.

Treatment of Competing Arguments: The appellant argued for customs duty calculation as on the date of arrival under Section 78, relying on precedent. The respondent relied on the instructions and valuation on the date of refund. The Court sided with the respondent's interpretation.

Conclusion: The customs duty and valuation of gold were correctly calculated as per the date of refund in accordance with Instruction No. 22/2022-Customs, and the appellant's claim for excess customs duty was rejected.

Issue 3: Recovery of Excess Customs Duty Paid

Legal Framework and Precedents: The appellant sought recovery of excess customs duty allegedly paid due to the calculation method adopted. The Court noted the liberty granted by the learned Single Judge to pursue recovery through appropriate legal channels.

Court's Interpretation and Reasoning: The Court observed that the appellant had liberty to take appropriate steps for recovery of any additional amounts due. However, since the overall payment received by the appellant exceeded the claimed excess duty, the grievance was unfounded.

Key Evidence and Findings: The appellant's calculation of excess customs duty was Rs. 3,14,255/-, but the refund amount was higher by roughly Rs. 2.8 lakhs due to increased gold price.

Application of Law to Facts: The appellant's claim for excess customs duty was not substantiated on the facts, and the Court found no cause to interfere.

Treatment of Competing Arguments: The appellant pressed for recovery; the respondent demonstrated compliance and refund exceeding the claimed excess. The Court upheld the respondent's position.

Conclusion: No interference was warranted regarding the claim for excess customs duty recovery; the appellant was granted liberty to pursue legal remedies if any amount remained due.

Issue 4: Direction for Independent Investigation and Compliance with Prior Court Orders

Legal Framework and Precedents: The appellant sought a direction for an independent agency to investigate alleged illegalities and compliance with earlier Court directions to file status reports on action against errant officers.

Court's Interpretation and Reasoning: The Court held that neither the learned Single Judge nor the appellate Court could monitor or direct ongoing investigations by the CBI, as such powers do not fall within the scope of writ or appellate jurisdiction. The Court rejected the appellant's contention that the respondent had not complied with prior directions.

Key Evidence and Findings: The respondent had initiated inquiry and filed a complaint with the CBI. The Court noted that investigations are beyond its supervisory jurisdiction.

Application of Law to Facts: The Court declined to interfere with the investigation process or direct compliance beyond what was already ordered.

Treatment of Competing Arguments: The appellant argued for active Court oversight; the respondent maintained that investigations were underway and beyond Court's supervisory ambit. The Court agreed with the respondent.

Conclusion: The Court refused to interfere with or direct investigations and rejected the appellant's grievance on this ground.

Significant Holdings

"The learned Single Judge in the impugned judgment on the issue of as to on which date the custom duty should be reckoned has given a proper finding on the basis of Instruction no. 22/2022-Customs, particularly para 3.1.1 of the said instruction."

"Clause 3.1.2(i) of the Instructions states that where the seizure is made in the customs area, the calculations shall be based on the value of gold on the date of such seizure."

"Given this fact, the contention that the Petitioner recovered 3.14 lakhs less is incorrect."

"Neither the learned Single Judge nor this Court in appellate proceeding can monitor or pass any directions in respect of investigations being conducted by the CBI. Clearly, that is not the scope or jurisdiction of the writ Court or the appellate Court exercising extraordinary civil jurisdiction."

"The prayers in the present Petition stands satisfied in view of the fact that the payment for the seized gold has already been received by the Petitioner."

"The learned Single Judge has also granted liberty to the appellant to take appropriate steps in accordance with law for recovery of the additional amount due to him, if any."

Core principles established include:

- Valuation and customs duty on seized gold disposed of by government agencies must be calculated as per the date of transfer to the agency, in accordance with Instruction No. 22/2022-Customs.

- Payment of equivalent value of confiscated goods after lawful seizure and penalty satisfies the appellant's entitlement under the Customs Act and judicial orders.

- Courts exercising writ or appellate jurisdiction cannot supervise or direct ongoing criminal investigations conducted by agencies such as the CBI.

- Liberty to pursue recovery of any additional amounts due may be granted but does not warrant interference where the appellant has already received payment exceeding claimed dues.

Final determinations on each issue were in favor of the respondent, dismissing the appeal and upholding the impugned judgment as well-reasoned and in accordance with law and instructions.

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