2025 (7) TMI 1558 - HC - Customs

Confiscation - penalty - absence of definition of the words antiques and art treasures in Customs Act 1962 - no finding on prohibition on export - jurisdiction of the Customs Officer to decide on the same - goods being well within domestic territory - jurisdiction of customs officials to re-determine the value of goods when once the goods are out of territory - bar on customs authorities from contending that the same were in fact antiques of a value much greater than the value declared. HELD THAT - The Commissioner (Appeals) and the Tribunal have held that the Respondent was not attempting to export the confiscated goods. Now the learned Counsel for the Respondent admits that these confiscated goods are in fact antiques and the Respondent has no intention of exporting them. Further the learned Counsel for the Respondent on instructions states that if these confiscated goods are returned to the Respondent the Respondent will not deal with these goods until the disposal of this Appeal. He further agrees that there is no question of exporting these goods as they are antiques and there is a prohibition on the export of antiques. He maintains that there was never any attempt to export these antiques and the same were confiscated from the Respondent s premises on the false charge that the Respondent was attempting to export the same. The Appellants must prepare a proper inventory follow the usual procedures and hand over these confiscated goods to the Respondent within four weeks from today. There is no point in the Respondents retaining the confiscated antiques pending these appeals as the Respondents have accepted that they are indeed antiques which cannot be exported. Two authorities have held that the allegation that the Respondent was preparing to export these antiques is not established. Regarding the refund of the pre-deposit amount we note that this amount was deposited during the pendency of the Appeals before the Commissioner (Appeals) and remained in place even after the matter was pending before the Tribunal despite the Respondent having succeeded before the Commissioner (Appeals). Now this Appeal is admitted. Therefore the interests of justice would be met if the Appellants are directed to deposit the amount deposited by the Respondent by way of pre-deposit along with accrued interest if any in this Court within six weeks from today. Once this amount is deposited the Registry is directed to invest it in a Nationalised bank so that it will draw interest. The appeals are admitted and the Interim Applications for interim relief are disposed of.

Summary

ISSUES:

Whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) was correct in setting aside the order of confiscation and penalty imposed on the respondent.Whether CESTAT was correct in its observation that in the absence of definitions of the words "antiques" and "art treasures" in the Customs Act 1962, and without primary ascertainment thereof, there can be no finding on prohibition on export and jurisdiction of the Customs Officer to decide on the same.Whether CESTAT was correct in holding that goods being within domestic territory merit no action based on suspicion generated in the minds of customs officials.Whether CESTAT was correct in its observation that once goods are out of the territory, customs officials do not have jurisdiction to re-determine the value of the goods.Whether customs authorities are barred from contending that exported goods were in fact antiques of a value much greater than the value declared.Whether the appeal is maintainable concerning the valuation of goods for assessment purposes.Whether the confiscated antiques should be returned to the respondent pending disposal of the appeal, subject to conditions and undertakings.Whether the pre-deposit amount paid by the respondent should be refunded or deposited with the Court during pendency of the appeal.

RULINGS / HOLDINGS:

CESTAT's setting aside of the confiscation and penalty order is admitted for consideration; the Court has not expressed final opinion on correctness but has admitted the appeal on this substantial question of law.CESTAT's observation that "in the absence of definition of the words 'antiques' and 'art treasures' in Customs Act 1962, and primary ascertainment thereof, there can be no finding on prohibition on export and jurisdiction of the Customs Officer to decide on the same" is a question admitted for adjudication.CESTAT's view that goods within domestic territory merit no action on suspicion alone is admitted for consideration and not finally decided.CESTAT's observation that "once the goods are out of territory, customs officials do not have jurisdiction to re-determine the value of the goods" is admitted for adjudication.Customs authorities are barred from contending that the exported goods were antiques of a value much greater than declared is a question admitted for hearing.The issue of maintainability of the appeal on valuation grounds is kept open at the request of the respondent's counsel.The confiscated antiques shall be returned to the respondent within four weeks, subject to the respondent's undertaking not to deal with the goods until disposal of the appeal, and allowing customs authorities reasonable notice for inspection during pendency.The pre-deposit amount deposited by the respondent shall be deposited by the appellants in Court within six weeks along with accrued interest, to be invested in a Nationalised bank to draw interest pending final disposal.

RATIONALE:

The Court admitted the appeals on substantial questions of law arising from the orders of CESTAT, focusing on jurisdictional and definitional issues under the Customs Act 1962, particularly concerning "antiques" and "art treasures."The Court noted the absence of statutory definitions and primary ascertainment as a key factor affecting the Customs Officer's jurisdiction to prohibit export or impose penalties.The Court accepted the respondent's undertaking that the confiscated antiques would not be exported or dealt with pending appeal disposal, thereby mitigating the risk of unlawful export.The Court balanced the interests of justice by ordering return of confiscated antiques with conditions, recognizing two prior authorities favoring the respondent that the allegation of export attempt was not established.The Court allowed customs inspections with reasonable notice to safeguard regulatory interests during pendency.The Court directed the deposit of the pre-deposit amount with accrued interest in Court to preserve the financial interests of the parties pending final adjudication.No dissent or doctrinal shift was recorded; the Court's approach reflects careful procedural management and adherence to statutory interpretation principles under the Customs Act 1962.