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Gillette India Ltd. Versus Commissioner of Customs & Ors.

2016 (9) TMI 358 - DELHI HIGH COURT

Confiscation of goods - section 111 of the Customs Act, 1962 - option to pay redemption fine - section 125 of the Customs Act, 1962 - demand of duty and interest - Section 61(2) of the Act read with Section 72(b) of the Act - imposition of penalty - section 112 of the act - Extension of warehousing period - Section 61(1) of the Customs Act, 1962 - B/E Nos. 1 and 2 - confiscated goods vesting to the Central Government - Section 126 of the Act - auction of the goods - Held that: - payment of duty, .....

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handed over to the auction purchaser. - As far as B/E No.3 is concerned, the appeal preferred by GIL against the Order-in-Original dated 30th December 2014 is stated to be pending before the CCA. In terms of the Circular No. 711/4/2006 dated 14th February 2006 issued by the CBEC, the Department had to seek the permission of the CCA before proceeding with the auction. Accordingly, the Court directs status quo in respect of the auction of the confiscated goods covered by B/E No. 3 to be maint .....

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auction process initiated by the Department of Customs ( Department‟) in respect of the goods imported by GIL under three Bills of Entry ( B/Es‟). 2. GIL imported 1008 Power Tooth Brushes under B/E No. 5980646 (hereafter B/E No. 1‟) dated 13th February, 2012 in a single consignment and warehoused the said consignment in a public bonded warehouse by executing a Warehousing Bond under Section 59 of the Customs Act, 1962 ( Act‟). 3. GIL imported 300 Power Tooth Brushes unde .....

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nded warehouse for which a Warehousing Bond was executed by GIL under Section 59 of the Act. It is stated that a substantial portion of the said consignment was removed during the warehousing period. However, one portion thereof containing 7680 pieces remained in the warehouse. 5. A request was made by the Petitioner for extending the warehousing period under Section 61(1) of the Act in respect of the aforementioned B/Es. A personal hearing was granted to the Petitioner on 20th December 2013 by .....

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is not paid within time, ownership of the goods will vest with the Central Government in terms of Section 126 of the Customs Act, 1962. It was further stated that after redemption of the goods, GIL would be allowed a one-time clearance of the goods, within 30 days of the receipt of the order, on payment of duty and interest at the applicable rates under Section 61(2) of the Act read with Section 72(b) of the Act thereof. Additionally, a penalty of ₹ 10,000/- was imposed under Section 112 o .....

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n 30th December 2014 the DC (Bond) passed an order confiscating the goods, giving an option to GIL to redeem them on payment of redemption fine of ₹ 50,000/- within 30 days. It was further directed that after redemption of the goods, GIL would pay the custom duty amounting to ₹ 1,58,454/- assessed on the goods lying uncleared and interest thereon at the applicable rates under Section 61(2) read with Section 72(b) of the Act. A penalty of ₹ 15,000/- under Section 112 of the Act .....

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e Petitioner, on the other hand states that he has no information as such on status of the appeal except to the extent that it is still pending before the CCA. 12. GIL states that in respect of the order passed with reference to B/E No. 1 it made payment of the duty, penalty, interest and redemption fine by a challan dated 15th April, 2014 with a delay of 74 days from the expiry of last date of payment. It is however contended that if the period is calculated from the date that GIL received a co .....

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view of the aforementioned payments. 15. On 30th December 2014, GIL addressed a letter to the DC (Bond) seeking permission for ex-bonding of the goods warehoused under B/E Nos. 1 and 2. 16. However on 11th February 2016 an Internal Auction Catalogue was issued offering the goods confiscated under B/E Nos.1, 2 and 3 for auction on 16th February 2016. On 12th February 2016, GIL addressed a letter to the DC (Bond) requesting that the said goods be withdrawn from the auction process. Not receiving a .....

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However, it is clarified that the demand draft (DD) received from the auction purchaser is yet to be encashed and the goods are still lying with the Department. The abovementioned letter sets out in a tabular form, in respect of each of the B/Es, the duty, redemption fine, penalty and the interest as well as the amount for which the goods have been sold. It is clarified by Mr Satish Kumar that the amount collected from the auction purchaser includes the duty, the redemption fine, penalty and in .....

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the importer has already made payment of the duty, interest, penalty and redemption fine (although belatedly but prior to the date of auction), the Department cannot insist on recovering anything more by way of auction sale. He submits that as far as B/E Nos. 1 and 2 are concerned even if an auction sale of the good imported thereunder has taken place, the amount recovered by the Department, in excess of the duty, interest, penalty and redemption fine will have to be handed over to the importer. .....

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ated would cannot be sold by public auction or in any other manner unless notice is issued to the owner of the goods. Further a reference is made to the decision in Kailash Ribbon Factory Ltd. v. Commissioner of Customs &Central Excise 2002 (143) ELT 60 (Del) which mandates that confiscated goods which are the subject matter of an appeal before the Tribunal or Court shall not be auctioned or disposed of without prior written permission or order from the concerned Tribunal or the Court. There .....

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urt is of the view that the present factual situation where the importer has failed to make payment of the redemption fine, duty interest and penalty within the time stipulated in the Order-in-Original, with such Order-in-Original not being challenged, was not present before the Court in MMTC v. Surjit Singh (supra). 22. The question that arises, therefore, is whether notwithstanding that an importer may not have made the payment of the redemption fine duty interest and penalty within the time s .....

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ds? This would in turn require an interpretation of the expression vest in the Central Government occurring in Section 126(1) of the Act. The Court is of the view that the decision of the coordinate Bench in MMTC v. Surjit Singh (supra) cannot be construed as an authoritative pronouncement on the above issue. Yet, since the said decision is being been relied upon by GIL, the Court is of the view that the above issue and incidentally the correctness of the decision of this Court in MMTC v. Surjit .....

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