TMI Blog2022 (9) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... if the goods are confiscated absolutely or the option of redemption has not been exercised by the importer, in terms of section 150, such goods must be sold and the duty has to be recovered from the sale proceeds. Thus, goods which are confiscated and which are not allowed to be redeemed or which have not been redeemed vest in the Central Government and the officer adjudicating the case has to take their possession. Whether in the factual matrix of this case, the demand of differential duty and confiscation of the goods and imposition of penalties are sustainable? - HELD THAT:- Undisputedly, the process prescribed under section 138B was not followed by the Commissioner with respect to the statements. Therefore, the statements are not relevant to this case on this ground alone. Further, the statements have also been retracted later. Thus, if the statements are removed, what is left are the loose labels found in the warehouse and the price lists found in the warehouse. There is nothing on record to show that the price labels were affixed to the imported goods and sold in the market or offered for sale in the market at the higher prices or that the price list was sent to the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Show Cause Notice [ SCN ] dated 19.08.2005 was issued by the Additional Director General of DRI proposing to reject the declared RSP and reassess the Additional Duty of Customs on the imported goods as per the RSP in the loose labels found in the warehouse and recover differential duty and also to confiscate the goods under section 111 (d) (m) of the Customs Act and impose penalties. The SCN was adjudicated by the Commissioner and the impugned order was passed the operative part of which is as follows: (i) I order confiscation of goods imported by M/s Linear Technologies India Pvt Ltd. for a total value of Rs. 1,09,69,543/- (value of seized goods) under Section 111(d) and (m) of the Customs Act, 1962 due to mis- declaration of actual transaction value. However, the same are allowed to be redeemed on payment of redemption fine of Rs. 15,00,000/- (Rupees Fifteen Lacs Only) under section 125 of the Customs Act, 1962. The remaining balanced goods valued at Rs. 1,23,54,583/- are not physically available at this stage, therefore, I refrain from passing orders regarding confiscation of the said goods and redemption thereof under Section 125 of the Customs Act, 1962. (ii) I orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lastics vs. Commissioner of Central Excise [ (1998) 6 SCC 443 ] (vi) Perfect Trading Company vs. Commissioner of Customs, New Delhi [ 2001 SCC Online CEGAT 413 ] (vii) Union of India vs. Kisan Ratan Singh [ 2020 SCC Online Bom 39 ] 8. He further submits that the rejection of the declared RSP and redetermination of the RSP based on loose labels and the price lists found in the warehouse is itself not sustainable. There is no evidence that the importer had either declared higher RSP in the market or sold any goods at such prices. There is no evidence that the price list was circulated in the market or that the price tags were affixed to the goods and displayed for sale in the market. 9. As far as the statements recorded under section 108 of the Act are concerned, he submits that these were recorded under coercion and were retracted by Shri S K Kohli on 23.02.2005 and by Shri P K Sood on 05.05.2005. This fact was also argued before the Commissioner who, however, relied on the retracted statements and passed the impugned order. Therefore, not only the redetermination of the duty but also the confiscation of the goods and imposition of penalties are also not susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for. Consequently, the penalties were correctly imposed. 14. We have considered the submissions on both sides and perused the records. The questions which we need to answer in this case are: a) If the goods are confiscated and allowed to be redeemed but have not been redeemed, will the importer still be liable to pay the differential duty? b) In the factual matrix of this case, was the rejection of the declared RSP and redetermination of the additional duty of customs based on the RSP found in the loose labels and price lists recovered from the warehouse of the importer is justified? c) Consequently, can the confiscation of the goods under section 111(d) 111(m) be sustained? d) Can the imposition of penalties be sustained? 15. We find that as per section 125 (2), if the goods are redeemed by the owner or the person from who they are seized, such person shall, in addition to the redemption fine, pay duty on the goods. Evidently, if they are not redeemed, payment of duty in addition to fine shall not apply. If the goods are not redeemed, on confiscation, the goods vest with the Central Government as per section 126 of the Act. Sections 125 and 126 read as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the goods. This section further lays down that this charge will apply to goods owned by the Government as they apply to other goods. Section 12 reads as follows: Section 12. Dutiable goods . - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India . (2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government . (emphasis supplied) 17. Thus, even if the goods vest in the Government, duty has to be paid on them. Evidently, if the Government becomes the owner it has to pay the duty. A few illustrations will make this legal position clear. a) If goods are imported by the Government, it pays the Customs duty. b) If goods are imported and then the importer relinquishes its title to the goods, as per section 23(2) the importer does not have to pay duty. The title of the goods moves to the government and along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such manner as the Central Government may direct. Explanation. - In this section, arms and ammunition have the meanings respectively assigned to them in the Arms Act, 1959 (54 of 1959). 18. The Central Board of Excise and Customs instructions on disposal of unclaimed or un-cleared cargo are contained in paragraph 3 of Chapter 20 of the Customs Manual 2018 and the portion related to application of sale proceeds and the corresponding section 150 are as follows: Customs Manual 2018 Chapter 20- Disposal of unclaimed or uncleared cargo ..... 3. Procedure for sale of unclaimed/uncleared goods: ... 3.3 The sale proceeds of the auction shall be disbursed as per Section 150 of the Customs Act 1962. Section 150. Procedure for sale of goods and application of sale proceeds. - (1) Where any goods not being confiscated goods are to be sold under any provisions of this Act, they shall, after notice to the owner thereof, be sold by public auction or by tender or with the consent of the owner in any other manner. (2) The proceeds of any such sale shall be applied - (a) firstly to the payment of the expenses of the sale, (b) next to the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in Fortis Hospital Limited vs. Commissioner of Customs, Import [ 2015 (318)ELT 551 (SC) ] as follows: 14. Notwithstanding the aforesaid position, as pointed out above, the Department is taking shelter under the provisions of sub-section (2) of Section 125 of the Act. However, on a plain reading of the said provision, we are of the view that such a provision would not apply in case where option to pay fine in lieu of confiscation is not exercised by the importer. Trigger point is the exercise of a positive option to pay the fine and redeem the confiscated goods. Only when this contingency is met, the duty becomes payable. In the present case, admittedly, such an option was not exercised and the confiscated machinery was not redeemed by the Institute. As a matter of fact, thus, no fine has been paid. 16. Indubitably, unless an option is exercised, fine does not become payable. Sub-section (2) of Section 125 uses the expression imposed by stating where any fine in lieu of confiscation of goods is imposed . In Black law dictionary (Tenth edition), the word 'impose' is defined as To levy or exact (a tax or duty) . Thus, it has to be a levy or exact which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, - (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court. 23. Undisputedly, the process prescribed under section 138B was not followed by the Commissioner with respect to the statements. Therefore, the statements are not relevant to this case on this ground alone. Further, the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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