2016 (1) TMI 726 - HC - Customs

Customs officials' unjustifiable delay in releasing seized goods deemed highhanded; court orders inquiry and compensation. Accountability

M/s Overseas Enterprises Versus The Union of India through the Chief Commissioner of Customs (Preventive), The Commissioner of Customs (Preventive), Customs, The Additional Commissioner of Customs (Adjudication), Customs, The Assistant Commissioner of Customs (Preventive), Customs, The Superintendent of Customs (Preventive), Office of Commissioner Customs and The Superintendent of Customs (Adjudication), Customs

The court found the Customs officials' delay in releasing the seized goods unjustifiable and attributed it to their highhandedness. It deemed the actions ... Import of split betel nuts - Writ petition seeking release of split betel nuts - The petitioners asserted that the goods, namely, betel nuts imported by them, were also got tested and nothing spurious was found in the test report of the Export Inspection Agency at Kolkata. - Held that:- Having thus regard to the findings of the adjudicating authority in confiscation proceedings dated 29.11.2013 which also stands fully affirmed by way of dismissal of appeal filed by the department, this Court would find it difficult to accept any of the plea of Custom Department with regard to non-release of the seized articles of the petitioners for a period of nearly one and half year commencing from 28.03.2013 till 09.08.2014. This Court, therefore, would not be required to say anything more about the events which have taken place after releasing of betel nuts on 09.08.2014, inasmuch as, the appeal filed against the adjudicatory final order in confiscation proceedings dated 29.11.2013 was also eventually dismissed on 29.11.2013 some time in November, 2014 which led to return of bank guarantee to the petitioners in view of the order dated 11.11.2014 as quoted above in paragraph no.16 of this judgment. What really amazes this Court is that even after the adjudication in confiscation proceedings were itself dropped, by the final order dated 28.11.2013 when there was no sanction of law under any provision of Customs Act which would have empowered the authorities of the Custom Department to withhold the release of the seized articles of the petitioners inasmuch as the Custom Department and its authorities in fact had no power in law to keep the seized articles in their possession after passing of the final order of adjudication dated 29.11.2013, they still did not release the articles despite the petitioners' application dated 2.12.2013 on a plea that such articles of the petitioners could be released only after the correctness of final adjudicatory order dated 29.11.2013 was accepted by the competent reviewing/appellate authority. This Court again does not find any such provision in the Act which could have enabled the authorities of Customs Department to sit over the final order of adjudication in confiscation proceedings dated 29.11.2013. Thus, having an overall picture this court will have no difficulty in coming to the ultimate conclusion that the petitioners on account of abnormal delay of almost 1½ years caused in release of its seized betel nuts have been put to a perennial loss. Since the authorities themselves had valued and quantified the price of the seized articles, namely, split betel nuts weighing 15.470 M.T. to the tune of ₹ 14,69,650/- on 17.2.2013, the petitioners would become at least entitled to recover this amount from the officials of the Custom Department. By now, the law is well settled that the public officers have to be also held accountable for their acts of omission and commission. Thus, when this Court has found that the petitioners have been put to a loss of at least ₹ 14,69,650/- on account of complete deterioration of quality of split betel nuts solely on account of deliberate laches on the part of the officials of the Custom Department it would direct respondent no.2 to pay a sum of ₹ 14,69,650/- along with interest at the rate of 9% per annum for the period 28.3.2013, the date on which the order of provisional release of the seized article was passed by the competent authority to the order directing release of the seized articles dated 9.8.2014 within a period of three months from today. It is, however, made clear that such amount, which has to be paid by way of compensation for the loss caused to the petitioners on account of delay of nearly 1½ years in release of the seized articles, shall be recovered from the erring officials and for the purposes of fixing individual responsibility on such erring officials this Court would direct the Chairman of Central Board of Excise and Customs Department of Revenue, New Delhi to get an enquiry conducted by an Officer not below in the rank of Chief Commissioner of Customs who must not be posted and/or associated in any manner with Patna Zone of the Custom Department. Decided in favor of appellants. Issues Involved:1. Delay in the release of seized goods.2. Legality of the seizure and subsequent actions by the Customs Department.3. Responsibility and accountability of Customs officials.4. Compensation to the petitioners for the loss incurred.Detailed Analysis:1. Delay in the Release of Seized Goods:The petitioners imported 15.470 MT of processed betel nuts from Bangladesh, which were seized by Customs officials on 16.02.2013. Despite an order for provisional release on 28.03.2013 and a final adjudication order dropping the confiscation proceedings on 29.11.2013, the goods were not released until 09.08.2014. The court found this delay unjustifiable and attributed it to the highhandedness and arbitrary exercise of power by the Customs officials.2. Legality of the Seizure and Subsequent Actions:The seizure was initially justified under Sections 45, 46, and 47 of the Customs Act and Section 11 of the Foreign Trade (Development & Regulation) Act, 1992. However, the court noted that the Customs officials continued to withhold the goods despite the provisional release order and the final adjudication in favor of the petitioners. The court found that the Customs officials' actions, including sending the goods for testing after the provisional release order, were not justified and lacked legal basis.3. Responsibility and Accountability of Customs Officials:The court was critical of the Customs officials' conduct, particularly the delay in releasing the goods and the handling of the provisional release order. The court directed an inquiry to be conducted by an officer not associated with the Patna Zone of the Customs Department to fix responsibility on the erring officials. The court emphasized that public officers are accountable for their actions and should face consequences for their omissions and commissions.4. Compensation to the Petitioners:The court acknowledged the financial loss incurred by the petitioners due to the deterioration of the seized betel nuts during the prolonged delay. The court ordered the Customs Department to pay Rs. 14,69,650/- as compensation along with 9% interest per annum from 28.03.2013 to 09.08.2014. Additionally, the court imposed a cost of Rs. 25,000/- on the Customs Department for compelling the petitioners to file the writ petition.Conclusion:The court found the Customs officials' actions in delaying the release of the seized goods to be arbitrary and unjustified. It directed the Customs Department to compensate the petitioners for their loss and ordered an inquiry to fix responsibility on the erring officials. The judgment underscores the importance of accountability and adherence to legal procedures by public officers.