Court halts disposal of seized goods during appeal, stresses compliance with Customs Act, Circulars.

The court granted a mandamus preventing the disposal of seized goods pending appeal, emphasizing compliance with pre-deposit requirements under Section 129E of the Customs Act. The circulars from the Central Board of Excise and Customs were pivotal in clarifying that no coercive action should occur during appeal proceedings once the pre-deposit is made. The respondent's acknowledgment led to the court's decision to halt any further coercive actions for recovery of disputed dues post-pre-deposit, ultimately disposing of the writ petition without costs.

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Issues:
1. Redemption of seized watches under Section 125(2) of the Customs Act, 1962.
2. Confiscation of watches and penalty imposition by first appellate authority.
3. Filing of appeal before Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and condonation of delay.
4. Threat of disposal of seized goods pending appeal.
5. Interpretation of Section 129E regarding pre-deposit for filing appeal.
6. Circulars issued by the Central Board of Excise and Customs regarding recovery during pendency of litigation.

Analysis:
1. The petitioner company was subjected to a search by the Directorate of Revenue Intelligence, resulting in the seizure of imported watches. An order-in-original was issued granting an option to redeem the watches on payment of redemption fine and differential customs duty under Section 125(2) of the Customs Act, 1962, along with the imposition of a penalty.

2. The first appellate authority, in an appeal filed by the petitioner, ordered absolute confiscation of the watches and confirmed the penalty originally imposed. This decision was challenged by filing an appeal before CESTAT, South Zonal Bench, Chennai, albeit belatedly. The delay in filing the appeal was condoned by CESTAT, allowing the appeal to proceed.

3. Despite the appeal being listed for hearing, the petitioner received a communication threatening the disposal of the seized goods pending the appeal. This prompted the petitioner to file a writ petition seeking a mandamus to prevent the auctioning of the watches until the appeal was disposed of by CESTAT.

4. The court examined the provisions of Section 129E of the Customs Act, which mandates a pre-deposit before filing an appeal. The circulars issued by the Central Board of Excise and Customs clarified the pre-deposit requirements and emphasized that once the pre-deposit is made, no coercive action should be taken for the recovery of any balance of disputed dues during the appeal proceedings.

5. The court noted that the communication threatening disposal of the goods pending appeal had no legal basis, especially in light of the clear instructions from the Central Board of Excise and Customs regarding recovery during the pendency of litigation. The respondent's counsel acknowledged this position and confirmed that the communication would not be pursued further.

6. Consequently, the court granted the mandamus as sought by the petitioner, ensuring that no further coercive action would be taken for recovery of disputed dues once the pre-deposit was made. The writ petition was disposed of without imposing any costs on the parties involved.

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