Unauthorized auction of seized imported goods during appeal is invalid, with restitution of assessed value and interest available.

Seized imported goods cannot be auctioned by the department during pendency of adjudication or appeal without prior notice to the importer or permission of the forum seized of the matter; such disposal is impermissible and invalid. Where the department sells the goods in breach of that procedure, it cannot retain the benefit of its own wrong, and restitution of the assessed value becomes appropriate. The appellate forum may direct refund of the assessed value with interest for the period of deprivation. The impugned sale was therefore treated as invalid, and the importer was held entitled to restoration of the assessed value with interest.

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Issues: (i) whether the department could auction the seized imported goods during pendency of the appeal without prior notice or permission of the appellate forum and whether such sale was valid; (ii) whether the appellant was entitled to restitution of the assessed value of the goods with interest.

Issue (i): whether the department could auction the seized imported goods during pendency of the appeal without prior notice or permission of the appellate forum and whether such sale was valid

Analysis: The goods were sold while the appeal was pending and without prior notice to the importer or permission from the forum seized of the matter. The seized goods were no longer available for assessment or redemption, and the dispute on undervaluation was therefore not taken up for decision. The settled position applied by the Tribunal is that goods under adjudication or appeal cannot be disposed of by the department on its own during pendency of proceedings, and such disposal without notice is impermissible.

Conclusion: The auction and consequential disposal were held invalid.

Issue (ii): whether the appellant was entitled to restitution of the assessed value of the goods with interest

Analysis: Once the department had sold the goods for a nominal amount during pendency of proceedings and without following the required procedure, it could not retain the benefit of its own wrong. The Tribunal applied the principle that the importer is entitled to the value assessed by the department, and that the appellate forum may exercise inherent powers to secure the ends of justice and direct refund/restoration with interest. The earlier assessment value was treated as the basis for restitution, and interest was directed to be quantified and paid for the period of deprivation.

Conclusion: The appellant was held entitled to refund of the assessed value of the goods with interest.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and the department was directed to restore the assessed value of the imported goods with statutory interest.

Ratio Decidendi: Seized goods cannot be auctioned by the department during pendency of adjudication or appeal without prior notice and permission of the forum seized of the matter, and if such sale is made, the importer is entitled to restitution of the assessed value with interest.

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