Customs Commissioner's Appeal Dismissed for Seized Watches - Tribunal Stresses Fairness

The Writ Appeal filed by the Commissioner of Customs against the order to forbear auctioning seized watches was dismissed. The Tribunal highlighted concerns about adverse orders in appeals, emphasizing that the respondent should not be disadvantaged. The Department was directed not to dispose of the seized goods during the appeal process and to comply with Circular guidelines on recovery proceedings. The judgment emphasized awaiting the Tribunal's decision and refraining from coercive action against the respondent.

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Issues:
1. Appeal against order for auctioning seized watches.
2. Confiscation of foreign-made watches under Customs Act.
3. Appeal process before First Appellate Authority and Tribunal.
4. Legal question of adverse order in appeal.
5. Department's steps to dispose of seized goods during appeal.
6. Compliance with Circular on recovery proceedings during litigation.

Issue 1: Appeal against order for auctioning seized watches
The Writ Appeal was filed by the Commissioner of Customs against the order to forbear auctioning 178 watches seized from the respondent until the appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) against the Order-in-Appeal, dated 05.12.2019.

Issue 2: Confiscation of foreign-made watches under Customs Act
The Original Authority directed the confiscation of 178 foreign-made watches under Sections 111(d) and 111(m) of the Customs Act, 1962, revalued at Rs. 79,03,440 with an option for redemption on payment of a fine and Customs Duty. The respondent appealed, leading to differing decisions by the First Appellate Authority and Commissioner of Customs, resulting in the matter being taken to the Tribunal.

Issue 3: Appeal process before First Appellate Authority and Tribunal
The appeal process involved questioning the correctness of the order, including revaluation, redemption fine, Customs Duty, and penalty. The Tribunal directed the matter to be heard before a Division Bench in November 2021, raising the legal question of whether an adverse order can be passed against the respondent in the appeal.

Issue 4: Legal question of adverse order in appeal
The judgment highlighted the concern that the respondent should not be put in a disadvantageous position in their appeal, emphasizing that the respondent cannot be worse off in their own appeal before the First Appellate Authority. The Tribunal was identified as the appropriate forum to address this issue.

Issue 5: Department's steps to dispose of seized goods during appeal
The Department's attempt to dispose of the seized watches during the appeal process was deemed inappropriate, especially considering the pending Tribunal hearing. The Department was directed to await the Tribunal's decision and refrain from auctioning the seized goods.

Issue 6: Compliance with Circular on recovery proceedings during litigation
The judgment referenced Circular No.1053/2/2017-CX, which outlines guidelines for recovery proceedings during litigation. The respondent's compliance with pre-deposit conditions for the appeal before CESTAT prevented the Department from initiating recovery proceedings based on the Order-in-Appeal.

In conclusion, the Writ Appeal was dismissed, with directions for the Department not to take coercive action against the respondent, retain the seized watches, await the Tribunal's decision, and comply with the legal process.

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