Court refers Customs duty computation to Deputy Commissioner, potential bias concerns, seeks Chief Commissioner involvement. Urgent hearing application disposed.

The court directed the matter to be referred to the Deputy Commissioner of Customs for computation of Customs duty from the sale proceeds in accordance with the Customs Act. Concerns were raised regarding potential bias, leading to a proposal to involve the Chief Commissioner of Customs for impartiality. The application for an urgent hearing was disposed of, pending confirmation of the competent authority for duty computation as outlined in Section 150(2)(c) of the Act.

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Issues:
Application for encashment of fixed deposits from sale proceeds at a bonded warehouse and adjustment of Customs duty.

Analysis:
The applicants, operating a bonded warehouse, sought direction for encashment of fixed deposits from the sale proceeds of unclaimed goods and adjustment of Customs duty as per Section 150 of the Customs Act, 1962. They had obtained court orders for the sale of such goods, and the sale proceeds were kept in fixed deposits with Customs Authorities. The priority of payment from the sale proceeds was outlined in Section 150(2) of the Act.

The applicants had already made payments for expenses related to the sale and were now looking to settle the duty payable on the goods sold. They referred to a judgment emphasizing that Customs duty should be calculated on the sale price, not based on the duty payable at the expiration of the warehouse period. The applicants were entitled to any residual amount after adjusting the duty, which could be used to satisfy their dues.

The respondents argued that the computation of Customs duty should be handled by the competent authority, as per the precedent cited by the applicants. It was suggested that the issue of computation might require factual considerations beyond the court's writ jurisdiction. The court acknowledged the need for the competent authority to determine the duty adjustment in line with the precedent cited.

It was decided that the matter should be referred to the Deputy Commissioner of Customs, Special Disposal Cell, as the competent authority for computing the Customs duty. However, concerns were raised about potential bias if the Deputy Commissioner was to judge his own cause. The applicants proposed referring the matter to the Chief Commissioner of Customs to ensure impartiality. The court scheduled the next hearing for the department to confirm the competent authority for the duty computation as per Section 150(2)(c) of the Act.

In conclusion, the application for urgent hearing was disposed of, pending further clarification on the competent authority for computing the Customs duty from the sale proceeds in accordance with the provisions of the Customs Act.

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