Appeals granted: Revenue to disburse sale proceeds by adjusting penalty only, no redemption fine. Appellants entitled to interest.

The Tribunal allowed the appeals, directing Revenue to disburse the sale proceeds by adjusting only the penalty amount. No redemption fine was to be adjusted. The appellants were entitled to interest on the auction sale proceeds from the date received by Customs until disbursal, as per the Rules.

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Issues:
The issue in these appeals is whether the Commissioner (Appeals) have rightly confirmed the order-in-original, by which the imported rough marble blocks were held liable to confiscation under Section 111(d) with option to redeem on payment of redemption fine and further penalty was also imposed under Section 112 of the Customs Act.

Facts:
The appellants imported rough marble blocks and filed 4 bills of entry during 26.07.2011 to 24.09.2013 at ICD, TKD, New Delhi. The rough marble blocks were restricted goods and could be imported against a specific license. Due to financial difficulty, the appellants could not clear the goods from Customs, stating that they were facing acute financial crunch. The Customs Department issued a show cause notice proposing to confiscate the goods under Section 111(d) and impose a penalty under Section 112. The appellants responded, mentioning they imported against a 'Special Import License' issued by DGFT. The Adjudicating Authority passed orders confiscating the goods with an option to redeem on payment of a redemption fine.

Decision:
The Commissioner (Appeals) dismissed the appeals, confirming the order-in-original, noting that the appellants failed to produce the import license and violated provisions of Section 48 by not clearing the goods within the stipulated period. The appellants appealed to the Tribunal, arguing that the order was in contravention of legal provisions and facts were not rightly appreciated. They also contended that the auction/sale of goods by Revenue during the appeal process was against the principles of natural justice.

Judicial Precedent:
A Larger Bench of the Tribunal had previously ruled in favor of the appellants in similar circumstances, entitling them to sale proceeds reduced by redemption fine and penalty. The Delhi High Court upheld this ruling, stating that the auction/sale of goods during the appeal process was contrary to law. The High Court directed that the appellants were entitled to a refund of sale proceeds reduced only by the penalty, as redemption fine cannot be adjusted when goods are not available for redemption.

Final Decision:
After considering the contentions, the Tribunal allowed the appeals, directing Revenue to disburse the sale proceeds by adjusting only the penalty amount. No redemption fine was to be adjusted. The appellants were also entitled to interest on the auction sale proceeds from the date received by Customs until disbursal, as per the Rules.

[Order pronounced on 18.05.2023]

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