2025 (8) TMI 1412 - HC - Customs

Department to accept Order-in-Appeal within four weeks; applicant to collect seized gold bars and attend hearing on 27 August 2025.

Mir Fasil Khurseed Versus Commissioner of Customs & Anr.

Mir Fasil Khurseed Versus Commissioner of Customs & Anr. - 2025:DHC7233 - DB ISSUES PRESENTED AND CONSIDERED 1. Whether delay in adjudication of an appeal by the Appellate Authority against an Order-in-Original justifies judicial directions for expedited hearing and ancillary relief (including consideration of waiver of warehouse charges). 2. Whether the Appellate Authority can modify an Order-in-Original that ordered confiscation with option of redemption and instead permit release for re-export on payment of redemption fine and maintain penalties under the Customs Act. 3. Whether, on remand for reassessment of value of a seized article, the adjudicating authority is required to afford a hearing to the passenger before passing the reassessment order. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Delay in adjudication of appeal; judicial power to direct expedition and ancillary relief Legal framework: Writ jurisdiction to ensure timely adjudication of statutory appeals and to protect rights affected by administrative delay; courts may issue directions to expedite proceedings and to consider specific reliefs (e.g., waiver of storage/warehouse charges) where delay causes prejudice. Precedent Treatment: No specific precedent was applied or discussed in the judgment; the Court exercised supervisory jurisdiction in the facts presented. Interpretation and reasoning: The Court found substantial delay in deciding the departmental appeal against the OIO. Given the prejudice to the passenger (continued detention of goods and accruing consequences), the Court directed the Appellate Authority to hear the appeal at the earliest and dispose of it within two months, and expressly directed that the appellate authority consider the petitioner's submissions regarding waiver of warehouse charges. The direction was tied to the principle that administrative delay cannot justify indefinite deprivation of property or rights and that appellate process must be effective. Ratio vs. Obiter: Ratio - The Court's direction that an appellate authority must hear and decide the appeal within a fixed reasonable period where delay causes prejudice, and must consider waiver of warehouse charges where raised due to delay. Obiter - No further general rule on fixing timelines for all appeals was laid down beyond the facts. Conclusions: Judicial intervention to prescribe expedition and to require consideration of waiver of warehouse charges was warranted by delay and potential prejudice; the appellate authority must comply with such directions in similar circumstances. Issue 2 - Appellate modification of confiscation and redemption orders; powers to permit release for re-export and impose redemption fine/penalty Legal framework: Appellate authority under Customs law has power to entertain appeals against Orders-in-Original and to confirm, modify or set aside orders, including orders of confiscation, redemption and imposition of penalties under relevant provisions (including sections dealing with confiscation, redemption under Section 125 and penalties under Section 112 etc.). Precedent Treatment: No precedents were cited or relied upon in the Court's oral judgment; the appellate order itself set out the modification. Interpretation and reasoning: The Appellate Authority, on examining the matter, partially allowed the departmental appeal by permitting release of the four gold bars for re-export on payment of a redemption fine (increased from the OIO's amount) while upholding the penalty. The Court observed that the Department accepted the Order-in-Appeal; accordingly, the Court directed that the Order-in-Appeal be given effect to within a specified time and that the petitioner appear to take release in conformity with that order. The reasoning reflects the proposition that the appellate authority may adjust reliefs (release, redemption fine, penalties) based on its reassessment of facts and law and that acceptance by the Department renders the appellate determination operative subject to compliance. Ratio vs. Obiter: Ratio - An appellate authority may lawfully modify an order of confiscation by permitting release for re-export on payment of redemption fine and can maintain penalties under the Act; compliance with appellate directions is enforceable by the Court. Obiter - No broader principle altering statutory scheme was propounded. Conclusions: The Appellate Authority validly altered the relief vis-à-vis the gold bars (release for re-export on payment of redemption fine) while preserving penalties; the Court will direct implementation where the Department accepts the appellate order. Issue 3 - Remand for reassessment of value and right to hearing before reassessment Legal framework: Procedural fairness under the Customs adjudicatory process requires that an affected person be afforded opportunity of personal hearing before an authority takes an adverse decision affecting confiscation, valuation or reassessment; statutory powers to reassess value must be exercised after giving the affected party opportunity to be heard. Precedent Treatment: The judgment did not cite authorities but applied established principles of fair hearing in administrative adjudication. Interpretation and reasoning: The Appellate Authority remanded the matter of the seized watch back to the Adjudicating Authority for adjudication after re-assessment of its value. The Court, while giving effect to the Appellate Authority's order (as accepted by the Department), expressly directed that the Department provide a hearing to the petitioner on the date fixed for release of the gold bars before passing the reassessment order in respect of the watch, and left all rights and contentions open. This underscores that reassessment cannot proceed without affording the passenger a hearing and that the principles of natural justice apply to valuation and reassessment processes. Ratio vs. Obiter: Ratio - Where an appellate authority remands for reassessment of value, the adjudicating authority must afford the affected person a hearing before passing the reassessment order; directions to that effect are obligatory. Obiter - No novel delineation of the scope of reassessment powers beyond requiring a hearing. Conclusions: The remand for reassessment is permissible, but the adjudicating authority must provide a personal hearing to the passenger before passing any reassessment order; the Court retained all rights and contentions for determination at reassessment. Ancillary procedural conclusion The Court, noting acceptance of the Order-in-Appeal by the Department, directed immediate implementation within a short timeframe, fixed a date for personal appearance and hearing (for release of goods and for reassessment proceedings), and disposed of the writ petition and pending applications subject to those directions. This reflects the Court's supervisory role to ensure implementation of administrative appellate decisions and to protect the right to a hearing in subsequent proceedings.