2026 (4) TMI 84 - HC - Customs

Release of seized customs goods for re-export cannot be withheld once duty and penalties are deposited and no stay exists.

Where customs duty and penalties under the operative adjudication and appellate orders had been deposited, and no stay of the appellate order was in ... Entitlement for the goods to be released for re-export after the duty and penalties imposed under the adjudication and appellate orders had been deposited - Binding effect of appellate orders - Absence of stay on pending departmental appeal Release of confiscated goods on payment of redemption fine, duty and penalty - The case of the petitioner is that once the Order-in-Original was complied with, there was no warrant in the Department not releasing the goods in question. - HELD THAT:- The Court proceeded on the undisputed position that the Order-in-Original, as modified by the appellate authority, continued to bind the departmental officers, and that the duty and penalties payable thereunder had already been deposited. The Revenue fairly accepted both the existence of the adjudication and appellate orders and the binding nature of the appellate order. Since no stay of the appellate order had been obtained in the pending appeal before the Tribunal, the Court held that there was no embargo on release of the goods, particularly when the revenue's interest already stood secured by deposit of the full duty and consequential amounts. The Court therefore did not permit continued detention of the goods or any contrary departmental position to defeat implementation of the operative appellate order. [Paras 9, 10, 11] The goods were directed to be released for the purpose of re-export upon confirmation that the deposited amount stood credited to the Government treasury. Final Conclusion: Holding that the appellate order remained operative and binding in the absence of any stay, and that the duty and penalties payable thereunder had already been deposited, the Court directed release of the confiscated goods for re-export. The writ petition was accordingly disposed of. Issues: Whether the seized goods were liable to be released for re-export after the duty and penalties imposed under the adjudication and appellate orders had been deposited, notwithstanding the pendency of the Revenue's appeal and the subsequent demand notice.Analysis: The petitioner had already deposited the customs duty and the penalties as modified by the appellate order. The Court noted that the respondent revenue did not dispute the original adjudication, the appellate modification, or the fact of deposit. It also recorded that although the Revenue had filed an appeal before the Tribunal, no stay order or interim protection had been shown. In these circumstances, the Court held that there was no embargo on release of the goods, particularly as the revenue interest stood secured by payment. The later demand notice was not treated as an impediment to release in the present proceedings.Conclusion: The petitioner was entitled to release of the goods for re-export upon confirmation of deposit of Rs. 78,00,000, and the respondent was directed to release the goods within 10 days.Ratio Decidendi: Where the duty and penalty determined under the operative customs orders have been duly deposited and no stay of the appellate order exists, the customs authorities cannot withhold release of the goods, including for re-export, merely because a further appeal is pending.