TaxTMI 
TaxTMI 
2025 (12) TMI 1082
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....he auction. The appellant was declared the highest bidder and intimation letter dated 07.02.2017 was issued to the appellant requiring the appellant to deposit an amount of Rs. 29,19,444/- within three days. This amount was also deposited by the appellant on 08.02.2017. Thereafter, the department requested the appellant to deposit the balance amount by a letter dated 14.03.2017. The appellant sent a letter dated 27.03.2023 by e-mail pointing out that the department had not provided the testing report. The appellant also pointed out that life of the cigarette is one year from the date of manufacture and, therefore, this information should also be provided to the appellant. The acceptance letter was issued by the department to the appellant on 28.03.2017. 2. The Central Board of Excise and Customs [CBEC] issued a Circular dated 29.03.2017 regarding disposal of confiscated cigarettes of foreign origin. It provided that the cigarette packets which do not comply with the provisions of laws mentioned in the Circular should not be released for home consumption in the domestic market and should be destroyed. 3. The appellant wrote a letter that it would not be possible for the appell....
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....ated 30th April, 2024 passed by the Assistant Commissioner (Refund) cannot be completely foreclosed insofar as the Petitioner is concerned. The position as it stands is that the order cannot be challenged on merits by the Petitioner before the Commissioner (Appeals) for his refusal to exercise jurisdiction. The Commissioner (Appeals) has also observed that the dispute is in the nature of a contractual dispute, hence he does not have jurisdiction. 15. Keeping both these aspects in mind, this Court is of the view that the Petitioner ought to be permitted, in the unique facts of this case, to challenge the refund order dated 30th April 2024 before an appropriate authority. In the opinion of this Court, presuming the order of forfeiture to be an order by the Commissioner itself and the Commissioner (Appeals) having refused to exercise jurisdiction, the Petitioner is permitted to approach the Customs, Excise and Service Tax Appellate Tribunal (hereinafter, 'CESTAT') challenging the order dated 30th April 2024 as also the impugned order of the Commissioner (Appeals). The said appeal shall be filed within two weeks. In the said appeal both the orders dated 30th April 2024....
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....s is, therefore, clearly not justified. 11. Shri Nikhil Mohan Goyal, learned authorized representative appearing for the department, however, made the following submissions: (i) Section 27 of the Customs Act, 1962 [the Customs Act] provides for refund of duty or interest but in the present case the issue is of refund of earnest money deposited in an auction which is neither duty nor interest and, therefore, the appeal is not maintainable; (ii) The e-auction notice dated 25.01.2017 for conducting e-auction on 17.02.2017 for the sale of seized/confiscated cigarettes was on the basis of the Instructions dated 10.02.2020 and not the Circular dated 29.03.2017; (iii) The e-auction notice requires that fit for smoking certificate/ No Objection Certificate is taken by the buyer from the concerned authority and the successful buyer should affix pictorial warning on the packets as per the 2008 Rules; (iv) The appellant got the cigarettes tested and once they were certified, it was the duty of the appellant to lift the auction goods after making the complete payment; and (v) In acceptance letter was issued to the appellant on 28.03.2017 requirin....
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....f the 2008 Rules. This information was not supplied by the department to the appellant. 16. However, the CBIC issued a Circular dated 29.03.2017 regarding disposal of confiscated cigarettes of foreign origin. The relevant portion of this Circular is reproduced below: "Circular No. 9/2017-Cus., dated 29-3-2017 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject: Disposal of seized/confiscated cigarettes of foreign origin vis-à-vis provisions of the Cigarettes and other Tobacco products (Packaging and Labelling) Rules, 2008. I am directed to refer to Board's instructions of even no. dated 10-2-2010 on the above mentioned subject. The matter of disposal of seized/confiscated cigarettes has been examined by the Board afresh in view of the suggestions that there are difficulties being faced by the field formations in adhering to the requirements spelt out in the above mentioned Circular and the subsequent statutory provisions on the issue. 2. All tobacco products (whether domestically manufactured and sold or imported) require to comply with the r....
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....of the principal display area of the package; 60% shall cover pictorial warning and 25% shall cover textual health warning; the placement of the warning; the language to be used on the package; every package of cigarette should have name of the product; name and address of the manufacturer or importer or packer, origin of the product (for import); quantity of the product and date of manufacture [Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution Act, 2003 (COTPA 2003) and rules may be referred]. ii. Cigarette packets shall have the name and address of the manufacturer or packer or importer and the month and year in which the commodity is manufactured or pre-packed or imported [Legal Metrology (Packaged Commodity) Rules, 2011 refers). 5.1 Such cigarettes should be disposed of by sale to NCCF/Kendriya Bhandar and other Consumer Cooperatives (refer to Circular No. 39/2016-Customs, dated 26-8-2016) or by e-auction. 6. The cigarette packets which do not comply with the provisions of laws as discussed above should not be released for home consumption in the domestic marke....
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....en released to the appellant. After the acceptance letter was issued to the appellant on 28.03.2017, the Circular dated 29.03.2017 had come into force which only addressed the difficulties faced in implementation of the earlier Instructions dated 10.02.2010. 19. It is not the case of the department that the cigarette packets contain the name and address of the manufacturer or packer or importer and the month and year in which the commodity was manufactured, which is requirement of the 2008 Rules as amended in 2011 and 2014. In such circumstances, the cigarette packets cannot be released for home consumption in the domestic market and have to be destroyed. Though the Circular dated 29.03.2017 was issued after the e-auction notice was issued on 25.01.2017, but it would be applicable in the present case as the goods had not been released to the appellant when the Circular was issued. This apart, Circular only addresses the difficulties that were faced by the field department while implementing the earlier Instructions 10.02.2010. In such circumstances, these cigarette packets that are still with the department have to be destroyed. 20. The appellant had been repeatedly asking th....
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....rms of the said Act and Rules it is illegal to sell cigarettes without such declarations and particulars as prescribed vide above Act. They also stated that with advent of GST Rules there is general confusion about the interstate movement of the goods and in view of above of said problems they requested for more time find solutions to the problems they are facing." FINDINGS 10. I have gone through the facts and records of the case. I find that as part of disposal of seized confiscated cigarettes of foreign origin the disposal unit of Custom House has put for e-auction of cigarettes of foreign origin though M/s MSTC Ltd. the designated agency for conducting e-auction on behalf of Custom House. Accordingly, M/s Ahad Traders was accepted by approval committee being the highest bidder and they remitted the bid amount of Rs.93,27,111/- vide 3 challans i.e. CM 153/15.2.2017 for Rs. 23,31,778/-. CM 154 15.02.2017 for Rs. 25.000/- and CM 231/21.02.2017 for Rs.69.70,333/- and MSTC has issued delivery order in favour of M/s Ahad Traders with last date to take delivery of the goods on 06.03.2017. As per the condition incorporated in the auction the successful bidder has to observe....
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.... show that the aforesaid order passed by the Assistant Commissioner on 24.05.2018 has been set aside in any proceedings. 23. On the same parity and for the reasons stated above, the appellant would also be entitled for refund of the amount deposited. 24. It is, therefore, not possible to accept the contention advanced by the learned authorized representative appearing for the department that the Circular dated 29.03.2017 would not be applicable in the present case because the auction was conducted prior to 29.03.2017. The auction notice may have required the appellant to perform certain acts but when the mandatory condition specified in the Rules and the Circular are not satisfied on the cigarettes packets that have been confiscated, the cigarette packets cannot be released in favour of the appellant and have to be destroyed. 25. It is also not possible to accept the contention of the learned authorized representative appearing for the department that this Tribunal would have no jurisdiction to grant refund of the amount deposited by the appellant towards e-auction since section 27 of the Customs Act deals with refund of duty and interest for the reason that this appeal ha....