TaxTMI 
TaxTMI 
2025 (9) TMI 1736
X X X X Extracts X X X X
X X X X Extracts X X X X
....ril, 2025 passed in an earlier writ petition filed by the Petitioner being W.P.(C) 4851/2025. The said Order-in-Appeal was also modified by this Court vide order dated 21st May, 2025 passed in the said writ petition waiving the applicable customs duty. 4. The brief facts of the case are that the Petitioner is a Canadian citizen, who arrived in India from Dubai on 18th August, 2019. The Petitioner, who is also a senior citizen, was wearing the subject gold jewellery. It is the case of the Petitioner that the subject gold jewellery are very old bangles which belonged to her mother-in-law and which were later gifted to her. However, the jewellery was seized by the Customs Department on 18th August, 2019 and a detention receipt was issued for the said seizure. 5. A show cause notice was issued on 9th October, 2019 and pursuant to the same, the Order-in-Original was passed on 31st March, 2021 directing absolute confiscation of the subject gold jewellery in the following terms: "I order absolute confiscation of the seized Fourteen (14) Gold Bangles totally weighing 1110 Grams valued at Rs. 38,44,119/- (Rupees Thirty Eight Lakhs Forty Four Thousand One Hundred and Nineteen ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Court had directed the Appellate Authority to decide the Appeal by a particular fixed date and place the order before this Court. The said order came to be passed on 14th May 2025. 7. On 21st May, 2025, this Court considered the Appellate Authority's order in W.P.(C) 4851/2025. After considering the facts and circumstances the Court had directed release of the subject gold jewellery. The operative portion of the said order reads as under: "10. Today, the matter has been taken up for hearing. Mr. Tyagi, ld. Counsel informs the Court that the Commissionerate Appeals has passed the final order dated 14th May, 2025 in this matter. The operative portion of the said order reads as under: "9.0 In light of discussions and findings as above, I allow the appeal partially against OIO No. 107/ADJ/2021 dated 19.04.2021 passed by the Joint Commissioner of Customs, T-3, IGI Airport, New Delhi and impugned goods i.e. "Fourteen (14) gold Bangles having purity 995 total weighing 1110 grams valued at Rs. 38,44,119/-" is allowed to be released to the appellant/authorized person on payment of redemption fine of Rs. 3,80,000/-(Rupees Three Lakh Eighty Thousand only) under Sectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt that would be paid to the Petitioner, would be the amount which was recovered from the sale of the subject gold jewellery in the year 2021 and not the present market rate of gold. 12. This position is not acceptable to the Petitioner and rightly so, inasmuch as, the value of gold has substantially increased in the last four years and even when the earlier Petition was finally disposed of vide order dated 21st May, 2025, this fact was not communicated to the Court. 13. After considering the above submissions, the Court had issued directions on 20th June, 2025 to the following effect: "10. Under such circumstances, the following directions are issued : (i) Issue notice. Let notice be accepted by Mr. Tyagi, ld. SSC, CBIC. Let him file a detailed counter affidavit in this matter within a period of four weeks. (ii) In the meantime, the amount, as admitted by the Customs Department shall be paid to the Petitioner within a period of two weeks, subject to the said documents being furnished by the Petitioner to the Customs Department. (iii) Whatever amount is now paid, shall be subject to the outcome of the writ petition as, in the prima facie op....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etely untenable since this Court had already waived the same vide order dated 21st May, 2025 in W.P.(C) 4851/2025 as also considering that the Petitioner is a Canadian citizen and she was willing to re-export the subject gold jewellery. 16. It is also necessary to note that the order for re-export was already passed by this Court in its order dated 21st May, 2025 in W.P.(C) 4851/2025. However, even at that stage, the Customs Department had not disclosed that the subject gold jewellery had already been disposed of. 17. Considering the above facts, this Court on 10th September, 2025 has directed as under: "17. Under these circumstances, this Court is of the opinion that the disposal of the subject gold jewellery itself is shrouded under doubt. Moreover, the refund order is conspicuously silent about when the subject gold jewellery was disposed of and how much money was recovered by the Customs Department as also the procedure followed for disposal of the same. 18. Considering the above as also the fact that the quantity of the subject gold jewellery was substantial i.e., 1110 grams, let the Assistant Commissioner (Refunds), file an affidavit on record giving a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ic container is having particulars of the case and DR No. 46624 dated 18.08.2019 The plastic container is directed to be opened. On opening the plastic container wrapped with adhesive tape, it was found to contain 14 Gold Bangles total weighing 1110 Gms., as detailed below:- Sr No Description of Gold Total weight 1 14 Gold Bangles 1110 grams Total 1110 grams Details of the aforesaid 14 Gold Bangles total weighing 1110 Gms., tallied with the Panchnama dated 18.08.2019 and it is observed that the weight of the above gold was mentioned as 1110 Gms in the said Panchnama and the same is found to be (total) weighing 1109 gms during the pre-trial proceedings. The Panchnama, lying in the departmental case file, is also produced before me by the officer of the Customs and after going through the same, I am of the opinion that the photocopy of the Panchnama dated 18.08.2019 which was filed by the department with the application under Section 110(1B) of the Customs Act, 1962, is the same. Case property opened and its quantity/weight and sealing tallied with the Panchnama dated 18.08,2019 and actual weight of the above gold is found ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the same is entered into the register. The Investigating Officer prepares the files with the relevant documents along with the details of any gold, contraband or incriminating item. After seizure, the same is deposited in the godown. The disposal of the gold is stated to be done as per Section 110(1D) of the Customs Act, 1962. In terms thereof, in the present case, the matter relates to prior to the inclusion of Section 110(1D). Accordingly, it is stated as under: "8. It is submitted that in the present case also since the period under dispute pertains to prior to inclusion of Section 110(1D), the disposal of seized gold kadas weighing 1100 gms was executed in compliance of Section 110(1A), (1B) & (1C) of the Customs Act, 1962. The Respondents have filed an application Before the Executive Magistrate, Chanakyapuri, under Section 110(1B) of the Customs Act which was allowed and only after issuance of Pre-trail certificate by the Ld. Magistrate the said goods were disposed of. 9. It is also submitted that the Net amount recovered by the Customs Department Rs. 50,17,490/- (Email communication received from Disposal branch/Calculation Sheet enclosed as Annexure-B)" ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../OIO are in accordance of law, it is requested that the refund order dated 08.07.2025 be upheld." 25. The above reveals that the Customs Department follows an unusual practice of not informing the Adjudicating Authority or the Appellate Authority of the factum of the disposal of the gold. This is shocking to say the least. Firstly, the gold has been disposed of without informing the person concerned. Secondly, the Customs Department follows a surreptitious practice of not informing the Adjudicating Authority or the Appellate Authority leading to an order where the Petitioner has in fact succeeded before the Appellate Authority and release of the goods was directed subject to payment of redemption fine, customs duty and penalty. This order was thereafter modified by this Court on 21st May, 2025 allowing re-export. 26. Throughout this entire period, the sale of the subject gold jewellery was not intimated. This practice can hardly be stated to be fair or just. There is another point of concern to this Court. Even when the Court directed the Commissioner (Refund) to pass the order and compute the amount payable to the Petitioner. The amount which is taken to be the value of gold....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (vi) The impugned Refund Order was passed on 3rd October, 2024. The operative portion of the said order reads as under: "17. Return of tariff value of 1065.10 grams of confiscated gold amounting to Rs. 50,14,704/- (Rupees Fifty Lakh Fourteen Thousand Seven Hundred and Four Only) in lieu of the re-export of the same after realizing the Redemption Fine of Rs. 4,60,000/- and Penalty of Rs. 4,60,000/- and order to pay an amount of Rs. 50,14,704/- (Rupees Fifty Lakh Fourteen Thousand Seven Hundred and Four Only) to the applicant/Authorized representative through RTGS against Cheque No. 604890 Dated. 10.2024 issued to PNB, Sansad Marg, New Delhi." As per the impugned Refund order, the confiscated gold has been valued at Rs.50,14,704/-, after realizing the redemption fine which has been deposited along with the penalty. (vii) To further compound the irregularities, the impugned Corrigendum Order is then issued, holding the Petitioner liable for customs duty, further reducing the amount payable in the following terms: "Refund of Rs. 29,46,139/- (Twenty Nine Lakh Forty Six Thousand One Hundred Thirty Nine Only) in lieu of re-export of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. 6690/2023 was being heard and the final order therein was passed on 20th July, 2023. 17. The disposal of the detained gold without intimation to the Petitioner is also contrary to law. Clause 3.1.2 of the Circular dated 6th September, 2022 would, therefore, have no application in the present case. The entire process followed by the Customs Department for the disposal of the detained gold, collecting the redemption fine and penalty as also deducting customs duty before payment of the value of the detained gold to the Petitioner would, therefore, not be tenable. 18. The Petitioner having succeeded in appeal before the Commissioner of Customs (Appeals) and the Customs Department having not challenged the Order- in-Appeal, the Petitioner cannot be made worse off at this stage. 19. Under these circumstances, this Court is of the opinion that the Petitioner is entitled to the entire value of the detained gold as on the market rate prevalent today, which would be liable to be paid by the Customs Department within a period of three weeks. If the said amount is not paid within three weeks, costs of Rs.1,00,000/- would be liable to be paid by the Customs Depar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....permitted to re- export the gold jewellery on payment of a redemption fine. Such order as seen from the facts as noted above is incapable of compliance, inasmuch as, the gold jewellery itself is not available for the petitioners to re-export it. This more significantly as the revisional authority having observed that this was not the case where the petitioners. have attempted to smuggle the gold. 42. As rightly urged on behalf of the petitioners, the Assistant Commissioner who disposed of the gold never informed either the appellate authority or the revisional authority that the seized gold jewellery of the petitioners itself was not available and was disposed of. This, in our opinion, is something which raises a serious doubts on the method and manner in which the customs officers discharge their duties under the Act. In our opinion, even if there is a power to dispose of the gold, it has to be exercised fairly, reasonably and transparently. Disposal of the property belonging to the persons like the petitioners and/or to sell the seized goods at the ipse dixit of the officers, is not what the law would recognise. The procedure to dispose of such valuable commodities is re....