TaxTMI 
TaxTMI 
2026 (6) TMI 1022
X X X X Extracts X X X X
X X X X Extracts X X X X
.... specific dates, are captured in this order without placing any specific reliance on the dates. 3. The facts, as could be culled out from the composite materials forming part of the typed set in all the petitions, is briefly stated thus :- 4. The respective petitioners, returning back from overseas destinations on various dates during the month of July, 2013, as mentioned in the writ petitions, while trying to pass through the green channel, were stopped and upon search, gold of various quantities and certain electronic items were seized from the petitioners, which were not declared by the petitioners. Upon seizure of the same, the petitioners were arrested, but were thereafter released and proceedings were initiated. 5. It is further averred that show cause notice was issued to the respective petitioners on various dated u/s 124 of the Customs Act (for short 'the Act') proposing that the goods imported by them are liable for confiscation u/s 111 (d) and 111 (l) of the Act and further proposing imposition of penalties on the petitioners u/s 112 and 114 of the Act. 6. It is the further averment of the petitioners that after due process of law, the adjudicating authority,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....025-2026 dated 2.5.2025, while ordered confiscation of the gold and the electronic goods, however, granted option to the petitioners to redeem the gold on payment of quantified redemption fine u/s 125 along with payment of applicable customs duty and imposed penalties u/s 112 (a) and 114 (i) of the Act. 10. It is the further averment of the petitioners that consequent upon the De-Novo, the petitioners approached the department for redemption of the gold on payment of duties, penalties and redemption fine vide their respective letters by submitting that they are willing to pay the redemption fine, penalty u/s 112 (a) and applicable customs duty on the seized gold, however, were paying the penalty imposed u/s 114 (i) of the Act under protest, by placing that they intend to file appeal against the imposition of penalty u/s 114 (i). Further, the petitioners also expressed their inclination not to clear the electronic goods. On the above, it is the further averment of the petitioners that they requested the authority to provide the working sheet to enable the remittance of the amount for redeeming the gold. It is the further averment of the petitioners that there was no response to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lic auction sale and, therefore, there is a flagrant violation of not only the circular, but also principles of natural justice It is the further submission of the learned counsel that the failure to inform the petitioners about the disposal of the seized goods prior to the conclusion of the appellate proceedings is grossly and procedurally improper. 13. It is the further submission of the learned counsel that the manner in which the seized and confiscated goods should be disposed of is spelt u/s 110 (1A) and (1B). However, inspite of the fact that the goods were disposed of, the said factum was not brought on record while passing the order in appeal dated 28.10.2014 nor was it spelt out during the disposal of the revision application, nor before this Court and not even during the time when the matter was reheard after remand and order was passed. It was only when refund application was filed before the respondent the factum of disposal of the seized gold even in the year 2014 had come to light. 14. It is the further submission of the learned counsel that before selling/disposing of the seized commodity, it is incumbent on the officials of Customs to follow the procedure laid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....committed by the respondent, the petitioners cannot be made to suffer. 17. It is the further submission of the learned counsel that when an order has been passed for redemption, necessarily, it is incumbent on the part of the respondent to honour the said order and redeem the said commodity back to the owner and in the present case, the respondent ought to have returned the gold back to the petitioners upon the order in the de novo proceedings. If the gold had been sold without notice to the petitioners and without following the procedure prescribed under the CBEC circular dated 14.2.2006, then the only course open to the respondent is to return the value of the gold at the market price on the date of redemption and the benefit of the petitioners cannot be curtailed by way of the circular of the year 2022, that too when the sale of the gold was not put forth before this Court, which had directed the authority to consider the issue of redemption vide its order dated 02.01.2025 even at which point of time, the Court was not informed about the sale of the seized gold. 18. In fine, it is the submission of the learned counsel that non-issuance of notice before sale of the seized g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nfiscated gold. Therefore, it is submitted that the plea of suppression, concealment or violation canvassed by the petitioners cannot be countenanced. 23. It is the further submission of the learned counsel that with regard to the correspondence including the issue of notice is not available readily with the respondent, as the whole case pertains to the year 2013 and as such the record of correspondence is not traceable. However, it is submitted by the learned counsel that all the procedures contemplated under the Act have been scrupulously followed. 24. It is further submitted that even otherwise notice u/s 150 applies only in respect of goods that are to be sold otherwise than as seized or confiscated goods, but the present gold was seized and provisionally disposed u/s 110 (1A) and sent to SPMCIL as per the standing instructions and, therefore, Section 150 of the Act has no application in respect of disposal of seized/confiscated gold and, therefore, notice u/s 150 does not arise at all. 25. It is the further submission of the learned counsel that the contention of the petitioners that the respondent is legally bound to restore possession of the confiscated gold on paym....
X X X X Extracts X X X X
X X X X Extracts X X X X
....disposed of through auction on 31.12.2014 and the sale proceeds was deposited through challan on 6.1.2015. 30. Upon the order of adjudication being passed on 25.4.2014, appeal was filed by the petitioners in which an order had come to be passed on 28.10.2014. However, after the order in appeal, revision was filed by the petitioners and it is not in dispute that the said revisions were filed on time. 31. A perusal of the records reveal that upon the revision being filed in the year 2014, order came to be passed on 27.10.2021 confirming the appellate order. Against the said order, writ petitions were filed before this Court in W.P. Nos.61/2022, etc. Batch, in which this Court passed the following order :- "41. The import of gold is not prohibited. Rather, it is restricted and regulated. Therefore, any person carrying gold ornament ought to have paid appropriate customs duty if whether such gold jewellery/ornament was worn in person or kept in the "baggage". 42. Absolute confiscation of the imported quantity of gold in the hands of each of these petitioners cannot be ordered to be absolutely confiscated under Section 125 of the Customs Act, 1962. 43. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e deal with the goods except with the previous permission of such officer. (1A) The Central Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant c considerations, by notification in the Official Gazette, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (1), be disposed of by the proper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified. (1B) Where any goods, being goods specified under subsection (1A), have been seized by a proper officer under subsection (1), he shall prepare an inventory of such goods containing such details relating to their description, quality, quantity, mark, numbers, country of origin and other particulars as the proper officer may consider relevant to the identity of the goods in any proceedings under this Act and shall make an application to a Magistrate for the purpose of - (a) certifying the correctness of the inventory so prepared; or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gold is a valuable commodity, which increases in value and there is no depreciation in the value of gold and it is not a hazardous material. In this scenario, there is no procedure notified in which gold could be disposed of by the authorities. 37. In this scenario, reference is made to the Board's instruction No.22/2022 dated 6.9.2022, which prescribes the following procedure :- "3.1.2 Whenever seized gold has to be returned on account of any order from a judicial forum and the gold has already been disposed of, the amount to be refunded in lieu of such gold shall be calculated as given below : i. If the seizure is made in the customs area, calculation shall be based on the tariff value of gold on the date of transfer of such seized/confiscated gold to SPMCIL, and ...." 38. It is the case of the respondent that the gold was seized within the customs area and, therefore, applying the aforesaid Board's instructions, the rate of gold was determined at the rate on the date of transfer of the said gold to SPMCIL and after deducting all the penalties, customs duty and redemption fine, the balance amount was returned to the petitioners. 39. However, the petitio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of goods, which are to be sold, but which have not been confiscated for which procedure has been prescribed and only in respect of such sale of goods, notice, according to the respondent is envisaged and the aforesaid circular deals only with such goods, which have not been confiscated. 43. True it is that the former portion of the circular speaks about the seized goods, which are being disposed of without notice to the owner of the goods, when such seizure has been set aside by the adjudicating authority, it casts heavy financial burden on the exchequer. However, not stopping there, paras-2 and 3 of the said circular speaks about the issuance of notice to the owner of the goods in respect of the goods which are not confiscated and also with respect to confiscated goods where the owner of the goods have not exhausted all the appeal/legal remedies. 44. The present case is one of goods which are seized and, thereafter confiscated and, therefore, para-2 would not stand attracted. However, para-3 of the said circular specifically addresses the issue relating to confiscated goods and in respect of such of the goods, there is a specific direction where appeal/legal remedies have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d repealed with effect from 6.6.1990 and on and from the said date, import of gold is only restricted and regulated and not prohibited. Therefore, the sale of the gold through auction sale without putting the petitioners on notice is grossly improper, illegal and against the circular. 46. Once this Court has come to the conclusion that the non-issuance of notice is fatal to the case of the respondent, necessarily, the next limb which has to be decided by this Court is with reference to the issue of redemption of the gold so confiscated and the resultant relief to which the petitioners would be entitled to. 47. Certain decisions have been placed before this Court on behalf of the petitioners to claim that either the gold should be returned back or the current market value should be paid. The decisions, which have been placed are passed by the Bombay High Court and the Delhi High Court. It is accepted across the Bar that the decisions of the other High Courts, would have only persuasive value, but it cannot be binding on this Court. Notwithstanding the same, it is to be pointed out that the facts in the said case also are similar and the findings rendered therein also converge ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fer of such seized/confiscated gold to SPMCIL. 50. It is to be noted that when a circular has mandated issuance of notice even with regard to confiscated goods to be issued to the owner of the goods in which appeal/legal remedies have not been exhausted, it is incumbent on the department to follow the said circular and issue notice to the owner of the goods. However, without following the said circular the gold, which was seized and confiscated from the petitioners have been sold but the respondent wants to follow a circular of 2022, which prescribes the amount which is to be calculated and paid with regard to gold seized/confiscated, which have been sold. 51. When the procedure prescribed in the other circular issued by the department had been followed by the respondent, then the respondent can lay its hands on the circular of the year 2022 to claim that what is provided in the said circular would alone be payable. However, it cannot have selective application of circulars which would be beneficial to the respondent/department. 52. In this regard, Section 110 (1-A) has already been discussed and extracted supra, which confers authority on the Central Government to issue n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial to the petitioners that they would be entitled to redeem the seized crude gold of 24K purity upon payment of respective redemption fine. Further, in the said order, there is a categorical finding recorded that the order of this Court in the earlier round of litigation with regard to rejection of the claim of the petitioners for redemption by the department has been overturned and the said finding has been accepted by the department in the present review in the De Novo proceeding. That being the admitted position, it is incumbent on the part of the respondent to either return the seized gold of 24K purity or the value as on date to the petitioners, which alone would be just and proper. It is to be pointed out that when redemption is permitted, even as per the terminology used, viz., 'redemption', the petitioners would be entitled to the goods, which were seized from them. Once an order of redemption is passed, the respondent is bound to return back the seized commodity and failure on the part of the respondent, necessarily, value as on date in lieu of the said commodity has to be returned, as that alone would satisfy the option of redemption. 56. In this regard, once again, i....