Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Date of Decision: 4 April, 2025
+ W.P.(C) 4327/2025
SAJAD AHMED KAK .....Petitioner
Through: Mr. D.S. Chadha, Advocate.
versus
COMMISSIONER OF CUSTOMS NEW DELHI .....Respondent
Through: Mr. Aakarsh Srivastava, Senior
Standing Counsel.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE MANOJ JAIN
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
CM APPL. 20037/2025 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of.
W.P.(C) 4327/2025
3. This petition has been filed under Article 226 of the Constitution of
India by the Petitioner – Sajad Ahmed Kak seeking issuance of appropriate
directions to the Respondent-Department to either return the gold to the
Petitioner or refund the value of the said gold in terms of the Order-in-Appeal
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No.CC(A)/CUSTOMS/ D-1/ AIR/ 2020-21 dated 17 June, 2020 passed by
the Respondent-Department.
4. This petition has a long drawn history. The Petitioner had travelled
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from Bangkok to Delhi on 10 March, 2014 and he was carrying three gold
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bars weighing about 457.95 grams. The Petitioner was intercepted at IGI
Airport, Terminal-3, New Delhi, and the gold was detained vide detention
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receipt bearing No. 19397 issued on 10 March, 2014.
5. A show cause notice dated 1st September, 2014 bearing
C.NO.VIII(AP)/ 10/P&I/579-B/2013 was issued to the Petitioner with respect
to such detention and a reply to the show cause notice was also submitted by
the Petitioner.
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6. Accordingly, the order in original dated 30 January, 2015 was passed
by the Adjudicating Authority. In terms of the said order, absolute
confiscation of the gold bars was directed. The relevant portion of the said
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order dated 30 January 2015, is extracted below :-
“(i) I order absolute confiscation of items namely the
seized three gold bar weighing 457.95 grams and value
is 12,29,413/- (Rupees Twelve Lakhs twenty nine
thousand four hundred thirteen only) under section
111(d), 111 (i), 111(j), 111(1) and 111 (m) of the
Customs Act, 1962.
(ii) I also impose a penalty of Rs.4,00,000/- ( Rupees
Four Lakhs only) on the noticee under Section 112 and
114AA of the Customs Act, 1962.
(iii) I deny free allowance of Rs. 35,000 /- to Mr. Sajad
Ahmad in respect of the seized goods.”
7. This order was challenged by the Petitioner and an Order-in-Appeal
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was passed, permitting redemption of the goods vide order dated 4 March,
2016. The same is extracted below :-
“In view of the above, I hold that the goods can be
redeemed upon payment of redemption fine of Rs.
3,50,000/- under Section 125 of the Act ibid. However,
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Signed By:KESHAV
Signing Date:08.04.2025
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penalty imposed upon the appellant under Section 112
& 114AA of the Customs Act, 1962 is not interfered with.
This fine along with penalty will meet the end justice and
would deter the appellant from like mis-adventures in
future. Further, the appellant is also liable to pay the
Customs Duties as applicable. The adjudicating
authority is hereby directed to convey the specific duty
amount to the appellant within 15 days of receipt of this
order.”
8. As per the above order, the Petitioner was permitted to redeem the
goods with a fine of Rs. 3,50,000/- and the Adjudicating Authority was to
convey the specific duty amount to be paid by the Appellant within 15 days.
Unfortunately, the said amount was not conveyed to the Petitioner. Despite
repeated letters written by the Petitioner, the same was left unattended. It is
also submitted by the Petitioner that in the meantime, the gold was also
disposed of by the Respondent-Department without intimation to the
Petitioner.
9. The Petitioner then applied for refund in view of the said disposal of
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gold. Refund order being order No. 08/2017-18 was passed on 24 July, 2017
by the Assistant Commissioner (Refund), rejecting the application for refund.
In the appeal against the said order, the matter was remanded afresh to be
decided by the Adjudicating Authority. The said order dated 17th June, 2020
is relevant and is set out below :-
“5. Discussion and findings :-
5.1 I have carefully considered the contents of the
impugned Order, written & oral submissions made by
the Appellant. The issue to be decided is whether the
Appellant is eligible for the refund of sale proceeds of
the confiscated goods?
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Signed By:KESHAV
Signing Date:08.04.2025
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5.2 I find that the Adjudication order for confiscating
the seized goods was issued on 02.02.2015 and
Commissioner (Appeals) vide Order-in-Appeal no.
CC(A)Cus/D-1/Airport/125/2016 dated 03.03.2016 had
given an option to redeem the confiscated goods on
payment of redemption fine of Rs. 3,50,000/- under
section 125 of the Customs Act, 1962 along with the
applicable customs duty, penalty, other duties, cess and
charges as applicable. In terms of Section 125(3) of the
Customs Act, 1962, the option for redemption becomes
void if not exercised within 120 days. However it is
noted that the Appellant had sought redemption in terms
of order of Commissioner (Appeal) dated 03.03.2016 on
14.03.2016 itself. He has been following up with his
letters dated 30.05.2016 & 08.08.2016. The
Adjudicating Authority has also noted that the Appellant
had been visiting Airport in this regard.
5.3 I find that the refund claim has been rejected on the
ground that the Appellant had applied for refund after
the expiry of eligible period of one year and therefore
the refund is not tenable in terms of Section 27 of the
Customs Act, 1962. However, it is noted that the refund
claim of the Appellant is not covered by Section 27 of
the Customs Act 1962 as it is not refund of any duty but
pertains to refund of sale proceeds of confiscated goods,
in respect of which an appeal was pending. Once the
option for redemption has been exercised, the
confiscated goods are required to be returned to the
claimant and accordingly if the confiscated goods have
been disposed, the sale proceeds need to be refunded
after necessary adjustments.
5.4 In view of the above observation, the matter needs
to be re-examined by the original adjudication
authority. It is also noted that rejection of refund claim
has done without following principles of natural justice.
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Signed By:KESHAV
Signing Date:08.04.2025
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Order
In light of discussions and findings as above, the
impugned order No. 08/2017-18 dated 04.07.2017 is set
aside and matter remanded to original adjudicating
authority in terms of Section 128A(3)(b)(i) of the
Customs Act, 1962 for passing fresh order keeping in
view the above observations.”
10. As per the above Order-in-Appeal dated 17th June, 2020, the
Commissioner of Customs (Appeal) noted that there was a follow up by the
Petitioner but the refund was not granted. In view thereof, the order rejecting
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the refund dated 24 July, 2017 was set aside and the matter was remanded
afresh to the original Adjudicating Authority.
11. The entire journey of 10 years has still not culminated in either
redemption or refund being issued to the Petitioner. Clearly, the Customs
Authorities ought to have initially given effect to the order of Commissioner
(Appeals) and accordingly should have determined the duty and allowed the
Petitioner to avail release of the gold, which did not happen.
12. Thereafter, as per the Petitioner, the gold has also been disposed of
without any intimation to him. If this position is correct, the disposal would
be contrary to law.
13. Moreover, the final Order-in-Appeal has also remanded the matter to
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the original Adjudicating Authority. This order was passed on 17 June, 2020
and till date, the Adjudicating Authority has not passed any orders, despite
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repeated letters dated 21 June, 2022 and 28 September, 2024 sent by the
Petitioner.
14. Gold prices have also increased considerably during this period.
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Signed By:KESHAV
Signing Date:08.04.2025
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Considering this position, the Court is inclined to direct the Adjudicating
Authority, Assistant/Deputy Commissioner (Refunds) to pass the refund order
within a period of one month from today. While passing the refund order, the
following aspects shall be examined :-
(i) whether the Petitioner was given any intimation prior to disposal
of the gold or not;
(ii) what was the amount recovered from the disposal;
(iii) whether the Petitioner would be entitled to any interest in
accordance with law.
15. The order shall be passed after considering all these aspects.
16. None of the other reliefs are being adjudicated in the present petition.
17. If the order is not passed within one month, the Petitioner is free to seek
revival of the present petition.
18. In respect to the above stated directions, the personal hearing notice
shall be communicated to the Petitioner by the Adjudicating Authority,
Assistant/Deputy Commissioner (Refunds) through his Counsel and
accordingly, the Petitioner shall ensure his presence.
19. The present petition is disposed of in the above terms. Pending
application(s), if any, also stand disposed of.
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20. List for reporting compliance on 15 July, 2025.
PRATHIBA M. SINGH
JUDGE
MANOJ JAIN
JUDGE
APRIL 4, 2025/ nd/ss
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Signed By:KESHAV
Signing Date:08.04.2025
12:05:26