1. Confiscation of goods under Customs Act, 1962 — Option for redemption on payment of fine and duty or re-export within a specified period without duty. (Para 2 )
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1999 Supreme(SC) 850
SUPREME COURT OF INDIA
N.Santosh Hegde : R.C.Lahoti : S.P.Bharucha
Siemens Limited
Versus
Collector Of Customs
Case No. : 6742 of 1996
Date of Decision : 8/12/99
Advocates Appeared: Khanna H.R.
If a court extends the time limit for re-exporting confiscated goods to avoid redemption fines and duties, and the goods are successfully re-exported within that extended period, the party is entitled to a refund of the redemption fine paid.
Headnote:(A) Customs Act, 1962 - Section iii(d) and Section 74 - Confiscation of goods - Option to redeem on payment of fine and duty or re-export within a specified period - Where the court extends the period for re-export and the goods are subsequently re-exported, the redemption fine paid is refundable. (Paras 2, 4, 5)
Facts of the case:
The adjudicating authority ordered the confiscation of a unit of equipment. The party was given an option to either redeem the goods by paying a redemption fine and customs duty or to re-export the goods within three months, in which case no duty would be chargeable. The party paid the redemption fine but was unable to re-export the goods within the stipulated time due to actions of the customs authorities. The court subsequently extended the period for re-export via an interim order, and the goods were exported accordingly.
Findings of Court:
The court observed that the period for re-export had been extended by an interim order, and since the re-export took place within that extended timeframe, the conditions for avoiding the redemption fine and duty were satisfied.
Issues: Whether the redemption fine paid by the appellant is refundable after the goods were re-exported within a period extended by the court.
Ratio Decidendi: When a court extends the time limit for re-exporting confiscated goods to avoid payment of redemption fines and duties, and the party successfully re-exports the goods within that extended period, the party is entitled to a refund of any redemption fine previously paid.
Result: Appeal allowed.
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2. Dispute regarding liability to pay redemption fine and duty when re-export was delayed by authorities and subsequently extended by court order. (Para 3 , 4 )
3. The court found that the extension of the re-export period meant that neither the redemption fine nor the customs duty were required to be paid. (Para 4 )
4. Extension of the time limit for re-export by the court negates the requirement to pay redemption fines and duties associated with the redemption option. (Para 4 )
5. Appeal allowed — Respondents directed to refund the redemption fine paid. (Para 5 , 6 )
6. What is the effect of a court-ordered extension of the re-export period on the payment of redemption fines and duties?
If the court extends the period fixed by the adjudicating authority for re-export, and the goods are subsequently re-exported, neither the redemption fine nor the customs duty are payable. (Para 4 )
7. Under what conditions is a party entitled to duty drawback under Section 74 of the Customs Act?
A party is entitled to duty drawback under Section 74 if they redeem confiscated goods by paying the redemption fine and duty and subsequently export those goods. (Para 3 )
8. Can confiscated goods be re-exported without payment of customs duty?
Yes, if the adjudicating authority grants an option to re-export the goods within a specified timeframe, no duty is chargeable for such re-export. (Para 2 , 3 )
JUDGMENT
S.P.BHARUCHA, J.
(1) DELAY in filing proof of re-export is condoned.
(2) IT is not necessary to go into any great detail. In respect of the goods with which we are concerned, the adjudicating authority said, so far as is relevant, thus :
"I order for confiscation of one unit Laser Imager valued Rs. 20 lakhs under Section iii(d) of Customs Act, 1962.
HOWEVER, I give the option to M/s. Siemens Ltd. Delhi for redeeming the Laser Imager on payment of fine of Rs. 6,00,000.00 only and appropriate duty of Customs leviable thereon, if they desire to avail to keep it in India.
I also give M/s. Siemens the option to reexport the Laser Imager to Germany within 3 months from the date of receipt of this orders and in such case no duty will be chargeable."
(3) THE Tribunal interpreted the order saying that if the appellant wanted to keep the goods in India then it should pay the redemption fine and duty and if, after payment of that duty, it still wanted to export them, it was entitled to duty. drawback in terms of Section 74 of the Customs Act. But the adjudicating authority had also given the appellant the concession that in case it was reexporting the goods within three months, it need not pay the duty. The Tribunal did not vary .this order.
(4) THE appellant paid the redemption fine of Rupees six lakhs. It was unable to re-export the goods within three months because of certain actions on the part of the Customs authorities with which we do not need to concern ourselves here in any detail. To prevent further time being wasted, the appellant moved this Court by an interim application in this appeal and an order was passed thereon on 22nd February, 1999. It is clear that by this order this Court, having regard to the facts that were brought to .its notice, extended the period of three months fixed by the adjudicating authority for re-export of the goods, in which event neither the redemption fine nor the duty were to be paid. The re-export took place accordingly.
(5) WE think that, in these circumstances, the appellants appeal must be allowed and the respondents directed to refund to the appellant the amount of Rupees six lakhs paid as and by way of redemption fine.
(6) NO order as to costs.
