S. Muralidhar, J.

The question that has been referred to this larger Bench for decision by an order dated 9th March, 2016 of the Division Bench (DB) of this Court in the present petition is as follows:

Notwithstanding that an importer may not have made the payment of the redemption fine duty interest and penalty within the time stipulated in the order of confiscation of imported goods passed under Section 125 read with Section 126 of the Customs Act, 1962 ("Act), and which order has attained finality, but makes such payment belatedly but prior to the date of auction, can the Central Government retain the excess auction proceeds after adjusting the customs duty, interest, penalty and redemption fine or has such excess amount have to be returned paid to the owner of the goods?

2. The answer to the above question would require interpretation of the expression 'vest with the Central Government' occurring in Section 126 (1) of the Act. In this context, this Bench has also been tasked with examining the correctness of the decision of a DB of this Court in MMTC v Surjit Singh Kanda, (2013) 196 DLT 725 (DB).

The background facts

3. The background facts have been set out in detail in the referral order dated 9th March, 2016 which reads as under:

"1. The Petitioner, Gillette India Ltd. ("GIL"), is before this Court aggrieved by the auction process initiated by the Department of Customs ("Department") in respect of the goods imported by GIL under three Bills of Entry ("B/Es").

2. GIL imported 1008 Power Tooth Brushes under B/E No. 5980646 (hereafter "B/E No. 1") dated 13th February, 2012 in a single consignment and warehoused the said consignment in a public bonded warehouse by executing a Warehousing Bond under Section 59 of the Customs Act, 1962 ("Act").

3. GIL imported 300 Power Tooth Brushes under B/E No. 6029833 dated 17th February, 2012 (hereafter "B/E No. 2") and executed a warehousing bond in respect thereof under Section 59 of the Act.

4. The third consignment comprising (a) 76,800 units of Gillette Mach 3 Cartridges (b) 1,02,400 units of Gillette Mach 3 (c) 2,68,800 units of Gillette Mach 3 Cartridges (d) 30,720 units of Gillette Fusion Cartridges was imported by Bill of Entry No.6568999 (hereafter "B/E No. 3") dated 17th April, 2012. This was warehoused in the public bonded warehouse for which a Warehousing Bond was executed by GIL under Section 59 of the Act. It is stated that a substantial portion of the said consignment was removed during the warehousing period. However, one portion thereof containing 7680 pieces remained in the warehouse.

5. A request was made by the Petitioner for extending the warehousing period under Section 61(1) of the Act in respect of the aforementioned B/Es. A personal hearing was granted to the Petitioner on 20th December 2013 by the Deputy Commissioner of Customs ("DC") (Bond) in respect of B/E Nos.1 and 2.

6. An Order-in-Original dated 31st December, 2013 was passed in respect of B/E No.1 confiscating the goods under Section 111 read with Section 111(d), (j) and (o) thereof. However, an option was given to GIL to redeem the goods confiscated by paying redemption fine of Rs.25,000/- in terms of Section 125(1) of the Act within 30 days of the said order. The order made it clear that "in case the redemption fine is not paid within time, ownership of the goods will vest with the Central Government in terms of Section 126 of the Customs Act, 1962." It was further stated that after redemption of the goods, GIL would be allowed a one-time clearance of the goods, within 30 days of the receipt of the order, on payment of duty and interest at the applicable rates under Section 61(2) of the Act read with Section 72(b) of the Act thereof. Additionally, a penalty of Rs. 10,000/- was imposed under Section 112 of the Act.

7. As far as B/E No. 2 is concerned, a separate order of the same date was passed confiscating the goods and giving an option to GIL to redeem the goods on paying a redemption fine of Rs.10,000