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2016 Supreme(Mad) 1525
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, D. KRISHNA KUMAR, JJ.
The Additional Director General & Ors. - Appellants
Versus
Mr. Abhishek Mundra - Respondent
W.A. Nos. 954 and 1056 of 2014; M.P. Nos. 1, 1 and 2 of 2014
Decided On : 03-06-2016
Advocate Appeared:
For the Appellants : Mr. Velayutham Pichaiya, Mr. T. Chandrasekaran
For the Respondent: Mr. V.T. Gopalan, M/s. M.C. Gan Law Firm
The main legal point established in the judgment is the application of the Customs Act, particularly Sections 110A and 111, to determine the conditions for the provisional release of seized goods.
Headnote:
Gold Bars - Customs Act - Section 110A, Section 111 - The court discussed the provisions of Section 110A and Section 111 of the Customs Act, 1962, which deal with the provisional release of goods and confiscation of improperly imported goods. The court's decision was influenced by the interpretation of these provisions and their application to the case, leading to the imposition of conditions for the release of the seized gold bars.
Fact of the Case:
The case involved the appeal against an interim direction to provisionally release 15.160 Kgs of Gold Bars seized under the Customs Act, 1962. The respondent claimed to be engaged in the business of buying and selling gold and silver bullion bars, while the appellants contended that the gold bars were smuggled goods from Bangladesh.
Finding of the Court:
The court found that the seized gold bars were subject to adjudication proceedings and imposed conditions for their release to safeguard the interests of the revenue.
Issues: The issues included the nature of the seized gold bars, the alleged smuggling, and the appropriateness of the provisional release of the gold bars by the Writ Court.
Ratio Decidendi: The court's decision was based on the interpretation and application of the Customs Act, specifically Sections 110A and 111, to determine the conditions for the provisional release of the seized gold bars.
Final Decision: The Writ Appeals were disposed of with the imposition of conditions for the release of the seized gold bars, including the requirement for a bank guarantee to cover the entire value of the gold bars.
S. Manikumar, J.
W.A. No. 954 of 2014 is filed by the Additional Director General and Senior Intelligence Officer, Directorate General of Revenue Intelligence, Chennai, against the order made in M.P. No. 3 of 2014 in W.P. No. 5663 of 2014, dated 04.07.2014.
2. W.A. No. 1056 of 2014 is filed by the Joint Additional Commissioner of Customs (Airport), Chennai, against the order made in M.P. No. 3 of 2014 in W.P. No. 5663 of 2014, dated 04.07.2014.
3. Order challenged in both the appeal is an interim direction, directing the appellants to provisionally release 15.160 Kgs., of Gold Bars to the respondent, seized vide Mahazar, dated 14.10.2013, drawn by the officials of the appellant, from the respondent, Mr. Abhishek Mundhra, at Kamaraj Domestic Terminal, Meenambakkam, Chennai, in terms of Section 110-A of the Customs Act, 1962, pending disposal of W.A. No. 5663 of 2014.
4. Material on record discloses that earlier, while admitting W.P. No. 5663 of 2014, this Court, by order, dated 25.02.2014, issued directions to provisionally release the gold, subject to certain conditions. Being aggrieved by the same, the appellants have preferred W.A. No. 412 of 2014. After going through the materials on record, a Hon'ble Division Bench of this Court, vide order, dated 03.04.2014, at Paragraph 5, ordered as hereunder:
“5. Aggrieved by the order passed by the High Court, Khazan Singh has filed this appeal. It was submitted by the learned counsel for the appellant that the Collector's order appointing the appellant having become final as it was not set aside by any of the appellate authorities, no direction could have been given by the Collector to invite fresh applications and decide who should be appointed as the Lambardar. In our opinion, this contention deserves to be accepted. Even the learned counsel for the respondent conceded that so long as the appointment of Khazan Singh as Lambardar is not cancelled, it is not permissible to invite fresh applications.....”
5. Before the Writ Court, the respondent has contended that he was engaged in the business of buying and selling Gold and Silver Bullion Bars from banks and local dealers. All the purchases and sales of gold and silver bullion bars are covered by proper and valid documents. He also contended that he was also registered with commercial tax department and an assessee on its file. According to him, during the course of such business, on 14.10.2013, the respondent carried 15193 grams of scrap gold for manufacturing purposes from Kolkatta by flight to Chennai. He was authorised to carry gold items. Carrying gold was disclosed to the authorities. Therefore, before the Writ Court, contention has also been raised that the appellants have issued a show cause notice to him, which is the subject matter of another writ petition, pending before this Court.
6. Reliance was also made by the respondent to a decision of the Hon'ble Apex Court in Commissioner vs. Navasakthi Industries Private Limited) reported in 2011 (269) ELT A 146 (SC), wherein, the Hon'ble Supreme Court has issued directions to release the gold articles, subject to certain conditions. Reliance has also been made to an order passed by a Division Bench of this Court in W.A.No.582 of 2011, wherein, this Court has directed the appellants to release the gold jewellery, on depositing 50% of the entire customs duty.
7. Per contra, before the Writ Court, the appellants have contended that the goods in question have been purported to be smuggled goods from Bangladesh and therefore, if the gold articles are ordered to be released, the respondent may conveniently erase the foreign markings embedded in those gold articles and in which event, the department would not in a position to effectively conclude the adjudication proceedings. It is also their contention that in connection with the adjudication proceedings, a show cause notice has been issued to the respondent, which is subject matter of challenge in another writ petition. Therefore, the
