Assessee Liable To Pay Redemption Fine For Seized Goods Missing From Their Custody: CESTAT
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that assessee liable to pay redemption fine for seized goods missing from their custody.
The Bench of Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) was addressing the issue of whether when the goods were seized handed over the assessee for safe custody and they went missing while in their custody, whether such goods can be confiscated or not.
In this case, Directorate of Revenue Intelligence received intelligence that M/s Akay Cones Pvt Ltd. and M/s Intrade Impex Pvt Ltd., the respondents, owned and controlled by Sh. H.M. Prabhakar were indulging in massive customs duty evasion.
After the goods was seized during investigation, they were handed over to the respondent under a superdaginama for their safe custody.
Later, on the direction of the High Court, the goods were jointly inspected by the department and the respondents. It was found that of the 2366 rolls of fabrics seized from M/s Akay Cones and handed over to them only 683 rolls were available and the remaining rolls went missing while in their custody.
The short point of dispute in this case is that the Commissioner had confiscated only those rolls of fabrics which were found during the joint inspection and imposed redemption fine in lieu of their confiscation but he did not impose any redemption fine with respect to all the rolls of fabrics which were lost while in the custody of the respondents and were not found during the joint inspection, although they were actually seized and were found missing while in the custody of respondent.
The Tribunal observed that the Commissioner did not confiscate the goods on the ground that they were not available. If the goods are seized, they can be confiscated or released. The Commissioner does not dispute that the goods were liable for confiscation. He did not confiscate the goods only to the extent that they were lost while in the custody of the respondents. This is not a case where the goods were not seized at all or where they were not available for seizure.
The goods were seized and the Commissioner found that they were liable for confiscation. After the seizure of the goods and before the adjudication proceedings, the goods were handed over to the respondents for safe custody. From their custody the goods went missing. The liability of the goods for confiscation does not get extinguished simply because the respondents had either diverted the goods or pilfered or were negligent to let the goods go missing from their custody, added the bench.
“If the goods are confiscated, they vest in the Central Government and the officer adjudging the confiscation shall take possession of the confiscated goods as per section 126 of the Act. Had the goods been not diverted or lost through the negligence while in the custody of respondents they would have been confiscated and they would have been vested in the Central Government. In our considered view, since the goods were lost by the respondents, they need to be pay a redemption fine in lieu of the goods” added the Tribunal.
In view of the above, the Tribunal allowed the appeal.
Case Title: Commissioner Of Customs (Preventive)-New Delhi V. M/S Akay Cones Pvt. Ltd.
Case Number: CUSTOMS APPEAL NO. 130 OF 2008
Counsel for Appellant/ Assessee: Nagendra Yadav
