IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.03.2011 CORAM THE HONOURABLE MR.JUSTICE T.RAJA W.P.Nos.26547 and 26548 of 2008 & M.P.No.1 of 2008 Sri Rama Subba Reddy Arava ... Petitioner in both W.Ps. Versus 1. The Joint Secretary Ministry of Finance (Department of Revenue) 14, Hudco Vishala Building, B Wing Government of India 6th Floor, Bhikaji Cama Place New Delhi – 110 066. 2. The Commissioner of Customs (Air Port) Anna International Terminal Chennai – 600 027 3. The Assistant Commissioner of Customs (Air Port – Admin) Anna International Terminal Chennai – 600 027 ... Respondents in both W.Ps. Prayer in W.P.No.26547 of 2008:- Writ Petition is filed under Article 226 of Constitution of India praying for the issue of Writ of Certiorari, calling for the records of the third respondent in F.No.C1/14/98, dated 12.09.2007 and quash the same. Prayer in W.P.No.26548 of 2008:- Writ Petition is filed under Article 226 of Constitution of India praying for the issue of Writ of Certiorari, calling for the records of the second respondent in F.No.380/56/B/97, dated 11.10.2006 and quash the same. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner : Mrs. K. Aparna Devi (in both W.Ps) For Respondents : Mr. T. Chandrasekaran (in both W.Ps) COMMON ORDER The petitioner has come to this Court by filing the present Writ Petitions under Article 226 of the Constitution of India, seeking for issuance of a Writ of Certiorari, calling for the records of the third respondent in F.No.C1/14/98, dated 12.09.2007 and the second respondent in F.No.380/56/B/97, dated 11.10.2006 and quash the same respectively. 2. When the petitioner arrived at the Chennai International Airport on 25.11.1996 by Flight No.A1 880, the officers of Air Intelligence Unit, Chennai, intercepted the petitioner-Shri. Rama Subba Reddy Arava on suspicion that he might be carrying contraband. On detailed examination of his baggage they recovered 5 gold biscuits with foreign markings totally weighing 582.8 grams concealed in various items like toilet soaps, emergency lamps etc. The said gold was also seized under a mazahar. The case was subsequently, adjudicated before the Additional Commissioner of Customs (Preventive) vide his order No. O.S.134/96-RD dated 09.12.1996, resultantly, the Officers confiscated all the gold biscuits and also imposed a penalty of Rs.5,000/- on the petitioner. Aggrieved by the said order, the petitioner filed an appeal before the Commissioner of Appeals, who in his O-in-A No.C.Cus.940/97 dated 28.08.1997, allowed the petitioner to redeem the confiscated gold on payment of fine of Rs.15,000/- and also upheld the penalty of Rs.5,000/- imposed by the lower adjudicating Authority. As against that order, the department filed Revision Application No.380/56/97-RC (Customs). The Revisional Authority by an order dated 11.03.1998 set aside the order in appeal restoring the original order passed by the Additional Commissioner. As against that, the petitioner challenged the said order by way of filing the Writ Petition in W.P.No.9976 of 1998. This Court by an order dated 13.07.2006, remanded the matter back for fresh consideration before the Joint Secretary. The Revisional Authority on completion of hearings by both sides, passed the final order dated 11.10.2006. By taking a lenient view, in the light of the liberalised policy in the import of gold and in view of the observations and directions of this Court, an option was given under Section 125 of the Customs Act, 1962 to the petitioner to redeem the same on payment of the same fine of Rs.15,000/- as determined in the order of Commissioner of Appeals even though the order of confiscation of seized goods was not assailed. As a result, the order of Commissioner of Appeal was also restored with regard to both redemption of fine and penalty. https://hcservices.ecourts.gov.in/hcservices/ 3. Therefore, the crux of the issue raised by the learned counsel appearing for the petitioner is that the order passed by the Revisional Authority dated 11.10.2006, the respondent department after deducting a fine of Rs.15,000/- and penalty of Rs.5,000/-, either they should have returned the gold biscuits confiscated to the petitioner or in the alternative, as they have sold the gold biscuits by deducting the fine of Rs.15,000/- and penalty of Rs.5,000/-, the rest of the amount should have been returned to them with simple interest at the rate of 9% per annum from the date of the order passed by the Revisional Authority viz., 11.10.2006. She also further contended that in the mean while, the Assistant Commissioner of Customs informed the petitioner that the entire 5 gold biscuits were sold on 09.09.1997 for a sum of Rs.2,62,500/-. Therefore, the Assistant Commissioner cannot be allowed to do so, in view of the earlier order passed by the Commissioner of Appeal dated 20.08.1997 allowing the petitioner to redeem the gold on payment of fine and penalty, she further contended that in any event the order passed by the Revisional Authority dated 11.10.2006, directing the authorities to return the property cannot be diluted after payment of fine of Rs.15,000/- and penalty of Rs.5,000/-. In support her submission, she relied upon a Judgment of Bombay High Court in Shabir Ahmed Abdul Rehman Vs. The Union of India and others reported in 2009 (235) ELJ 402 (BOM), in W.P.No.2488 of 1998, dated 03.12.2008, wherein the Division Bench of the Bombay High Court while dealing with the similar issue gave a direction to the Custom Authorities to deduct only a fine and penalty from the sale amount and issued a further direction to pay the balance amount with interest at the rate of 9% per annum from the date of revisional order. On that basis, she prayed for the similar order in her cases as well. 4. Opposing the above said submission, the learned counsel appearing for the respondents submitted that the petitioner is not entitled to the balance amount along with the interest because, the gold was confiscated and subsequently, the Assistant Commissioner also sold out the 5 gold biscuits which were admittedly confiscated on 12.09.2007. Thereafter, fine and penalty amounts were deducted from the sale proceeds and after adjusting the said amount the balance amount of Rs.82,092/- alone can be returned back to the petitioner. This argument advanced by the learned counsel appearing for the petitioner will not hold good. The reason being, the Revisional Authority by an order dated 11.10.2006 have finally settled the issue. In fact that order came to be passed only pursuant to the orders passed by this Court in W.P.No.9976 of 1998. Therefore, when the Revisional Authority has finally passed the order giving option under Section 125 of the Customs Act, 1962 to the petitioner to redeem the gold biscuit on payment of fine of Rs.15,000/- as determined in the order of Commissioner of Police along with a penalty of Rs.5,000/- as per order passed by the Additional Commissioner if Customs (Preventive), dated 11.10.2006, the respondent https://hcservices.ecourts.gov.in/hcservices/ has no other option except to return the entire proceedings of same by deducting the Rs.15,000/- and Rs.5,000/- towards fine and penalty respectively. However, in respect of the interest, the petitioner has sold out the 5 gold biscuits on 12.09.2007 and retained the money of the petitioner till now, therefore, it is appropriate for the respondents to pay the interest at the rate of 6% per annum from the Revisional Authorities order dated 11.10.2006 within a period of six weeks, failing which the petitioner is entitled to get interest at the rate of 9% per annum. Since, the Assistant Commissioner of Customs, sold out the 5 gold biscuits overlooking the order passed by the Commissioner of Appeal, dated 28.08.1997, allowing the petitioner to redeem the gold on payment of fine and penalty, I am of the view that the action of the Assistant Commissioner in selling the gold biscuits is contrary to the earlier order passed by the Commissioner of Appeal dated 28.08.1997. Therefore, the petitioner is entitled to receive the refund of the balance amount of Rs.2,42,500/- along with interest at the rate of 9% per annum from the date of receipt of the order passed by the Revisional Authority i.e. 11.10.2006. Admittedly, the goods were sold out by the Department on 09.09.1997 realising a sum of Rs.2,62,500/- as against the order of the Commissioner of Appeal dated 28.08.1997. Therefore, though the selling of the goods of the petitioner was wrong, however, after deducting the penalty and fine of Rs.5,000/- and Rs.15,000/- respectively, the respondents are directed to refund the balance amount with simple interest as ordered above. 5. With the above observation, the Writ Petitions stand disposed of. Consequently, the connected Miscellaneous Petition is closed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar smn To 1. The Joint Secretary Ministry of Finance (Department of Revenue) 14, Hudco Vishala Building, B Wing Government of India 6th Floor, Bhikaji Cama Place New Delhi – 110 066. https://hcservices.ecourts.gov.in/hcservices/ 2. The Commissioner of Customs (Air Port) Anna International Terminal Chennai – 600 027 3. The Assistant Commissioner of Customs (Air Port – Admin) Anna International Terminal Chennai – 600 027 +2ccs to Mr.P.Subba Reddy, Advocate Sr 21037 +1cc to Mr.T.Chandrasekaran, Advocate Sr 21078 VSN(CO) km/3.5. W.P.Nos.26547 & 26548 of 2008 https://hcservices.ecourts.gov.in/hcservices/