In Customs Appeal No.50601 of 2019 – CESTAT -  Revenue's action of auctioning goods during pendency of the appeal was unlawful, rules CESTAT (Delhi)
Member Anil Choudhary (Judicial) [18-05-2023]

Read Order: M/s. Oriental Trimex Limited v. Commissioner of Customs (Import)

Chahat Varma

New Delhi, May 23, 2023: Allowing the appeals filed M/s. Oriental Trimex Limited (appellant), the Principal bench of the Customs, Excise and Service Tax Appellate Tribunal has stated that the action taken by the Revenue to auction the goods while the appeals were pending was in violation of the law.

The issue in the appeals filed by the appellant was whether the Commissioner (Appeals) correctly confirmed the order-in-original, which held the imported rough marble blocks liable to confiscation under section 111(d) of the Customs Act, with the option to redeem the confiscated goods upon payment of a redemption fine, and a penalty was also imposed under section 112 of the Customs Act.

The appellant, argued that the court below incorrectly held that the goods were imported without the required import license, despite providing details of the license. They claimed that there was no malicious intent in not clearing the goods within the permitted time under section 48 of the Customs Act, attributing it to the severe recession in the economy and a lack of available funds. The appellant stated that due to adverse business conditions, the goods remained uncleared for approximately 25 to 30 months, leading to the issuance of the show cause notice.

The appellant also argued that upon receiving the auction notice from the Customs department, they promptly responded by stating that they had filed an appeal before the Commissioner of Customs (Appeals). However, the Department proceeded with the auction/sale of the goods without waiting for the disposal of the appeals.

The Tribunal relied on the ruling of the Delhi High Court in a previous case  involving the appellant with similar facts and circumstances (Oriental Trimex Ltd v. The Commissioner of Customs Import [LQ/DelHC/2022/4478]), wherein, the High Court had observed that the Revenue's action of auctioning the goods during the pendency of the appeal before the Commissioner (Appeals) was against the law. The High Court also agreed with the Commissioner (Appeals) that the appellant was entitled to a refund of the sale proceeds, with only the penalty amount being deducted, and no adjustment of redemption fine could be made. The High Court further stated that since the goods were not available, the redemption fine could not be adjusted against the sale proceeds while the appeal was still pending.