Gor Sharian Vs Commissioner of Customs (Delhi High Court)
Delhi High Court strongly criticized the Customs Department for its handling of a case involving seized gold. The petitioner, a Russian citizen, had gold detained at IGI Airport. While the petitioner won an appeal for the gold’s release upon payment of a redemption fine and penalty, the Customs Department disposed of the gold without informing the petitioner or the court. The court had even earlier directed the release of the gold, unaware it had already been sold. The Customs Department then attempted to refund a fraction of the gold’s value, further reduced after deducting customs duty.
The court found the Customs Department’s actions to be arbitrary and untenable. The court emphasized that the Order-in-Appeal, directing the release and re-export of the gold, should have been followed. The court also highlighted the fact that the disposal of the gold was not communicated to the court during earlier proceedings related to the same matter. The court noted that the petitioner had paid the redemption fine and penalty, only to find the gold was already gone. The court questioned the lack of proper notification to the petitioner regarding the disposal, noting that an undated letter presented by the Customs Department lacked proof of delivery.
The court pointed out a series of failures: ignoring the Order-in-Appeal, disposing of the gold without proper intimation, accepting the redemption fine and penalty even after disposing of the gold, failing to inform the court about the disposal, and issuing a flawed refund order later corrected with a further reduced amount after deducting duty. The court deemed the Customs Department’s conduct unreasonable and arbitrary. The court clarified that a circular relied upon by the Customs Department regarding the valuation of disposed gold did not apply in this case, as the disposal itself was flawed.
The court ordered the Customs Department to pay the petitioner the full current market value of the gold within three weeks, plus costs if the payment is delayed. The court clarified that no further duty could be deducted, as the petitioner had already paid the redemption fine and penalty. The payment must be made directly to the petitioner’s bank account, details of which were to be provided via email. The High Court also directed the Customs Department to implement a system for notifying parties of the disposal of detained property both via email and mobile number to prevent similar situations from occurring in the future. The registry was directed to communicate the order to the Central Board of Indirect Taxes & Customs.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
