Case Law Details
Gillette India Ltd. Vs Commissioner of Customs & Ors. (Delhi High Court)
(a) Once there is a failure to pay the redemption fine in lieu of confiscation as determined under Section 125 of the Customs Act, 1962, within the time stipulated, the consequence of the ‘confiscation’ becoming absolute and the confiscated goods vesting absolutely in the central government inevitably has to follow in terms of Section 126 of the Act. The consequence is the same whether the goods are “prohibited goods” or “other goods”.
(b) Sections 125 and 126 of the Customs Act, 1962 form one continuous scheme and are not to be read disjunctively. Once the vesting of the goods in the government is absolute, it would be inconsistent with the character of that vesting to contend that the Central Government can only recover through the sale of such goods the duty, penalty and interest and should return the excess to the owner/possessor of the goods.
(c) Therefore, this Court is unable to concur with the DB which decided MMTC v. Surjit Singh Kanda (supra) that on a collective reading of Sections 125 and 126 of the Act, the Customs Department is precluded from retaining the excess sale proceeds after adjustment of duty, penalty and interest.
The question referred to this Bench is answered in the affirmative by holding that under Sections 125 read with Section 126 of the Customs Act, 1962 where the redemption fine in lieu of confiscation is not paid within the time stipulated, the Central Government is entitled to retain the excess auction sale proceeds of the confiscated goods, after adjustment of the duty, penalty, interest and other statutory dues. The central government in such circumstance is under no obligation to return the excess amount to the importer. MMTC v. Surjit Singh Kanda (supra) to the extent it holds to the contrary is accordingly overruled.
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