CESTAT Allows Interest On Auction Sale Proceeds From The Date The Amount Has Been Received By The Customs Dept., Till The Date Of Disbursal

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed interest on the auction sale proceeds from the date the amount was received by the Customs Department until the date of disbursal.

The Bench of Anil Choudhary, (Judicial Member), has observed that the department shall disburse the number of sale proceeds pursuant to auction sales by only adjusting the amount of penalty. No redemption fine can be adjusted.

The appellants/assessees imported rough marble blocks and filed 4 bills of entry from 26.07.2011 to 24.09.2013 at ICD, TKD, New Delhi. The appellant had also filed three other bills of entry for the import of rough marble blocks. Rough marble blocks were restricted goods and could only be imported with a specific license.

According to the appellant, due to financial difficulties, they could not clear the goods from customs, and the goods remained lying uncleared. The show cause notice was issued by the Customs Department in November 2013, proposing to confiscate the goods under Section 111(d), and a penalty was also proposed under Section 112.

In response, the appellant stated that although they have been in the trade for the last 10 years, they could not clear the imported consignment for home consumption as they were facing an acute financial crunch. Several purchase orders given by the builders and contractors were canceled due to the slowdown in the economy from 2009–2010.

At the relevant time, more than 10 containers were lying as such, pending clearance. Under these circumstances, demurrage and TSC charges, etc., become higher than the cost of the goods, and until and unless the shipping lines and Concor provide them with an adequate concession, it will be unviable for them to clear the goods.

It was also stated that they have imported against a "Special Import Licence" issued by DGFT, mentioning the license number and the date of issue. The appellant also sent a supplementary reply mentioning the details of the import license number, date of issue, quantity, value, validity period, etc., and also praying for a decision on merits.

The Adjudicating Authority passed separate orders, all dated November 10, 2014, confiscating the goods with the option to redeem on payment of a redemption fine under Section 112 of the Act.

The assessee contended that the appellant is entitled to a refund of the sale proceeds, reduced only by the amount of the penalty and that no adjustment of the redemption fine can be made.

The CESTAT found that the department, in terms of its notice to auction sale issued during 2014 and in spite of the appellant had sent a reply dated April 28, 2014, informing the pendency of their appeals, proceeded to dispose of the goods. No further opportunity was given by the Customs Department to give a fresh notice to the appellant after the disposal of the appeals by the Commissioner (Appeals).

Case Title: M/s.Oriental Trimex Limited Versus Commissioner of Customs (Import)

Case No.: Customs Appeal No.50601 of 2019 (SM)

Date: 18.05.2023

Counsel For Appellant: R.S. Yadav

Counsel For Respondent: Vishwa Jeet Saharan

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