Dismissed

The Commissioner of Customs, v. Shri.Vikram Jain @Veerchand Jain

Madras HC29 Sept 2021WA/2451/2021

Case brief

AI extract

What is this about?

A Writ Appeal by Customs Commissioners challenging a Single Bench order staying the auction of 178 seized watches. The Court held that since the respondent complied with pre-deposit requirements and the Tribunal listed the appeal, the auction must await the Tribunal's decision, dismissing the appeal.

What did the court decide?

Direction to the appellant/Department not to initiate coercive action, retain seized watches, and await the decision of the Tribunal.

The Commissioner of Customs, Vs Shri.Vikram Jain… — Property and Title | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 29.09.2021

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CORAM :

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THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM

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AND

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THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP

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W.A.No.2451 of 2021

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and

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C.M.P.No.15721 of 2021

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1.The Commissioner of Customs,
 Chennai - III Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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2.The Commissioner of Customs,

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 Chennai - II Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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3.The Commissioner of Customs,
 Chennai - IV Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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4.The Additional Commissioner of Customs,
 SIIB, Chennai - III Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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5.The Deputy Commissioner of Customs,

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 SIIB, Chennai - III Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001. ... Appellants

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Vs.

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https://hcservices.ecourts.gov.in/hcservices/

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Shri Vikram Jain @ Veerchand Jain
M/s.Navratna, Shop.No.23, No.90, 1st Floor,
Singapore AC Shopping Complex,
Patni Plaza,

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Chennai - 79.

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 ... Respondent

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Prayer : Writ Appeal filed under Clause 15 of the Letters Patent
to set aside the order in W.P.No.10066 of 2021 dated 23.04.2021.

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Prayer in W.P.No.10066 of 2021: Writ Petition filed under
Article 226 of the Constitution of India praying to writ of
Mandamus Forbearing the Respondents herein in auctioning 178
Nos. Of watches seized from the petitioner pending disposal of
the petitioner's appeal pending before the customs Excise and
service Tax Appellate tribunal south Zonal Bench Chennai in
Diary No. 402202020 against the order in Appeal No.Seaport
C.Cus.II.No. 700/2019 dated 05.12.2019.

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For Appellants : Mr.A.P.Srinivas

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 Senior Standing Counsel

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For Respondent: Dr.S.Krishnanandh

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J U D G M E N T
(Judgment was delivered by T.S. SIVAGNANAM, J.)

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This Writ Appeal filed by the Commissioner of Customs,
Chennai-III, Commissionerate, is directed against the order,
dated 23.04.2021, in W.P.No.10066 of 2021.

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2.The said writ petition was filed by the respondent to
forbear the appellants from auctioning the 178 watches seized
from the respondent till the disposal of the appeal filed by the
respondent before the Customs, Excise and Service Tax Appellate
Tribunal (“CESTAT” for brevity) against the Order-in-Appeal,
dated 05.12.2019, passed by the Commissioner of Customs
(Appeals-II), Chennai.

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3.The said appeal was preferred by the respondent,
challenging the Order-in-Original dated 24.09.2018, in and by
which, the Additional Commissioner of Customs (Chennai-III),
directed confiscation of 178 foreign made watches of various

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https://hcservices.ecourts.gov.in/hcservices/

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brands under Sections 111(d) and 111(m) of the Customs Act, 1962
(“the Act” for brevity), revalued the confiscated watches at
Rs.79,03,440/- for the purposes of the Act with an option to
redeem the 178 watches under Section 125 of the Act on payment
of redemption fine of Rs.7,00,000/- and that, on payment of such
redemption fine, the respondent shall pay appropriate Customs
Duty under Section 125(2) of the Act on the revalue of the 178
watches and imposed penalty of Rs.3,00,000/- on the respondent
under Section 112(b) of the Act.

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4.The respondent, being aggrieved by the order dated
24.09.2018, preferred appeal before the First Appellate
Authority, questioning the correctness of the order passed by
the Original Authority. The appeal filed by the respondent was
disposed of by reversing the Order-in-Original, dated
24.09.2018, and directing absolute confiscation of the seized
178 foreign brand watches and confirming the imposition of
penalty on the respondent. To be noted that the Original
Authority, while passing the order dated 24.09.2018, though in
the show cause notice, has proposed to confiscate a sum of
Rs.19,00,000/- which was recovered from the respondent, the
proposal was dropped in the Order-in-Original. In the
respondent's appeal before the Commissioner of Customs (Appeals-
II), Chennai, the First Appellate Authority reversed such
decision as well.

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5.Aggrieved by the order passed by the First Appellate
Authority, the respondent has preferred an appeal before the
Tribunal and we are informed that the Tribunal has directed the
matter to be listed before the Hon'ble Division Bench during
November, 2021.

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6.The legal question which may arise before the Tribunal
is as to whether, in an appeal filed by the respondent,
aggrieved by the Order-in-Original dated 24.09.2018, the
respondent can be put to a disadvantageous position, in other
words, in an appeal filed by the respondent, can an order
adverse to the interest of the respondent be passed, when
admittedly, such portion of the order was not questioned before
the First Appellate Authority.

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7.In the case on hand, the Original Authority directed
redemption of the seized goods on payment of redemption fine and

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https://hcservices.ecourts.gov.in/hcservices/

¶38

appropriate Customs Duty. The respondent was on appeal before
the First Appellate Authority, questioning the correctness of
the entire order, that is, on the revaluation of the goods, on
imposition of redemption fine and payment of Customs Duty and
penalty. The First Appellate Authority, therefore, would be
required to test the correctness of the order passed by the
Original Authority and if he does not agree with the order, he
made set aside the order, but the respondent cannot be worse off
in his own appeal filed before the First Appellate Authority.
In any event, this question is required to be agitated before
the Tribunal in the appeal which has been filed by the
respondent.

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8.During the pendency of the appeal, it appears that the
Department took steps to dispose of the seized watches, which
permitted the petitioner to file the Writ Petition. During the
pendency of the appeal before the CESTAT, it would not be
appropriate for the Department to dispose the seized goods,
especially when the Tribunal has directed the appeal to be heard
during November, 2021, and furthermore, the Original Authority
has directed redemption of the seized watches on payment of
redemption fine and appropriate Customs Duty. Therefore, the
appellant/Department has to necessarily await the decision of
the Tribunal and abide by the direction that has been issued by
the Tribunal.

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9.The learned Single Bench, after taking note of the
objections raised by the appellant, by referring to Circular
No.1053/2/2017-CX, dated 10.03.2017, which has laid down
guidelines for recovery proceedings during pendency of
litigation, has noted that the Pre-Deposit has been effected by
the respondent while approaching the Tribunal, therefore, the
appellant/Department cannot initiate any recovery proceedings
consequent upon the Order-in-Appeal, dated 05.12.2019.

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10.The learned Senior Standing Counsel appearing for the
appellants submitted that the contention which was raised before
the learned Single Bench was that the Circular, dated
10.03.2017, would not be applicable, as the said Circular deals
with recovery during pendency of litigation and the contention
of the Department was that the watches will deplete in value and
because of the electronic items, battery, etc., they are to be
treated as perishable goods and in the event if the goods are

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https://hcservices.ecourts.gov.in/hcservices/

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not auctioned, the Department will not be able to recover the
Duty, penalty, etc., as the value will diminish.

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11.In our considered view, the effect of the Circular
dated 10.03.2017 need not be gone into in the instant case, as
the respondent has complied with the Pre-Deposit condition for
preferring the appeal before the CESTAT and the appeal has been
directed to be listed for final hearing before the Division
Bench during November, 2021. Therefore, the steps taken by the
appellant/Department for auctioning the goods have to
necessarily be deferred and await the decision of the Tribunal
in the appeal filed by the respondent.

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12.For all the above reasons, the Writ Appeal fails and
it is dismissed with a direction to the appellant/Department not
to initiate any coercive action against the respondent, as the
respondent has complied with the Pre-Deposit condition in terms
of 129(E) of the Act and the watches which have been seized
shall continue to be retained as such and not put up for auction
and the appellant/Department shall await the decision of the
Tribunal and abide by the same. No costs. Consequently,
connected Miscellaneous Petition is closed.

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Sd/-

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Assistant Registrar (CS-VI)

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Sub Assistant Registrar

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jeni/mkn

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To

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1.The Commissioner of Customs,
 Chennai - III Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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2.The Commissioner of Customs,
 Chennai - II Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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https://hcservices.ecourts.gov.in/hcservices/

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3.The Commissioner of Customs,
 Chennai - IV Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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4.The Additional Commissioner of Customs,
 SIIB, Chennai - III Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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5.The Deputy Commissioner of Customs,
 SIIB, Chennai - III Commissionerate,
 Custom House, No.60, Rajaji Salai,
 Chennai - 600 001.

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+1CC to M/s.A.P.Srinivas, Advocate, SR.No. 50404
+1CC to Dr.S.Krishnanandh, Advocate, SR.No. 51026

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W.A.No.2451 of 2021

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RP(CO)
B.VC (21/10/2021)

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https://hcservices.ecourts.gov.in/hcservices/

The Commissioner of Customs, v. Shri.Vikram Jain @Veerchand Jain

Case brief

What is this about?

What did the court decide?

The Commissioner of Customs, v. Shri.Vikram Jain @Veerchand Jain

Case brief

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