CESTAT allows Interest on Auction Sale Proceeds from Date of receipt of Amount by Customs Department till Date of Disbursal [Read Order]

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

The issue involved is whether the Commissioner (Appeals) have rightly confirmed the order-in-original, by which the imported rough marble blocks were held liable to confiscation under Section 111(d) of the Customs Act with option to redeem on payment of redemption fine and further penalty was also imposed under Section 112 of the Customs Act.

According to the appellant, M/s Oriental Trimex Limited, due to financial difficulty, they could not clear the goods from the Customs and the goods remained lying un-cleared. Accordingly, show cause notice was issued by the Customs Department in November, 2013 proposing to confiscate the goods under Section 111(d) of the Customs Act and penalty was also proposed under Section 112 of the Customs Act.

The Counsel for the appellant submitted that the order of the Court below is in contravention of the legal provisions and settled judicial precedents. Further, the facts have not been rightly appreciated. The impugned order is cryptic and non-speaking. In spite of the details of licence, given before the Court below, it has been erroneously held that the goods were imported without the required import licence.

The Counsel further contended that the Department without waiting for the disposal of the appeals, proceeded to auction/sale the goods. Such action of Revenue to auction/sale the goods, pending disposal of appeals, is bad in law and against the principles of natural justice.

The Tribunal of Anil Choudhary, Member (Judicial) observed that “Revenue shall disburse the amount of sale proceeds pursuant to auction sales by only adjusting the amount of penalty. No redemption fine can be adjusted. Further, the appellant shall be entitled to interest on the auction sale proceeds from the date the amount has been received by the Customs Department, till the date of disbursal, rate of interest will be as per the Rules.”

To Read the full text of the Order CLICK HERE

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