The High Court of Madhya Pradesh has imposed a cost of Rs.25,000 on the importer for concealing crucial information regarding the final confiscation order passed by the Customs Excise and Service Tax Appellate Tribunal (CESTAT).
The court also held that the provisional release of seized currency is not possible after the final confiscation order is passed.
The court found that the petitioner importer, Hitesh Nagwani, represented by Shri Alok Yadav had filed a writ petition seeking provisional release of seized currency while withholding the fact that a final order of confiscation had been already issued against them.
The case revolved around a shipment of Nutrition Supplements imported by M/s. Rudras Overseas and their subsequent detention by the Directorate of Revenue Intelligence (DRI), Indore.
Hitesh Nagwani, whose residential premises were also searched during the investigation, sought the provisional release of the seized currency amounting to Rs.82,67,900 and USD 5000.
The department rejected his request, prompting Nagwani to appeal to the Customs Excise and Service Tax Appellate Tribunal (CESTAT).
The CESTAT ruled in favor of Nagwani, setting aside the rejection of his request for provisional release.
However, unbeknownst to the court at the time, a subsequent development had taken place. The Principal Commissioner of Customs (Adjudication), Mumbai, had passed a final order confiscating the seized currency and imposing substantial penalties on Nagwani. This order was passed after the CESTAT’s ruling but before the currency could be released.
The petitioner argued that the petitioner’s remedy was to challenge the order of confiscation before the appropriate authority and the court concurred with this viewpoint.
The court acknowledged that there was no denial of compliance with the CESTAT’s order for provisional release, but the subsequent events had altered the situation.
The bench noted that Nagwani failed to disclose the final order of confiscation while filing the writ petition seeking provisional release.
The court stated that had this information been provided, the petitioner’s premise would have been different, as the order of confiscation took precedence over the CESTAT’s provisional release ruling.
The court rejected Nagwani’s argument that the order of the CESTAT was binding and that the subsequent order of confiscation was appealable.
The bench pointed out that the order of confiscation had been passed by a competent authority and the matter could indeed be appealed, but the mere pendency of an appeal did not invalidate the confiscation order.
The bench highlighted the principle of judicial discipline and emphasised that the order passed by the Collector (Appeals) and CESTAT was binding on all adjudicating and appellate authorities. However, in this case, while the subordinate authorities had not denied compliance with the CESTAT’s provisional release order, the subsequent order of confiscation took precedence and made the provisional release order non-complying.
In result, the division bench comprising Justice Vivek Rusia and Justice Pranay Verma dismissed the writ petition and posed a cost of Rs. 25,000 on the petitioner for failing to disclose the final order of confiscation during the filing of the petition. The cost was directed to be deposited with the M.P. State Legal Services Authority.
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