The Delhi High Court allowed the appeal of poor daily wage earners against seizure of agarwood chips and oil without pre-deposit.
The petitioners, Mohammed Akmam Uddin Ahmed & Ors, stated that they are earning their livelihood through agriculture and by selling small quantities of agarwood and that the goods seized were wrongly assessed at very high market value, and the penalty has been levied based on an incorrect assessment of the goods. The Petitioners have further submitted that their right of Appeal under Section 129E of the Customs Act cannot be exercised as they are not financially sound and hence, unable to pay the mandatory pre-deposit as required to challenge this levy.
The petitioners relied on Notification No. 45/2015-2020 dated November 29, 2021, on the Amendment in the Export Policy of Agarwood Oil and Agarwood Chips and Powder, stating that it is only by the amendment of the policy that the seized products have become prohibited.
The Department contended that agarwood is an endangered species and is covered under Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora and relied on the preliminary examination report dated September 20, 2019, which was given by the Wildlife Inspector. The report stated that the confiscated species is included in Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora and the export of the species of agarwood is prohibited.
A Division Bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju observed that “The valuation of the goods seized, is also not in terms of the prices as set forth in the Government of Assam’s Agarwood Policy. No proper calculation has been made for the penalty levied. The penalty imposed on the Petitioners has been imposed based on a provisional valuation. The penalty imposed is therefore without any legal basis and cannot be sustained.”
The Court concluded by noting that given the financial position and the wherewithal of the Petitioners, an opportunity needs to be given to them to contest the valuation so imposed by the pespondents, which, otherwise cannot be contested by them. Thus, we consider the case of the petitioners to be an appropriate case to exercise our discretion in the matter concerning waiver of pre-deposit of penalty.
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