LexM/S NAVAYUGA ENGINEERING CO. LTD. versus UNION OF INDIA & ANR.
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[2024] 7 S.C.R. 1183 : 2024 INSC 547 M/s Navayuga Engineering Co. Ltd. v. Union of India & Anr. (Civil Appeal No. 1024 of 2014) 23 July 2024 [Pamidighantam Sri Narasimha* and Aravind Kumar, JJ.] Issue for Consideration (i) Whether there is a liability to pay customs duty when the confiscated goods are redeemed after payment of fine under Section 125 of the Customs Act, 1962; (ii) Whether, the liability to pay such duty will include the liability to pay interest on delayed payment under Section 28AB of the Act; (iii) What is the true and correct ratio of the decision in Jagdish Cancer case. Headnotes† Customs Act, 1962 – s.125 – Whether there is a liability to pay customs duty when the confiscated goods are redeemed after payment of fine under Section 125 of the Customs Act, 1962: Held: The owner of goods has a liability to pay customs duty, even after confiscated goods are redeemed after payment of fine and other charges under Section 125 of the Act – When confiscation proceedings are initiated under Section 124 of the Act, the obligation to pay duty and other charges under Section 125(2) will arise only when the owner of goods exercises the option to pay fine for redemption of goods and the Department accepting it. [Paras 8.2, 8.4] Customs Act, 1962 – Whether, the liability to pay such duty will include the liability to pay interest on delayed payment under Section 28AB of the Act: Held: The text of Section 125(2) clearly provides that, where any fine in lieu of confiscation of goods is imposed under sub-Section (1), the owner of such goods shall be ‘liable to any duty and charges payable with respect to such goods’– The sub-section provides that the liability to any duty and charges, that are payable, shall be paid in addition to the fine – Section 28 would come into operation for assessing and determining the duty and other charges payable with * Author 1184 [2024] 7 S.C.R. Digital Supreme Court Reports respect to goods redeemed under Section 125(2) – Once Section 28 applies for determination of duty obligation arising under Section 125(2), the interest on delayed payment of duty arises under Section 28AB – The said provision obligates payment of interest in addition to the duty – Thus, the question is answered by holding that the interest liability under Section 28 AB is also attracted. [Para 10.1] Customs Act, 1962 – What is the true and correct ratio of the decision in Jagdish Cancer case: Held: Jagdish Cancer case is not an authority for the proposition that when the liability to pay customs duty has occasioned under Section 125, the calculation, determination or the assessment of such duty cannot be made under Section 28. [Para 9.6] Case Law Cited Commr. of Customs (Import) v. Jagdish Cancer and Research Centre [2001] Supp. 1 SCR 245 : (2001) 6 SCC 483; Union of India v. M/s Security and Finance (P) Ltd. [1976] 2 SCR 87 : (1976) 1 SCC 166; Fortis Hospital Ltd. v. Commr. of Customs, Import [2015] 4 SCR 456 : (2015) 12 SCC 715 – referred to. List of Acts Customs Act, 1962. List of Keywords Custom duty; Liability to pay custom duty; Confiscated goods; Fine; Payment of fine; Redemption of confiscated goods after payment of fine; Section 125 of the Customs Act, 1962; Liability to pay interest on delayed payment; Section 28AB of the Customs Act, 1962; True and correct ratio of the decision in Jagdish Cancer case. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1024 of 2014 From the Judgment and Order dated 29.08.2009 of the High Court of Bombay in WP No. 1387 of 2009 Appearances for Parties Ms. Charanya Lakshmikumaran, Ms. Apeksha Mehta, Ms. Neha Choudhary, Ms. Umang Motiyani, Ms. Jyoti Pal, Ayush Agrawal, Ms. Falguni Gupta, M. P. Devanath, Advs. for the Appellant. [2024] 7 S.C.R. 1185 M/s Navayuga Engineering Co. Ltd. v. Union of India & Anr. N Venkataraman, A.S.G., V C Bharathi, Ms. Amritha Chandramoulli, S A Haseeb, Kritagya Kait, Udai Khanna, Mukesh Kumar Maroria, Advs. for the Respondents. Judgment / Order of the Supreme Court Judgment Table of Contents* 1. Introduction: ........................................................................ 2 2. Facts: .................................................................................. 3 3. Sections 11 and 12 of the Act: ............................................. 6 4. Section 28 of the Act: .......................................................... 7 5. Confiscation of goods under Chapt
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