NORTHERN PLASTICS LTD. (NOW MERGED WITH A CONSOLIDATED PHOTO AND FINVEST LTD.) versus COLLECTOR OF CUSTOMS AND CENTRAL EXCISE

Citation: [1999] SUPP. 2 S.C.R. 679 · Decided: 17-09-1999 · Supreme Court of India · Bench: G.T. NANAVATI · Disposal: IA disposed

Judgment (excerpt)

NORTHERN PLASTICS LTD. (NOW MERGED WITH 
A 
CONSOLIDATED PHOTO AND FINVEST LTD.) 
,. 
·, 
v. 
COLLECTOR OF CUSTOMS AND CENTRAL EXCISE 
SEPTEMBER 17, 1999 
B 
~· 
(G.T. NANAVATI AND S.N. PHUKAN, JJ.] 
.;:' 
Customs: 
'. 
Customs authorities-Liability to refund value of goods confiscated c 
....... 
and sold-Import of goods-Confiscation-Pending appeal before Supreme 
Court customs authorities selling the goods-Order of confiscation held 
illegal-Application filed by importer seeking direction to customs authorities 
to return to the applicant value of the· goods with interest-Held, applicant 
is entitled to value of goods, less the duty payable thereon-Applicant is also D 
• .r 
entitled tO 12% interest-Plea that importer should file an action in tort if 
it suffered loss and this Court cannot order payment, rejected-Constitution 
of India-Article 142 r!w Rule 6 of Order 47 of Supreme Court Rules, 1966. 
~ 
The applicant imported certain goods and, on 11.1.1989, filed a bill of 
I 
entry for their clearance. The customs authorities were of the opinion that E 
the goods were not correctly classified and were not entitled to exemption 
from excise duty and countervailing duty. By an interim order dated 27.4.1989 
the Gujarat High Court ordered release of the goods, but as the said order 
was challenged before this Court, the goods could not be released. On 
14.9.1989 the Collector of Customs ordered confiscation of the goods. The 
applicant after unsuccessfully challenging the order before the Customs, F 
Excise and Gold (Control) Appellate Tribunal, filed an appeal before this 
Court. 
Meanwhile the customs authorities sold the goods. This Court 
ultimately set aside the order dated 14.9.1989 passed by the Collector as also G 
that passed by the CEGAT, holding that the goods were not misdeclared and 
were eligible for import under OGL. It further held that the goods were not 
'· 
liable to confiscation. 
-·;. 
Since the customs authorities had sold the goods, the applicant filed 
the present applications for a direction under Article 142 of the Constitution H 
679 
680 
SUPREME COURT REPORTS [1999] SUPP. 2 S.C.R. 
A read with Order 47 Rule 6 of the Supreme Court Rules, 1966 to the 
respondent to return the value of the goods with interest. 
It was contented for the applicants that during the pendency of the 
appeals, the respondents should not have sold the goods without obtaining 
orders of this Court; that the respondents had wrongly prevented clearance 
B of the goods for consumption of the applicants and wrongfully confiscated 
and sold them away; and that since the order of confiscation had been set 
aside, the respondents were liable to return the value of the goods with 21 % 
interest from 21.12.1988 till payment thereof. The respondents, on the other 
hand, contended that the goods had specific expiry date and were required 
C to be stored in an airconditioned place; that on failure of the applicant to 
clear the goods inspite of the time having been given to it, the goods were 
sold by negotiations for Rs. 48.50 Lacs; that the customs duty payable on the 
goods was assessed at Rs. 48.50 lacs, which was to be paid by the applicants, 
besides Rs. 2,52,244 to be paid to the Central Warehousing Corporation as 
storage charges; and, therefore, the applicant was not entitled to any amount 
D at all. 
Allowing the application, the Court 
HELD: 1. The order of confIScation of goods having been held to be bad, 
the goods were required to be returned to the owner thereof. But, since the 
E goods have been sold away by the respondents, they are liable to return to 
the appellant the money value of the said goods. Having made all attempts to 
prevent the release of the goods in favour of the applicant, the respondents 
cannot now contend that the applicant, and not they, was really responsible 
for deterioration of the goods and the consequent less realisation of price. 
F 
[683-D-E, GJ 
2. Since the import of the goods was by the applicants, as soon as the 
goods landed on the land oiass of India, proper amount of duty became payable 
thereon. The applicant has become entitled to the value of the goods as on 
the date or time when the goods ought to have been cleared by the respondents 
G for home consumption. Though the value of the goods as shown in the import 
documents was only Rs. 33.04 lacs-, it would be reasonable to presume that 
an importer would have imported the goods of the value of Rs. 33.04 lacs if 
its valu

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