Mahesh Zaveri vs Commissioner of Customs (Preventive)

On 2 June, 1986, the Collector of Customs (Preventive), Mumbai, passed an order by which gold ornaments weighing 1038 gms seized from the petitioner were confiscated u/s 71 of the Gold (Control) Act, [1968] and a penalty of Rs. 50,000/- was imposed on the petitioner. The Collector permitted redemption on payment of a redemption fine of Rs. 1,00,000/- to be exercised within 3 months from the receipt of the order. In respect of the ''primary gold i.e. two crude gold chains'' weighing 1172 gms which were also seized from the Petitioner, the Collector ordered absolute confiscation and imposed a penalty of Rs. 40,000/-. Aggrieved by the order of the Collector, the Petitioner filed an Appeal before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal by its order dated 4 May 1992 sustained the order of absolute confiscation of the two crude gold chains weighing 1172 gms and a penalty of Rs. 40,000/-. In respect of the 1038 gms of gold ornaments, the redemption fine of Rs. 1,00,000/- was reduced to Rs. 60,000/- and the penalty imposed on the Petitioner was set aside. In these proceedings filed under Article 226 of the Constitution, the petitioner seeks to challenge the communication dated 16 December, 2011 of the Commissioner of Customs (Preventive) rejecting the representation of the petitioner dated 23 August, 2011, and prays for the return of the gold ornaments or in the alternative, the payment of the sale proceeds together with interest.

According to the petitioner, he had approached the Revenue for release of the gold ornaments and also paid a fine of Rs. 15,000/- on 20 August, 1991 against the penalty of Rs. 40,000/- and addressed several letters to the Authorities stating that he is ready to pay the redemption fine and penalty. The Petitioner had averred in the Petition that he had addressed letters dated 8 June 1992, 14 October, 2002, 28 January, 2009, 18 February, 2009 and 8 December, 2009 to the Authorities in that regard. The Petitioner has adverted to a representation dated 8 February, 2010 made by him. The petitioner has also made a grievance that he ought to have been heard before the gold was sold in October, 2010 and there has been a violation of the principles of natural justice. The petitioner, in the circumstances, seeks return of the gold ornaments or in the alternative the sale proceeds with interest.

An affidavit in reply has been filed by the Assistant Commissioner of Customs in order to traverse the allegations contained in the Petition. According to the Revenue, the petitioner had failed to exercise the option of payment of redemption fine even after a lapse of more than 15 years after passing of the order of the Tribunal dated 4 May 1992, despite opportunities being given to him. The Affidavit in reply adverts to a letter dated 28 July 1997 whereby the Superintendent of Customs (Preventive), Gold Control, had informed the Petitioner that the Commissioner of Customs (Preventive) had ordered absolute confiscation of gold ornaments and he had not exercised the option of payment of redemption fine. The confiscated goods were ultimately sold on 5 October 2010 as the ownership of the confiscated goods vested with the Government. It is stated in the reply that there is no requirement of notice to be given before the disposal of the gold ornaments once they vest with the Central Government and there has been no violation of the principles of natural justice.

Having heard the learned Counsel for the Petitioner and learned Counsel for the Revenue, we find that the Petitioner was himself to blame in not paying the redemption fine within a period of three months from the date of the order of Tribunal dated 4 May 1992 or at least within a reasonable period after passing of the said order. The option of redemption was granted to the Petitioner which he failed to exercise within a reasonable period. About two decades have elapsed since the order of the Tribunal and the filing of the present Petition and by no stretch of imagination can this be regarded as a reasonable period. The Superintendent of Customs (Preventive), Gold Control, by a letter dated 8 July 1997 (in reply to the letter dated 1 July, 1997 of the Petitioner), had informed the Petitioner that the Commissioner of Customs had ordered absolute confiscation of gold ornaments. Pertinently in his letter dated 18 February, 2009 addressed to the Assistant Commissioner of Customs (Preventive), the petitioner has stated as follows:

....I admit that I have made an enormous delay in paying redemption fine and penalty imposed on me by the Hon. Judge of CEGAT and the Honourable Collector of Customs. Due to severe financial crunch I was unable to make the payment of above fine and penalty.

The gold being vested absolutely in the Union Government, no fault can be found in the action that was pursued of selling of confiscated property. In these circumstances, the prayer for the return of the gold ornaments or in the alternative, for the payment of sale proceeds, cannot be acceded to. There is no merit in the petition. The petition shall accordingly stand dismissed.