Is the assessee required to pay rent to the Revenue if seized goods of the assessee were stored in CWC warehouse although the adjudicating authority did not pass any order regarding the same?

PJ/Case Law /2016-17/3404

Case:-SUREN INTERNATIONAL Versus COMMISSIONER OF CUSTOMS, NEW DELHI

Citation:-2016 (335) E.L.T. 171 (Tri. - Del.)

Brief facts:-The appellant is in appeal against the impugned order denying refund claim filed by the appellant rent paid on behalf of the Revenue to CWC warehouse.
The facts of the case are that some investigation was conducted against the appellant and some imported goods as well as indigenous goods were seized. The seizure of imported goods is not in question. The indigenous goods seized were taken to new custom house and stored thereof. During the pendency of adjudication without intimating to the appellant, Revenue shifted the goods in question to CWC warehouse. After adjudication took place, the goods were allowed to be redeemed by the appellant on payment of redemption fine and various penalties thereon along with duty. When the appellant asked for release of the goods on payment of duty, redemption fine and penalty as imposed thereon by the adjudicating authority, the appellant was asked to pay an amount of Rs. 33,99,896/- on account of rent through Demand Draft/Pay Order in favour of the Commissioner of Customs (Preventive), NCH, New Delhi. As the appellant was in need of the goods, the appellant paid the amount under protest. Later on, filed refund claim of the amount deposited by them on account of rent to the Commissioner of Customs (Preventive), NCH, New Delhi. The refund claim was rejected by the adjudicating authority holding that the refund claim is barred by limitation and as the rent has been paid to CWC warehouse for storage of goods owned by the appellant, therefore, the appellant is required to pay rent. In these circumstances, the refund claim is not maintainable. On appeal before the ld. Commissioner (Appeals), the refund claim was rejected on the ground that as the appellant has not challenged the adjudication order which has attained finality. Therefore, they are not entitled for refund claim. Aggrieved from the said order, the appellant is before the Tribunal.

Appellant’s contention:-The ld. Counsel for the appellant submits that as per the adjudication order, redemption fine and various penalties were imposed on the appellant. The appellant paid duty, redemption fine and penalties and sought release of the goods as per adjudication order. But while releasing the goods, the appellant was asked to pay an amount on account of rent to Commissioner of Customs (Preventive), NCH, New Delhi which was paid by the appellant under protest. Therefore, question of challenging the adjudication order does not arise as the adjudicating authority has not passed any order against the appellant to pay rent for the period of seizure of goods. Therefore, the appellant is not liable to pay rent and the amount paid on account of rent under protest is to be refunded. He further submits that as the goods were in the custody of Revenue and the appellant has no right to remove the goods, therefore, the rent is payable by Revenue only.

Respondent’s contention:-On the other hand, ld. AR opposed the contention of the ld. Counsel and submits that as the appellant was the owner of the goods throughout the intervening period, therefore, rent is to be paid by the owner of the goods.

Reasoning of judgment:-Heard the parties. Considered the submissions.
The tribunal has gone through the adjudication order. In adjudication order, the appellant is asked to pay redemption fine, penalties and the duty applicable on the goods in question. The appellant has paid the same ,therefore, the goods were required to be released to the appellant on payment of the amounts confirmed as per adjudication order. The adjudicating authority has not passed any order for payment of rent by the appellant for the period of seizure of goods. In these circumstances, the appellant is not liable to pay rent. As the appellant has paid an amount on account of rent in favour of Commissioner of Customs (Preventive), NCH, New Delhi under protest, the said amount is refundable to the appellant as the appellant has no liability to pay rent. In these circumstances, the impugned order is not sustainable in the eyes of law. Accordingly, the same is set aside. Appeal is allowed with consequential relief.

Decision:-Appeal allowed.

Comment:-The gist of the case is that the Department seized some goods of the assessee and stored themin CWC warehouse during seizure period. Since, the adjudicating authority passed order only for payment of redemption fine, penalties and duty applicable to seized goods and did not passed any order for payment of rent, assessee was not required to pay rent for release of goods in question. Therefore, amount paid to CWC under protest on Department’s behalf on account of rent was liable to be refunded to the assessee in accordance with Sections 27 and 63 of Customs Act, 1962.
Prepared by:- Praniti Lalwani

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PJ/Case Law /2016-17/3404

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