Customs Dispute Over Car, Cash Confiscation Go To CESTAT, Not Revision Authority: Madras High Court

The Madras High Court on 1 October held that a customs dispute concerning confiscation of a vehicle and Indian currency seized in connection with alleged gold smuggling has to be challenged before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), and not through a revision application before the Central Government.

Justice C. Saravanan granted S. Michael Kennadi liberty to approach the CESTAT against the First Appellate Authority's order, while declining to interfere with the Revision Authority's decision rejecting his revision application under Section 129DD of the Customs Act. The Bench observed:

“....the goods that were seized were cash, mobile phone and car. They are neither exported nor imported. The car that was seized was allegedly meant for smuggling gold item had not been loaded on its seizure. Thus, there is no bar on the Tribunal to entertain the Appeal against the First Appellate Authority order under section 129A of the Customs Act, 1962. Therefore, by implication, the jurisdiction of the first respondent under Section 129DD of theCustoms Act, 1962, is barred.”

The case arose from the confiscation of two unfinished gold chains weighing 999 grams and valued at Rs. 59.64 lakh, along with Rs. 5.35 lakh in Indian currency found in Kennadi's Maruti Suzuki Wagon R.

The vehicle was also confiscated under Section 115(2) of the Customs Act, with an option to redeem it on payment of Rs. 1 lakh. A penalty of Rs. 5.96 lakh imposed on Kennadi under Section 112(b) was subsequently reduced to Rs. 1.50 lakh by the Appellate Commissioner.

Kennadi thereafter approached the Revision Authority under Section 129DD, seeking, among other reliefs, setting aside of the vehicle confiscation and redemption fine, release of the Rs. 5.35 lakh currency, and deletion of the penalty.

The Revision Authority rejected the application, holding that the dispute did not relate to goods imported or exported as baggage, which is one of the categories excluded from the CESTAT's jurisdiction under the first proviso to Section 129A.

The Court, however, noted that the articles involved in Kennadi's challenge were cash, mobile phones and a car, and that none of them had been imported or exported as baggage. It further noted that although the car was allegedly intended to be used for smuggling gold, the gold had not been loaded into the vehicle when it was seized.

It therefore held that there was no bar on the CESTAT entertaining an appeal against the First Appellate Authority's order under Section 129A. Consequently, the jurisdiction of the Revision Authority under Section 129DD was, by implication, barred.

The Bench declined to interfere with the Revision Authority's order but granted Kennadi liberty to approach the CESTAT under Section 129A within 30 days from receipt of the High Court's order. It directed the Tribunal to decide the appeal on merits and in accordance with law, without raising any limitation objection.

Accordingly, the High Court dismissed the writ petition, with no order as to costs.

For Petitioner: S. Renganathan

For Respondent: C. Nanda Gopal, Central Government Senior Panel Counsel, for the Revision Authority; and R. Gowrishankar, Senior Standing Counsel, for the Customs authorities.