Case Note & Summary
The Bombay High Court, in an appeal under Section 130 of the Customs Act, 1962, considered two substantial questions of law: whether customs authorities can recover customs duty dehors Sections 28 and 125 of the Act, and whether duty can be recovered on confiscated goods when the option of redemption is not exercised. The appellant, Bombay Hospital Trust, a public charitable trust, had imported medical equipment valued at Rs.8,24,78,366/- between 1988 and 1994, availing exemption under Notification No.64/88 dated 1st March, 1988, without payment of customs duty of Rs.11,52,06,608/-. The court admitted the appeal on 13th March, 2006 on these questions. The court held that customs authorities cannot recover duty outside the specific provisions of Sections 28 and 125, and that no duty is recoverable on confiscated goods if the redemption option is not exercised. The appeal was allowed, setting aside the demand for duty.
Headnote
A) Customs Law - Recovery of Duty - Sections 28 and 125 of Customs Act, 1962 - Power to Recover Duty - The issue was whether customs authorities can recover customs duty without following the procedure under Sections 28 and 125 of the Customs Act, 1962. The court held that customs authorities cannot recover duty dehors the specific provisions of the Act, and duty on confiscated goods is not recoverable if the option to redeem the goods is not exercised. (Paras 1-2) B) Customs Law - Confiscation and Redemption - Section 125 of Customs Act, 1962 - Duty on Confiscated Goods - The question was whether duty can be recovered on confiscated goods when the redemption option is not exercised. The court held that no duty is recoverable on confiscated goods if the owner does not exercise the option to redeem them under Section 125. (Paras 1-2)
Issue of Consideration
Whether customs authorities have power to recover customs duties dehors the provisions of Sections 28 and 125 of the Customs Act, 1962; and whether customs authorities have power to recover duty of customs on confiscated goods even when the option of redemption is not exercised.
Final Decision
Appeal allowed. The court held that customs authorities cannot recover duty dehors Sections 28 and 125 of the Customs Act, 1962, and no duty is recoverable on confiscated goods if the redemption option is not exercised.
Law Points
- Customs duty recovery must be under Sections 28 and 125 of Customs Act
- 1962
- Customs authorities cannot recover duty dehors these provisions
- Duty on confiscated goods not recoverable if redemption option not exercised
