M/s Navayuga Engineering Co. Ltd. vs Union of India & Anr.

Court

Supreme Court of India

Date

23 July 2024

Case No.

Civil Appeal No. 1024 of 2014

Result

Disposed

Bench

Pamidighantam Sri Narasimha, Aravind Kumar

Citation

[2024] 7 S.C.R. 1183 : 2024 INSC 547

Acts & Sections

Customs Act, 1962

Issue for consideration

(i) Whether there is a liability to pay customs duty when the confiscated goods are redeemed after payment of fine under Section 125 of the Customs Act, 1962; (ii) Whether, the liability to pay such duty will include the liability to pay interest on delayed payment under Section 28AB of the Act; (iii) What is the true and correct ratio of the decision in Jagdish Cancer case.

Headnote

Customs Act, 1962 – s.125 – Whether there is a liability to pay customs duty when the confiscated goods are redeemed after payment of fine under Section 125 of the Customs Act, 1962: Held: The owner of goods has a liability to pay customs duty, even after confiscated goods are redeemed after payment of fine and other charges under Section 125 of the Act – When confiscation proceedings are initiated under Section 124 of the Act, the obligation to pay duty and other charges under Section 125(2) will arise only when the owner of goods exercises the option to pay fine for redemption of goods and the Department accepting it. [Paras 8.2, 8.4]

Customs Act, 1962 – Whether, the liability to pay such duty will include the liability to pay interest on delayed payment under Section 28AB of the Act:

Held: The text of Section 125(2) clearly provides that, where any fine in lieu of confiscation of goods is imposed under sub-Section (1), the owner of such goods shall be ‘liable to any duty and charges payable with respect to such goods’– The sub-section provides that the liability to any duty and charges, that are payable, shall be paid in addition to the fine – Section 28 would come into operation for assessing and determining the duty and other charges payable with respect to goods redeemed under Section 125(2) – Once Section

28 applies for determination of duty obligation arising under Section 125(2), the interest on delayed payment of duty arises under Section 28AB – The said provision obligates payment of interest in addition to the duty – Thus, the question is answered by holding that the interest liability under Section 28 AB is also attracted. [Para 10.1] Customs Act, 1962 – What is the true and correct ratio of the decision in Jagdish Cancer case:

Held: Jagdish Cancer case is not an authority for the proposition that when the liability to pay customs duty has occasioned under Section 125, the calculation, determination or the assessment of such duty cannot be made under Section 28. [Para 9.6]

Judgment Table of Contents* 1. Introduction: ........................................................................ 3. Sections 11 and 12 of the Act: ............................................. 11. Facts: .................................................................................. Section 28 of the Act: .......................................................... Confiscation of goods under Chapter XIV of the Act:.......... . Section 125 of the Act:......................................................... Issues:....................................................................

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