Page 113 - ELT_1st July 2020_Vol 373_Part 1

2020 ] UNIVERSAL DRUG CENTRE v. UNION OF INDIA 23

order. The Tribunal merely remanded the proceedings for fresh consideration
only qua the petitioner. The petitioner's claim for release of the goods is not main-
tainable since in the meantime, the goods were destroyed due to lapsed validity
of the drug.
7. The petitioner has not been able to build a case of mala fide or vindic-
tive action on part of the adjudicating authority in originally initiating proceed-
ings and eventually ordering confiscation of goods and imposing personal penal-
ties on the petitioner and other co-noticees. In fact, other co-noticees did not chal-
lenge the order. Qua them such order be achieved finality. Only petitioner car-
ried the order-in-appeal. Commissioner of Appeal had confirmed the order. The
Tribunal remanded the proceedings for fresh consideration by the adjudicating
authority. In the second round, the adjudicating authority found that personal
penalty should not be imposed on the petitioner. In the process, he made no
comments about the confiscation of the goods. It was, therefore, that the Com-
missioner allowed the petitioner to approach the competent authority for release
of goods since there was no order for confiscation and the earlier order of confis-
cation was set aside by the Tribunal. When the petitioner approached the author-
ity, it was revealed that the goods were already destroyed because by then the
validity period of the drug had expired.
8. Under such circumstances, the Customs authorities cannot be sad-
dled with refunding of the value of the goods to the petitioner. The Customs au-
thorities having acted, bona fide, the department cannot be asked to compensate
the petitioner for incidental loss suffered by him on account of the pendency of
the proceedings. It is neither the case of the petitioner that wholly mala fide in
order to harass the petitioner the proceedings were initiated or that the same pro-
tracted. When the Customs authorities acted, bona fide, even though as the hind-
sight would suggest, incorrectly, the incidental loss suffered by an assessee can-
not be ordered to be compensated by the Customs department.
9. In fact, a part of the blame for destruction of the drugs must be at-
tached to the petitioner itself. Under the Customs Act, provisions are there where
under certain circumstances even after confiscation of the goods in respect of
which any of the legal breaches are detected, the authority can provide for re-
demption fine and on payment of which in lieu of absolute confiscation, the
goods can be returned to its owner. The petitioner could have applied for such
redemption fine. Could also have approached the High Court for release of the
goods on certain conditions in view of impeding expiry of the drugs. The peti-
tioner could also have urged the Customs authorities to auction the goods well in
time so that the market price could have been fetched and if the petitioner ulti-
mately succeeded such sale price could have been paid over to the petitioner.
10. In case of Kailash Ribbon Factory Ltd. v. Commr. of Customs and Cen-
tral Excise and Another reported in (2002) 97 DLT 826 = 2002 (143) E.L.T. 60 (Del.)
Division Bench of Delhi High Court was concerned with the case where the Cus-
toms department during the pendency of the appeal of the petitioner without
permission of the Court auctioned the confiscated goods in a clandestine manner.
It was in this background that the High Court compensated the petitioner for
serious lapse on part of the respondents. The Court eventually directed refund of
the price fetched through such auction with interest. The ratio of the said deci-
sion would not apply in the present case.

EXCISE LAW TIMES  1st July 2020  113