Legal principle

If customs sells seized goods without giving the owner the prior notice required by Section 150(1) of the Customs Act, and the owner later succeeds, the owner must be paid the fair market value on the date of release, not the amount customs received at the sale.

Court decision

The writ petitions were disposed of. The court held that if the owners succeed they get the fair market value of the gold on the date of the Commissioner (Appeals) decision, not the 2021 sale price, and the Revenue cannot reargue this before the Commissioner (Appeals). The pending departmental appeal must be decided by 31st December 2026 after a hearing with 7 working days' notice. If the owners win, the value must be paid within 3 weeks; if penalties are imposed, they are deducted first. Release against bank guarantee was refused.

Facts

Seventeen jewellers and gold traders, and Mukti Gold Private Limited, sent gold bars from various cities to Mumbai for job work or to settle sale payments. On 14th June 2019 the Directorate of Revenue Intelligence (DRI) detained about 32.380 kg of gold bars at the premises of Concor Air Ltd., saying it was of foreign origin, and seized it in July 2019. A show cause notice dated 12th December 2019 followed. An Order-in-Original of 13th January 2023 ordered absolute confiscation (the gold is taken by the government) and penalties. The Commissioner (Appeals) sent the case back. On 20th June 2025 the Joint Commissioner decided in the owners' favour and did not confiscate the gold. The Department appealed under Section 129D. The owners then learnt the gold had already been sold on or before 9th December 2021 without telling them, and filed writ petitions in the Bombay High Court.

Key provisions

• Section 150(1), Customs Act, 1962 — Procedure for sale of goods and application of sale proceeds