Commissioner of Customs can recover Properties of Defaulters: CESTAT

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Mumbai : The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the Commissioner of Customs has the power can recover both the movable and immovable properties of the defaulters.

M/s. Ansar & Co., the appellant have imported and cleared citric acid monohydrate BP-80 vide Bill of Entry No.4019 dated 22/07/1992. The department raised a demand of Rs. 1,02,501/- in the year 1996. The demand was subsequently recovered by freezing the bank accounts of the appellants.

Before the Tribunal, the appellants contended that the levy and collection of interest was introduced for the first time with effect from 26/05/1995 and it was prospective only. They further contended that the department cannot freeze the accounts of the Appellants to recover the duty and interest.

The department, on its defense, relied on the provisions of Section 142 of the Customs Act, 1962.

Upholding the order, the Tribunal held that “Going by the above provisions of Section 142, it is seen that the Commissioner of Customs is empowered to recover sums due to government by distraining any movable or immovable property belonging to or under the control of the defaulter. Therefore deducting the amount due from the ums payable to the defaulter or detaining / selling the goods belonging to the defaulter and lying in the custody of customs or detaining the movable or immovable property are within the ambit of powers conferred under Section 142. Therefore, I find that there if no infirmity in the said orders issued by the Commissioner in freezing the bank accounts of the Appellants. However, freezing of accounts for recovery of interest which is not payable is incorrect.”

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