Cus - Mere existence of power of confiscation not sufficient to justify harsh conditions unless case is shown - Order to retain 25% of value of goods (seized) as security in lieu of BG is highly onerous condition which makes relief of provisional release nugatory: High Court
By TIOL News Service
INDORE, AUG 21, 2015: THE petitioner imported goods from China to the tune of Rs.2,51,25,568/- and on the said imported goods the petitioner paid Customs duty to the tune of Rs.69,48,207/- on 19/02/2015.
On 23/02/2015, the goods were seized and the custom duty was accepted by the Department as the same was evaluated by the Government approved valuer.
In a Writ petition, the petitioner prayer for interim relief citingSection 110A of the Customs Act, 1962 regarding provisional release of goods, documents and things seized pending adjudication.
On 23/04/2015, the High Court passed an interim order in favour of the petitioner with the following observations -
"On considering the above and considering the urgency of the matter, we find that the interim relief needs to be allowed in the interest of justice. It is, therefore, directed that subject to the petitioner's filling the bond in the proper form with such the security and conditions as the adjudicating authority may require, the respondents release the goods in accordance with the provisions of law. Needless to say that this Court is not making any observations on the merits of the case. The Competent Authority is free to arrive on its own conclusion in accordance with the provisions of law and grant the interim relief…."
Pursuant thereto, a letter dated 28/04/2015 was filed by the petitioners stating therein that the entire duty on the consignment in question amounting to Rs.69,48,207/- and Rs.66,12,005/- have already been deposited based on the value approved by the Government approved valuer's report and, thus, no Bank Guarantee/Security is required for the release of the said goods. It is also pointed out that consignments are held up from the mid-February onwards and the petitioner is suffering a huge loss due to non-supply of the goods into the market.
By a letter dated 7/05/2015, the Assistant Commissioner(Customs) directed release of seized goods provisionally on the following conditions:-
(a) On execution of Bond equal to assessed value of the goods.
(b) Payment of applicable duty which may be adjusted from Rs.69,48,207/- already paid.
(c) Security as per norms under Customs Law and procedure for likely fine and penalty.
On 5/06/2015(Annexure-P/5), the Assistant Commissioner(Customs), requested M/s All Cargo Logistics Ltd.; (CD-KHEDA), Pithampur to retain 25% of value of goods (seized) as security in lieu of Bank Guarantee and release the remaining goods.
Against these directions, the petitioner is again before the High Court seeking setting aside of the above orders dated 7/05/2015 and 5/06/2015.
It is submitted that the petitioner has already furnished a bond with the department of 100% of the value of goods of the total imported Cargo as security and, therefore, there was no reason to retain 25% of the goods as security. It is also pointed out that most of the goods retained by the department would lose their value rapidly on account of lack of due care and apart from that these goods are not meant to be kept for long and have to be sold in the Market immediately and some of the goods even require requisite temperature which is to be maintained for keeping the goods in proper condition. In such circumstances, 25% of the retained goods which are worth more than 63.00 lakh should be released immediately, otherwise, it would diminish substantially in value in no time.
The Counsel for the department justified the action and submitted that the conditions imposed by the adjudication authority are well within the legal framework and the same is a safeguard for fine/penalty that may be imposed subsequently during the adjudication proceedings. It is prayed that the application may be dismissed.
Countering this submission, the petitioner informed that under threat and pressure they deposited a sum of Rs.66,12,005/- on the previous consignments which were cleared only after the Government approved valuer valued the goods and the Custom Officers had no iota of doubt about the consignment; that in respect of present consignment, whole duty amount has been deposited by the petitioner amounting to Rs.65,46,577/-. Reliance is placed on the decisions of Punjab & Haryana High Court in Kuber Casting (P) Ltd. , BiharilalSinghal 2010-TIOL-288-HC-MUM-CUS and Kundan Rice Mills Ltd. 2008-TIOL-624-HC-P&H-CUS where it has been inter alia held that mere existence of power of confiscation is not sufficient to justify harsh conditions unless case for confiscation is shown; that when duty levied by authorities at the time of initial clearance of goods had been paid, then furnishing of bank guarantee/cash deposit/fix deposit, even to extent of 25% of full value of seized goods was highly onerous condition which made relief of provisional release nugatory.
Without expressing any opinion on merits of the case, the High Court stayed the condition of retaining 25% goods and directed the respondents to release the whole goods upon compliance with other conditions imposed.
The application was allowed.
(See 2015-TIOL-1909-HC-MP-CUS)
