2013 (9) TMI 1000 - AT - Customs

Seizure of goods - Undervaluation of goods - Held that - In respect of the items for which MRP details are not ascertained, the Revenue is not having any MRP but have estimated the same as five times the declared MRP by the appellants and for the differential duty, bond and bank guarantee have been demanded on the basis of the said estimated MRPs. We also observe from the details of the seizure memo that majority of items imported are not covered by the said seven items. In view of this position, we are of the view that asking 100% in cash/bank guarantee for the differential duty based upon purely an estimation basis in the facts of the present case is not correct. We also find from the order of the Commissioner that the department has adopted two different criteria in respect of the goods which have been assessed but not cleared so far and in respect of the goods which are yet to be assessed. - conditions in both the situations should be the same, goods being same/similar. Further, we are of the view that the goods where the MRPs are available (though disputed by the applicants) are on different footing than the goods where MRPs are not available and the department is only making an estimate. Further, asking bank guarantee for RF/penalty in the facts and circumstances of the case is harsh. - Decided partly in favour of assessee.

Summary

Issues:
1. Maintainability of appeal against order passed under Section 110A of the Customs Act.
2. Conditions imposed by the Commissioner for provisional release of goods under Section 110A.

Issue 1: Maintainability of appeal against order passed under Section 110A of the Customs Act:
The judgment addresses the issue of whether an appeal against an order passed under Section 110A of the Customs Act is maintainable before the Tribunal. There was a difference of opinion among the Tribunal Members regarding this matter. The judgment cites cases where the Revenue argued that such appeals are maintainable before the Tribunal under Section 129A of the Customs Act. High Court decisions, like in the case of Shiv Mahal Textiles Pvt. Ltd. and Victor Hotels and Motels Ltd., supported the view that appeals against Section 110A orders are maintainable before the Tribunal. Consequently, the Tribunal decided to consider the appeals in question.

Issue 2: Conditions imposed by the Commissioner for provisional release of goods under Section 110A:
The main contention raised by the appellants was that the conditions set by the Commissioner for the provisional release of goods were excessively harsh, going beyond what is prescribed under the Customs (Provisional Duty Assessment) Regulations, 1963. The appellants argued that the Commissioner demanded 100% of the provisional duty, contrary to the Regulations allowing up to 20%. Citing legal precedents, the appellants emphasized the need to follow the Regulations and challenged the Commissioner's demands. On the other hand, the department argued that the situation under Section 110A was distinct from the Regulations, especially considering the seized goods and discrepancies in declared vs. actual MRPs. The Tribunal reviewed the seizure details and found the demands excessive, modifying the order to align with a more reasonable approach. The revised conditions included executing a bond, paying differential duty for specific items, and providing a bank guarantee for redemption fine and penalty purposes.

In conclusion, the judgment clarifies the maintainability of appeals against Section 110A orders and provides a detailed analysis of the conditions imposed for the provisional release of goods, ensuring alignment with legal regulations and fair treatment of the appellants.