2010 (5) TMI 409 - HC - Customs

Provisional release subject to payment of differential duty - documents and things seized pending adjudication - which is not a condition for release under Section 110A Held that - impose such conditions for furnishing of bank guarantee as the Commissioner of Customs deems fit and proper, to secure the claim of the Revenue and may further direct renewal thereof within a stipulated time prior to its date of expiry, upon notice to the Commissioner of Customs, failing which the bank guarantee shall be invoked without further reference to the petitioners - The writ application is disposed of.

Summary

Issues:
Challenge to order of provisional release subject to payment of differential duty and execution of bank guarantee.

Analysis:
The petitioner challenged an order allowing provisional release of seized goods subject to payment of differential duty and execution of a bank guarantee. The petitioner imported old machines as scrap, which were seized by officials and a notice under Section 110 of the Customs Act, 1962 was issued. The petitioners applied for provisional release under Section 110A, which allows release pending adjudication on taking a bond. The main objective of Section 110A is to prevent unnecessary detention of goods. The court noted that Section 110A does not require payment of differential duty for provisional release.

The court referred to a Supreme Court case deprecating the practice of granting interim orders that practically provided the main relief sought without considering other relevant factors. The court emphasized that the levy or impost does not become invalid just because a writ petition is filed. The judgment was considered a precedent to be interpreted based on the circumstances. In this case, the court found that the statute itself provides for provisional release without the requirement of paying the differential duty.

The court directed the Assistant Commissioner of Customs to reconsider the application for release of goods without the condition of differential duty payment. It was suggested that the petitioner should provide an unconditional bank guarantee to secure any potential claims by the authorities. The court emphasized the importance of renewal of the bank guarantee in advance and clarified that it should be unconditional. The impugned order was set aside, and the Commissioner of Customs was given the authority to impose suitable conditions for the bank guarantee.

In conclusion, the writ application was disposed of, and the court directed the Assistant Commissioner to make a fresh decision within a specified timeframe. The parties were instructed to receive a certified copy of the order promptly upon application.