2011 (2) TMI 212 - HC - Customs

Release of imported goods -The petitioner has been importing the apples from the United States of America for many years and the question of undervaluing the contract price of the goods does not arise, in fact, a sum of about Rupees 70 lakhs, paid by the petitioner as differential duty, is with the respondent pending the adjudication process, while so, it is not open to the respondents to make wild allegations against the petitioner, without having sufficient and appropriate reasons to do so - The respondents are not entitled to delay the release of the imported goods, which are highly perishable in nature - Further, the petitioner would be incurring monetary loss by paying heavy demurrage charges, if the goods are not cleared at the earliest possible - It would also lead to further financial loss, as the petitioner would be liable to pay heavy damages for the breach of the contractual obligations with the foreign supplier, as well as the local distributors - It is seen that the respondents had not been in a position to show that the present writ petition is substantially different from the others, wherein similar orders had been passed, releasing the detained good - Thus, his Court finds it appropriate to direct the respondents to release the goods in question, on the petitioner fulfilling the following conditions - The petitioner shall pay 30% of the differential duty, and for the balance amount, the petitioner shall furnish a personal bond - On compliance of both the conditions, the respondents shall release the goods in question, forthwith.

Summary

Issues:
Import of apples from the United States, provisional assessment and release of goods, alleged undervaluation and evasion of customs duty, delay in releasing perishable goods, legality of provisional clearance under Customs Act.

Analysis:
The petitioner, engaged in fruit trading, imports apples from the United States under valid contracts and has Importer Exporter Code. The goods are perishable, imported through Chennai Seaport, duly assessed by customs. The petitioner requested provisional assessment for two consignments pending assessment, seeking release by depositing 30% differential duty as cash and 70% by bond, as per Customs Act and Regulations.

The petitioner argues that the contract price should be accepted unless proven inappropriate, highlighting past compliance and pending duty payment. Delays in assessment risk financial losses and breach of contractual obligations. Respondents are urged to clear goods promptly or face additional duty imposition for irregularities found later.

Respondents allege undervaluation based on information from the Consulate General, suspecting misdeclaration and evasion of significant customs duty. A show cause notice was issued, and goods were detained pending investigation. Discrepancies in unit prices between invoices and market rates suggest duty evasion worth crores.

The Court notes past orders for provisional release of goods in similar cases and finds the present petition not substantially different. Considering the perishable nature of goods, the Court orders release upon payment of 30% differential duty and furnishing a bond. Respondents are allowed to finalize duty assessment and take legal action if evasion is proven.

In conclusion, the Court directs the release of goods upon fulfilling specified conditions, emphasizing cooperation in duty assessment proceedings. The writ petition is granted without costs, aligning with previous orders for provisional release of detained goods in similar circumstances.