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2010 (5) TMI 592 - HC - CustomsSeizure - release on provisional basis - violation of Section 111(o) of the Act - Held that - in the absence of any definite parameters having been laid down for the exercise of power by the Respondents under Section 110A of the Act the only option that would be available to us would be to fall back on the Customs (Provisional Duty Assessment) Regulations 1963. There is no option but to permit the release of the goods of the Appellants on their furnishing a bond of 20% of the differential duty that is to say the duty claimed by the Respondents minus the duty already paid by the Appellants in the first instance.
Issues:
1. Appellants challenging conditions imposed for release of seized goods under Customs Act. 2. Interpretation of Sections 110A and 111(o) of the Customs Act. 3. Applicability of Customs (Provisional Duty Assessment) Regulations, 1963 to the case. 4. Reasonableness of conditions imposed by Respondents for release of goods. 5. Modification of conditions for release of goods by the High Court. Analysis: 1. The Appellants contested the conditions set for the release of their seized goods under the Customs Act. They argued that the conditions were harsh and filed a writ petition challenging them, which was dismissed by the Single Judge, upholding the conditions imposed by the Respondents. 2. The dispute revolved around Sections 110A and 111(o) of the Customs Act. Section 110A allows for the provisional release of seized goods pending adjudication, while Section 111(o) pertains to the confiscation of goods exempted from duty if conditions are not observed. The Respondents seized the goods due to suspicions of diversion. 3. The Appellants relied on the Customs (Provisional Duty Assessment) Regulations, 1963, arguing that if the goods had been provisionally released at the time of import, they would have paid only 20% of the differential duty. They contended that the power under Section 110A should not be punitive, especially since the goods were initially cleared unconditionally. 4. The Respondents justified the conditions imposed, stating that the goods were diverted against the Open General Licence, leading to a violation of Section 111(o). They argued that the conditions were reasonable and necessary for the release of the goods. 5. The High Court analyzed the situation and found that in the absence of specific guidelines under Section 110A, the Customs (Provisional Duty Assessment) Regulations, 1963 could be applied. The Court modified the conditions, allowing the release of goods upon the Appellants furnishing a bond of 20% of the differential duty, and removing the requirement for a bank guarantee due to the extended delay in adjudication. 6. Ultimately, the High Court directed the Respondents to clear the goods upon the modified conditions, setting aside the Single Judge's decision and allowing the appeal filed by the Appellants.
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