2012 (8) TMI 727 - HC - Customs

Demand for Provisional clearance of goods - Held that - For provisionally assessing duty the petitioner will deposit 20% of the differential duty in cash while furnishing bank guarantee for the remaining 80% and on fulfilling these conditions and after completing all the other formalities,if any, the goods will be released to him as early as possible and without delay.

Summary

Issues:
Provisional clearance of goods, conditions provided by Deputy Commissioner of Customs, reliance on previous judgments, necessity of bank guarantee, modification of conditions.

Analysis:
The Writ Petition concerns the petitioner's grievance regarding the conditions outlined in Exhibit P5 by the Deputy Commissioner of Customs regarding provisional clearance of goods to prevent delays and demurrage. The Officer referred to a Division Bench judgment in Writ Appeal No.2048/10, allowing provisional clearance on bond and bank guarantee for half the duty with the remaining half to be paid in cash. The petitioner argued against this condition citing commercial practices and presented orders from Mathilakom ICD (Exhibits P10 to P12) to support their stance.

In response, the Department's Standing Counsel referenced a Division Bench decision in Mohammed Fariz and Co. v. Commissioner, emphasizing the need for proper security when executing a bond for provisional duty assessment. The judgment highlighted the importance of a valid surety bond supported by security, such as a bank guarantee, to ensure duty payment without the Department chasing after parties. The Court considered these directions in addressing the issue at hand.

Ultimately, the Court modified the conditions laid out in Exhibit P5, requiring the petitioner to deposit 20% of the differential duty in cash and furnish a bank guarantee for the remaining 80%. Upon fulfilling these conditions and completing all formalities, the goods would be released promptly, aiming to resolve the matter expeditiously and without undue delay.