2013 (3) TMI 7 - HC - Customs

Provisional release of the goods - onerous conditions - furnishing 25% bank guarantee and undertaking to the effect that the description of the goods/their quality/age/or other technical specifications/characteristics/ identity, etc., including analyses/test reports as mentioned in the show cause notice dated 4-7-2012 would not be challenged - alternative remedy. Held that - the goods were seized on 1-9-2011 and the request for provisional release was rejected on 2-1-2012. The period of seizure was extended on 29-2-2012 for a further period of six months. A period of one year has expired since the goods were seized and now the Joint Commissioner has directed provisional release of goods subject to above conditions. At this stage to relegate the petitioner to the remedy of appeal again under the statute would be too harsh as he had imported the film for the purpose of trading. The matter is yet to be adjudicated upon by the authorities in pursuance to show cause notice dated 4-7-2012 and, therefore, alternative remedy would not be efficacious remedy in the facts and circumstances of the instant case particularly when the legal position already stands settled that the respondents are not empowered to put such onerous conditions for provisional release of seized goods. Respondents directed to release the goods - No bank guarantee and no undertaking as required by the department - Decided in favor of assessee.

Summary

Issues:
1. Imposition of conditions for the provisional release of goods.
2. Justification of the conditions imposed.
3. Alternative remedy of appeal under Section 128 of the Customs Act, 1962.
4. Legal precedent set by previous judgments.
5. Applicability of settled legal position to the present case.
6. Challenge against the conditions imposed.
7. Relevance of alternative remedy in the present case.

Analysis:

Issue 1: Imposition of conditions for the provisional release of goods
The petitioner filed a writ petition seeking to quash the order directing the release of goods subject to conditions, including furnishing a bank guarantee of 25% of the goods' value and giving an undertaking not to challenge the goods' identity. The petitioner contested the harshness of these conditions.

Issue 2: Justification of the conditions imposed
The respondent justified the conditions by arguing that the petitioner might dispose of the goods during adjudicating proceedings, making the conditions necessary. The respondent claimed that despite the goods being liable for confiscation, they were provisionally released, justifying the imposed conditions.

Issue 3: Alternative remedy of appeal under Section 128 of the Customs Act, 1962
A preliminary objection was raised regarding the petitioner's alternative remedy of appeal under Section 128 of the Customs Act, 1962. The respondent argued that the petitioner should have pursued this remedy instead of filing a writ petition.

Issue 4: Legal precedent set by previous judgments
The court referred to previous judgments, including Amit Enterprises v. Union of India and Era International v. Union of India, which set precedents against imposing conditions like furnishing bank guarantees and giving declarations for the release of goods. These judgments emphasized the importance of not debarred from challenging the value of goods and the arbitrary nature of certain conditions.

Issue 5: Applicability of settled legal position to the present case
The court noted that the law was settled regarding the limitations on imposing onerous conditions for the provisional release of seized goods. The court found no distinguishing feature that would exempt the present case from the established legal principles.

Issue 6: Challenge against the conditions imposed
The petitioner challenged the conditions imposed, arguing that they were too harsh and unnecessary, especially considering the time elapsed since the seizure of goods and the pending adjudication process.

Issue 7: Relevance of alternative remedy in the present case
The court found that in the present circumstances, relegate the petitioner to the remedy of appeal would be too harsh, especially since the legal position was already settled against imposing such conditions. The court allowed the writ petition, modifying the conditions for the provisional release of goods.

In conclusion, the court allowed the writ petition, directing the immediate release of goods without the requirement of furnishing a bank guarantee or giving the undertaking as previously imposed. The court emphasized that this decision did not express an opinion on the merits of the underlying controversy.