2013 (4) TMI 283 - HC - Customs

Seizure U/s 110 - Valuation - Provisional release of goods U/s 110-A of the Customs Act, 1962 - Held that - Section 110-A of the Customs Act, 1962 provides for provisional release of goods, documents and things seized pending adjudication. Any goods, documents or things seized under Section 110 of the Act, may, pending the order of the adjudicating officer, be released to the owner on taking a bond from him in the proper form with such security and conditions as the Commissioner of Customs may require - The only reason for non-releasing of the goods is that the petitioner has under-valued the goods in question. The respondents, on investigation, found that the differential duty has to be paid even for the provisional release of the goods. The investigation has to be completed and thereafter, the adjudication has to be done for the assessment of the value. In the light of the legal position and as the goods in question are not prohibitory items under the provisions of the Act and considering the facts and circumstances of the case, provisional release of the goods in question, is ordered with the following conditions - i) The petitioner shall deposit with the customs authorities the duty payable on the value declared by them - ii) The petitioner shall deposit with the customs authorities 50% of the differential duty - iii) The investigation is yet to be completed and the adjudication has also to be done. Therefore, it is needless to state that this order shall not stand in the way of the respondents to proceed with the investigation and also the adjudication process. In such an event, the petitioner shall co-operate with the respondents for conclusion of the investigation as well as the adjudication proceedings. The Writ Petition is disposed of - No costs - Consequently, the connected miscellaneous petition is closed.

Summary

Issues:
Request for release of imported goods under Customs Act; Provisional release pending adjudication; Undervaluation of goods; Financial hardship due to continued seizure; Violation of fundamental rights; Interpretation of relevant regulations and legal provisions.

Analysis:

Request for Release of Imported Goods:
The petitioner filed a writ petition seeking direction to release 852 Cartons of Picture Frame and other items imported from Hong Kong. The goods were assessed by the Proper Officer under the Customs Act, and duty was paid. However, the goods were subsequently detained by DRI Officers, causing financial hardship to the petitioner.

Provisional Release Pending Adjudication:
The petitioner requested provisional release of the goods under Section 110A of the Customs Act, which allows for provisional release pending adjudication. Despite multiple representations and requests, no response was received from the DRI Officers, leading to the petitioner's claim for violation of fundamental rights under Articles 19 and 21 of the Indian Constitution.

Undervaluation of Goods and Investigation:
The respondents alleged that the goods were undervalued, leading to their seizure under the Act. The investigation was ongoing, and the respondents argued against the provisional release of goods until the investigation was completed and adjudication proceedings were conducted to determine the actual value of the goods.

Financial Hardship Due to Continued Seizure:
The petitioner highlighted the financial burden caused by the continued detention of the goods, including demurrage charges and damage to perishable items. The petitioner contended that the actions of the respondents were void-ab-initio, mala-fide, and unjustified, as there was no fault on their part.

Interpretation of Regulations and Legal Provisions:
The judgment referred to Customs (Provisional Duty Assessment) Regulations, 2011, and Section 110A of the Customs Act, which provide for provisional release of seized goods pending adjudication. The court considered previous legal precedents and directed the provisional release of the goods with specific conditions, including depositing the duty payable and a differential duty amount.

Conclusion:
The court ordered the provisional release of the goods with conditions to address the undervaluation issue and safeguard the interests of the Department. The judgment emphasized cooperation from the petitioner in the ongoing investigation and adjudication processes. The writ petition was disposed of with observations on the legal position and directions for the release of the goods.

This detailed analysis covers the key issues raised in the judgment, including the request for release of imported goods, provisional release pending adjudication, undervaluation of goods, financial hardship, violation of fundamental rights, and the interpretation of relevant regulations and legal provisions.