2015 (1) TMI 1028 - HC - Customs

Confiscation of goods - Import of oil - Mis declaration of goods - Held that - assessee had produced statement of bank account and also income tax return where taxable income of only ₹ 1,95,000/- has been declared. It, thus, prima facie, appears that the matter regarding genuineness of the transactions and also the existence of the respondents is required to be examined before imposing condition for the release of the goods. - Matter remanded back - Decided in favour of Revenue.

Summary

Issues:
- Whether the Tribunal was justified in waiving the condition of payment of full differential duty and restricting it to 20%?
- Whether the Tribunal was justified in waiving the condition of furnishing a bank guarantee equivalent to 25% of the full value of the seized goods?
- Whether the Tribunal was justified in provisionally releasing the goods without a bank guarantee and without disputing the identity of the goods?

Analysis:

Issue 1: Waiver of Differential Duty
The Tribunal had ordered the release of goods subject to payment of 20% of the differential duty, which the appellant argued was erroneous. The appellant contended that the respondent was a non-existent company conducting business on behalf of another entity. The Tribunal's decision was challenged based on the investigation findings that revealed misdeclaration of imported goods to evade customs duty. The High Court set aside the Tribunal's order and remitted the matter for fresh adjudication, emphasizing the need to examine the genuineness of transactions and the existence of the respondents before imposing conditions for goods release.

Issue 2: Waiver of Bank Guarantee
The Tribunal had waived the condition of furnishing a bank guarantee equal to the full value of the seized goods, which was contested by the appellant. The appellant argued that such a waiver was unjustified given the circumstances of the case, where imports were made using a front company or a non-existent entity. The High Court, while allowing the appeals, directed the Tribunal to reevaluate the issue after hearing both parties, stressing the importance of examining the genuineness of transactions and the existence of the respondents before imposing any release conditions.

Issue 3: Provisional Release of Goods
The Tribunal provisionally released the goods without a bank guarantee and without disputing the identity of the goods, a decision challenged by the appellant. The investigation revealed that the imported goods were misdeclared to undervalue them and evade customs duty. The High Court overturned the Tribunal's decision, remitting the matter for fresh adjudication to ensure a thorough examination of the genuineness of transactions and the existence of the respondents. The Court directed the Tribunal to expedite the adjudication process within two months due to the potential impact on the goods involved.

In conclusion, the High Court's judgment emphasized the importance of scrutinizing the genuineness of transactions and the existence of entities involved in import activities before releasing goods and imposing conditions. The Tribunal's decisions to waive differential duty, bank guarantee requirements, and provisionally release goods were set aside for fresh adjudication to safeguard the revenue's interests and ensure compliance with customs regulations.