2015 (1) TMI 1078 - HC - Customs

Request to release the consignment of Snap Fasteners, Sliders, Elastic Tapes and Sewing Needles and other goods and permit the petitioner to re-ship the consignment of Snap Fasteners, Sliders, Elastic Tapes and Sewing Needles and other goods lying in the custody and control of the respondents in the Chennai Port - Held that - It is the case of the petitioner that the alleged goods have been wrongly shipped along with the declared goods. According to the petitioner, since the importer has disowned the goods, they may be permitted to re-ship the goods. It is also the case of the petitioner that the show cause notice has been issued only to the importer and not to them. The petitioner claims to be the owner of the goods. - The contention of the petitioner that the staff of the warehouse have wrongly dispatched the goods instead of the declared goods has to be proved only by way of adjudication. Therefore, the relief sought for by the petitioner to release the goods or reshipment cannot be granted at this stage. However, since the importer has disowned the goods, there is no impediment for the authority to permit the petitioner to participate in the adjudication process, as they claims to be the owner of the goods. Further, the petitioner company is a foreign company and the allegation against them is that the goods have been smuggled into India and as the importer has stated that he has never given any such order at all, to safeguard the interest of the revenue, there should be a condition to permit them to seek for either release or return of the goods. Therefore, the petitioner is permitted to participate in the adjudication proceedings. However, since huge amount has been involved in respect of anti-dumping duty to the tune of two crores, the petitioner, in order to show their bona fide, shall produce bank guarantee for a sum of ₹ 50,00,000 before the respondents and on such production of bank guarantee, the respondents will issue notice to the petitioner for adjudication. The petitioner is also directed to appear before the authority on the date to be fixed by them for adjudication process. Since the goods have been lying in the Port, the respondents are directed to complete the adjudication process within a period of four months from the date of receipt of a copy of this order, after affording reasonable opportunity to the petitioner as well as the importer. - Petition disposed of.

Summary

Issues:
Petitioner seeks release of seized goods for re-shipment due to alleged wrong dispatch by warehouse staff. Respondents claim goods misdeclared to evade duty, pending adjudication. Petitioner asserts ownership, requests participation in adjudication. Court to decide on release or re-shipment, permits petitioner's participation in adjudication with bank guarantee.

Analysis:
The petitioner, a trade licensee from Hong Kong, filed a writ petition seeking a mandamus to release a consignment of goods seized at Chennai Port, including Snap Fasteners, Sliders, Elastic Tapes, and Sewing Needles, for re-shipment. The petitioner alleged that the goods were wrongly dispatched by warehouse staff, leading to the seizure. The respondents, however, contended that the goods were misdeclared to evade Anti-dumping duty, with Chinese Sewing Needles hidden behind declared items. A show cause notice was issued to the importer, pending adjudication. The respondents objected to the release or re-shipment until the adjudication process was completed. They allowed the petitioner to participate in the adjudication, claiming ownership of the goods, with a condition to provide a bank guarantee of Rupees Fifty Lakhs to show bona fide.

The Court acknowledged the petitioner's claim of the goods being wrongly shipped and the importer disowning them. While denying immediate release or re-shipment, the Court permitted the petitioner to participate in the adjudication process to establish ownership. Given the substantial Anti-dumping duty involved, a bank guarantee was mandated to ensure the petitioner's commitment. The Court directed the completion of adjudication within four months, allowing both parties a reasonable opportunity to present their case. The respondents were instructed to facilitate the process promptly, considering the goods' current status at the Port.

In conclusion, the writ petition was disposed of without costs, with the Court emphasizing the need for a thorough adjudication process to resolve the dispute regarding the seized goods. The Court's decision balanced the petitioner's request for re-shipment with the respondents' concerns over potential duty evasion, ensuring a fair opportunity for the petitioner to prove ownership while safeguarding revenue interests through the bank guarantee requirement.