2015 (4) TMI 686 - HC - Customs

Detention of goods - Perishable goods - misdeclaration of origin of goods - Held that - Imports in question were effected after complying with the procedural requirements of the SAFTA notification, which enabled the petitioner to claim clearance of the goods at concessional rate of duty. The relevant documents, such as the certificate of origin issued by the Karachi Chamber of Commerce and Industry/Trade Development Authority of Pakistan, and the invoice that accompanied the consignment, clearly indicated that the goods were of Pakistani origin. As against this, the only material relied upon by the Customs authorities, to doubt the correctness of the aforesaid certificates and invoices, is the detection of certain gunny bags in the containers that held the imported goods, which gave rise to a suspicion that the goods could have been sourced from Indonesia. - goods can be permitted a provisional clearance on the petitioner executing a bond for the assessable value, paying duty on the consignment in terms of the SAFTA notification, and paying 35% of the differential duty (on tariff rate) in respect of the consignment that has been imported. The petitioner shall also furnish a bond, without any surety or security, in favour of the respondents towards the remaining portion of the differential duty. I make it clear that, if the petitioner complies with the aforesaid conditions, the respondents shall release the consignment of goods imported by the petitioner under Ext.P6 series of bills of entry, forthwith and without any further delay. - Decided conditionally in favour of asssessee.

Summary

Issues:
1. Clearance of imported goods under SAFTA agreement at concessional rate of duty.
2. Provisional release of goods with conditions including cash deposit/bank guarantee.
3. Dispute over the requirement of a bank guarantee for remaining differential duty.
4. Validity of certificates of origin and invoices in determining the origin of imported goods.

Analysis:

Issue 1: The petitioner imported a consignment of arecanut from Pakistan seeking clearance at a concessional rate of duty under the SAFTA agreement. Customs authorities suspected the goods' origin due to gunny bags found in the containers.

Issue 2: The respondents allowed provisional release of goods subject to conditions, including a cash deposit/bank guarantee from a Nationalized Bank for the remaining portion of the differential duty. Petitioner argued against the exorbitant bank guarantee amount hindering expeditious clearance.

Issue 3: The petitioner contested condition No.4, emphasizing the perishable nature of goods and the need for swift clearance. The court considered the procedural compliance with SAFTA notification and the origin certificates in the decision.

Issue 4: The court examined the certificates of origin issued by Pakistani authorities and invoices accompanying the consignment, giving weightage to the SAFTA agreement between South Asian countries. The detection of gunny bags raised suspicion but was not sufficient to override the certificates.

The judgment favored the petitioner, allowing provisional clearance upon executing a bond, paying duty as per SAFTA notification, and depositing 35% of the differential duty. A bond without surety was required for the remaining differential duty. The court clarified that its observations on certificates were for provisional release only and would not impact future adjudication. The writ petition was disposed with the specified directions for immediate release of the imported goods.