2017 (12) TMI 1764 - HC - Customs

Provisional release of detained goods - authorities have not disclosed any reason contemplated therein to obstruct provisional release of the goods - CBEC Circular 35/2017-Customs dated 16th August, 2017 - HELD THAT - Now that representation has been made by a partner of the firm who had imported the goods, the respondent no.1 is to consider and dispose of the same within ten days from date. For the purpose of dealing with the representation the said respondent will call for hearing of the person making the representation as well as DRI. In dealing with the representation the said respondent, if is to exercise discretion to deny provisional release of the goods, must take care to give reasons within the scope of the observations of the Madras High Court as mentioned in paragraph 3 of the said circular. Appeal disposed off.

Issues:
- Dismissal of writ petition challenging order obstructing de-stuffing of imported goods
- Provisional release of goods pending clearance under Customs Act, 1962
- Allegation of importer firm being a "shell company"
- Investigation by Directorate of Revenue Intelligence (DRI)
- Representation made by partner of the importing firm
- Directions for consideration of representation and cooperation in investigation

Dismissal of Writ Petition:
The appellant, aggrieved by the dismissal of the writ petition challenging the order obstructing de-stuffing of imported goods at the Port, argued for the provisional release of the goods pending clearance. The ownership of the goods, being in the name of the importing firm, was not disputed. Reference was made to Section 49 of the Customs Act, 1962, regarding the storage of imported goods in a warehouse pending clearance. The appellant contended that the situation warranted invoking clause (a) of the said section for warehousing the goods until the investigation was completed.

Allegation of "Shell Company" Status:
The respondent no.1, the Commissioner of Customs, rejected the previous application for provisional release of the goods on the grounds that the importer firm was labeled a "shell company." The appellant filed a supplementary affidavit disclosing a representation addressed to the Commissioner of Customs, citing a circular that the authorities had not provided any valid reason for obstructing the release of the goods.

Investigation by DRI:
The respondent no.2, Directorate of Revenue Intelligence (DRI), confirmed that the goods were in their custody, and the investigation was ongoing. The DRI argued that the detention of the goods was under investigation, emphasizing that the real owners needed to participate in the process directly, rather than through authorized representatives, for the provisional release under Section 110A of the Customs Act, 1962.

Representation and Cooperation:
A partner of the importing firm made a representation, prompting the respondent no.1 to consider and dispose of it within ten days. The court directed the respondent to call for a hearing involving the person making the representation and the DRI. If the respondent chose to deny provisional release, reasons within the scope of previous court observations were required. The appellant was granted the liberty to request warehousing of the goods under section 49(a). The court also directed the appellant to cooperate in the investigation, which the appellant assured would be done.

Conclusion:
The court disposed of the application and appeal after dealing with the stay application, with no need to keep the appeal pending. The service of notice of appeal was waived by the respondents, and all other appeal formalities were dispensed with, bringing the case to a conclusion.

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