2019 (8) TMI 1541 - AT - Customs

Provisional release of seized goods - under-valuation of import made by the appellant - enhancement of value of goods - section 110A of the Customs Act, 1962 read with para 2.1, 2.2 and 2.3 of the Circular No.35/2017- Customs dated 16.08.2017 - HELD THAT - The provisional release order has not given any grounds for enhancing the value and insisting for the bank guarantee of such a huge amount. The issue pertained to import of the various items by the appellant during the aforesaid period. It is the contention of the appellant, which has not been refuted by the learned Authorized Representative regarding that the price declared by the appellant for similar imports, the Custom House is assessing the goods on declared price even now belonging to the other importers. Learned Advocate has also submitted that the consignment has been finally assessed by the assessing officer in terms of the provision of section 17 of Customs Act, 1962 and the consignments have been released. The department has not given any data on the alleged enhancement of declared price to the appellant. We have also considered the letter dated 19.07.2019, filed by the learned Departmental Representative. The letter has not cited any evidence of higher contemporaneous import price of the imported goods under question. In absence of contemporary import price of any higher value, the department cannot insist on appellant to give bank guarantee. But to be fair with the appellant as well as with the Revenue, we direct the appellant to furnish bond for the provisional release of the seized goods as per the value indicated by the Commissioner backed by the bank guarantee of ₹ 15,00,000/-. Appeal allowed.

Summary

Issues:
1. Provisional release of seized goods with conditions of submission of duty bond and bank guarantees.
2. Consideration of application under Section 110A of the Customs Act.
3. Excessive demand for bank guarantee without basis.
4. Opportunity of hearing not provided by the Commissioner.
5. Dispute over the value declared by the appellant for the goods.

Detailed Analysis:
1. The appeal was filed against an order for the seizure of goods by the Deputy Commissioner of Customs, which was conveyed by the Commissioner. The Commissioner allowed the release of the seized goods subject to conditions including the submission of a Provisional Duty Bond and Bank Guarantees for the re-determined value of the goods and the estimated differential duty amount. The appellant challenged this order, citing excessive demands for bank guarantees and lack of consideration for the actual import value.

2. The order of the Commissioner was in response to a directive from the High Court to consider and decide the application under Section 110A of the Customs Act promptly. The High Court emphasized affording a reasonable opportunity of hearing to the petitioner and passing a reasoned order. The appellant was aggrieved by this order and appealed to the tribunal.

3. The grounds raised in the appeal included objections to the excessive demand for bank guarantees, questioning the calculation of the differential duty without proper assessment, and arguing that identical goods had been released at the declared value by the appellant. The appellant contended that no transaction value for a higher amount was established, and the demanded bank guarantees were unjustified.

4. The appellant also raised concerns about not being provided with an opportunity for a hearing by the Commissioner despite the High Court's direction. The appellant asserted that the declared value was accurate and should have been accepted without the need for additional bank guarantees.

5. After hearing arguments from both parties, the tribunal found that the provisional release order did not provide sufficient grounds for demanding bank guarantees of a substantial amount. The tribunal noted discrepancies in the assessment process and lack of evidence supporting the need for such high bank guarantees. Ultimately, the tribunal directed the appellant to furnish a bond for provisional release backed by a reduced bank guarantee amount. The appeal was allowed on these terms, emphasizing fairness to both the appellant and the Revenue.