2016 (8) TMI 877 - HC - Customs

Provisional clearance of seized goods - Valuation of imported goods misdeclaration IEC code sub-woofers amplifiers CD players search seizure under Section 110 of the Customs Act summon of a petitioner petitioner one of the partner statement recorded under section 108 of the Customs Act whereabouts of other partner not known Held that - provisional release of goods permitted. The petitioner is directed to remit the entire duty as assessed by them and the differential duty . The petitioner is directed to execute a bond for the remaining amount to the satisfaction of the respondents. The petitioner shall execute an indemnity bond stating that in the event of missing partner raising any claim over the goods or concerning the use of IEC code issued in favour of M/s.Green Line, the petitioner alone would be fully responsible for the same and no liability can be fastened on the respondent Department and the indemnity bond should be furnished in the form approved by the respondents goods released - The respondent Department directed to proceed with the adjudication and while issuing show cause notice, notices should be issued to the Firm as well as to both partners and all the parties should co-operate with the adjudication proceedings petition disposed off decided in favor of petitioner.

Summary

Issues:
1. Undervaluation and mis-declaration of imported goods by M/s.Green Line.
2. Discrepancy in the representation of M/s.Green Line as a partnership firm.
3. Provisional clearance of goods pending investigation.

Analysis:
1. The case involves M/s.Green Line, a Partnership Firm, importing Sub-woofers, Amplifiers, and CD players. Customs officers suspected undervaluation and mis-declaration, leading to a referral to the Special Intelligence and Investigation Branch (SIIB). The SIIB reported gross undervaluation of goods. The Department questioned the representation of M/s.Green Line as a partnership firm due to discrepancies in the IEC profile. Goods were seized under Section 110 of the Customs Act for further investigation.

2. The Department raised concerns about the IEC code discrepancy and the representation of Mr. Mohamed Kalith as a partner of M/s.Green Line, given the unknown whereabouts of Mr. S. Ariya. Despite no incriminating documents found during searches, the Department doubted the legitimacy of the partnership. The Deputy Director's note mentioned Mr. Kalith's claim of partnership with Mr. Ariya, whose whereabouts were unknown.

3. The Court considered the Department's objections to provisional release based on undervaluation and IEC code discrepancies. However, noting that the goods were not prohibited items, the Court allowed provisional clearance subject to stringent conditions. Citing past cases, the Court emphasized the need for safeguards to protect revenue interests. The Court directed M/s.Green Line to comply with specific conditions, including remitting assessed duty, paying differential duty, and executing bonds. Additionally, an indemnity bond was required to hold Mr. Kalith solely responsible for any claims by Mr. Ariya over the goods or IEC code.

4. The Court's directions included releasing the goods upon compliance with specified conditions, while instructing the Department to proceed with adjudication and involve all relevant parties in the process. The judgment highlighted the need for cooperation in adjudication proceedings. No costs were awarded, and the connected Miscellaneous Petition was closed, concluding the case.