2016 (9) TMI 174 - AT - Customs

Demand of differential duty - Section 110A of the Customs Act 1962 provisional release of goods execution of bond security in the form of bank guarantee equal to 25% of value of seized goods seeking of provisional release on the basis of bond and bank guarantee only Held that - provisional release of the goods is allowed on execution of Bond for the value of the goods and on furnishing a Bank Guarantee only in case where matter is pending for adjudication. Since confiscation of the goods has not yet concluded therefore the Bond for full value of the goods and Bank Guarantee of 25% is required. After the assessment of the Bill of Entry the release cannot be allowed without payment of duty as assessed in the Bill of Entry in addition to execution of Bond for the full value of the goods and furnishing of Bank Guarantee for 25% - conditions imposed for provisional release upheld appeal disposed off decided against appellant.

Summary

Issues:
Challenge to order of Commissioner of Customs for provisional release of seized goods under Section 110 of the Customs Act, 1962.

Analysis:
The appellant contested the order of the Commissioner of Customs demanding differential duty, execution of Bond for full value of goods, and furnishing a Bank Guarantee for provisional release of seized goods. The appellant argued that differential duty should not be demanded for provisional release, citing various judgments supporting their stance. On the other hand, the Revenue contended that the duty assessed by the authority must be paid for release. The Revenue relied on a judgment of the Mumbai High Court to support their position.

Upon careful consideration, the Tribunal observed that Section 110A of the Customs Act, 1962 allows provisional release of goods pending adjudication on execution of Bond and Bank Guarantee only when the matter is pending adjudication. In this case, since the differential duty was part of the total assessed duty under the Bill of Entry, Section 110A did not apply. Instead, Section 125 applied, requiring payment of assessed duty for release. The Tribunal emphasized that release cannot be permitted without payment of assessed duty, Bond for full value of goods, and Bank Guarantee as directed by the Commissioner.

Regarding the judgments cited by the appellant, the Tribunal noted that those cases involved situations where the duty demand was not finalized, making Section 110A applicable for provisional release. Since the present case differed in this aspect, the Tribunal concluded that the judgments cited were not directly applicable. Consequently, the Tribunal upheld the conditions imposed by the Commissioner for the provisional release of goods and dismissed the appeals.

In conclusion, the Tribunal found no merit in the appellant's arguments and upheld the Commissioner's conditions for the provisional release of the seized goods. The appeals were consequently dismissed.