2016 (11) TMI 616 - HC - Customs

Release of seized consignments - provisional order - restoration of IEC number - Held that - on deposit of ₹ 25,00,000/ in cash within fifteen days as suggested and on furnishing a bank guarantee in the sum of ₹ 30,00,000/ , both within two weeks from today, the seized goods shall be released. The seizure as also the release is without prejudice to the rights and contentions of all the parties. Merely because a direction is issued to release the Petitioner s goods, does not mean that the Revenue is restrained from issuing a show cause notice and passing an order of adjudication in furtherance thereof. The adjudication proceedings can be initiated and concluded on their own merits and in accordance with law, uninfluenced by any provisional release order. We expect that the Revenue would do that expeditiously for it has claimed to have unearthed a huge fraud perpetrated on public. Let the Petitioner comply with these statements and which we have accepted without prejudice to the rights and contentions of the parties and thereafter, the Additional Commissioner of Customs, Drawback Department, Nhava Sheva, Mumbai, shall take appropriate steps and unlock the IEC number as prayed in the Petitioner s application dated 4th March, 2016 - petition disposed off.

Issues:
1. Release of seized consignments.
2. Validity of provisional order.
3. Imposition of conditions for payment of duties.
4. Allegations of fraud and evasion of duty.
5. Disputed questions of fact.
6. Conditions for release of seized goods.
7. Compliance requirements for the Petitioner.
8. Unlocking of IEC number.

Analysis:
1. The main issue in this case is the release of certain consignments that have been seized. The court noted that a provisional order was passed on 15th March, 2016, and the essential relief sought by the Petitioner is the release of the seized consignments. Both parties presented their arguments, with the Petitioner claiming that the provisional order adjudicates the controversy finally, while the Respondents argued that the conditions imposed for payment of duties are justified due to alleged fraud and evasion of duty.

2. The validity of the provisional order was challenged by the Petitioner, who argued that the conditions imposed for payment of duties, as quantified by the Directorate of Revenue Intelligence, are illegal, unreasonable, and excessive. On the other hand, the Respondents justified the provisional assessment based on the seizure effected and the version of the Investigating Agency, stating that it is reasonable and not arbitrary. The court found that the provisional assessment can be made based on the recommendations of the Investigating Agency and is not arbitrary as alleged by the Petitioner.

3. The Petitioner raised concerns about the imposition of conditions for payment of duties, alleging that even when show cause notices are not issued, conditions are imposed that enable illegal recoveries. The court noted the submissions made by both parties regarding the alleged fraud involving certain individuals dealing in carpets and evasion of duty. The Respondents argued that the fraud on the public continued through certain operations from Dubai, leading to evasion of duty, which was supported by recorded statements and discrepancies in the documents produced.

4. The court acknowledged that the petition raises disputed questions of fact and ultimately directed the release of the seized goods on certain conditions. The Petitioner was required to deposit a specified amount in cash and furnish a bank guarantee within a stipulated timeframe for the release of the goods. It was clarified that the release of goods does not prevent the Revenue from initiating adjudication proceedings independently and expeditiously to address the alleged fraud uncovered during the investigation.

5. In conclusion, the court's order was passed based on the suggestions made by the Petitioner's Counsel, with specific compliance requirements outlined for the Petitioner. The Additional Commissioner of Customs was directed to take appropriate steps following the Petitioner's compliance with the stated conditions. The order emphasized that the release of goods and unlocking of the IEC number were without prejudice to the rights and contentions of all parties involved in the case.

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