2017 (4) TMI 680 - AT - Customs

Provisional release of goods - perishable goods - valuation - initially the goods in question were released on payment of duty. Later on, investigation was conducted and it was charged by DRI that the goods are undervalued and the same are seized - The adjudicating authority in the impugned order has directed the appellants either to deposit full differential duty or bank guarantee - Held that - the direction of adjudicating authority is not correct - the adjudicating authority has relied upon CBEC Circular No. 38/2016 dated 22.08.2016. The said Circular do not bound this tribunal to liberalise the condition of provisional release in the light of the decision of the Hon ble Gauhati High Court in the case of UOI vs. Amalgamated Plantation (P) Limited 2016 (8) TMI 124 - GAUHATI HIGH COURT - the goods to be released on a condition of furnishing bank guarantee of 30% of the differential duty to the satisfaction of the Commissioner of Customs. In the case of Bill of Entry No. 5369202 dated 24.05.2016, condition for furnishing bank guarantee equal to 20% of the value of goods, is also harsh as the appellant has already paid duty at the time of clearance of goods and the same may be treated as sufficient for release of goods for re-export. It is made clear that the adjudicating authority shall redraw remnant samples of the impugned goods for verification of description, identity, MRP printed, quality and other details for adjudication. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Provisional release of goods under Section 110A of the Customs Act, 1962; Conditions for release of seized goods; Challenge to conditions of release; Differential duty payment for re-exported goods; Principles of natural justice violation; Modification of release conditions; Adjudicating authority's reliance on CBEC Circular; Remnant samples for verification.

Analysis:
1. Provisional Release Conditions: The appellant appealed against the impugned order for provisional release of seized goods under Section 110A of the Customs Act, 1962. The conditions for release included furnishing a bond equal to the assessable value and providing security for the estimated duty. The appellant argued that the conditions were harsh, especially for perishable goods, and challenged the requirement to waive the right to dispute goods' details at adjudication.

2. Differential Duty for Re-export: In the case of goods imported under a specific bill of entry, the appellant contended that paying full differential duty for re-export was incorrect. Citing various legal precedents, the appellant argued that the duty already paid at import should suffice for re-export purposes, and the demanded differential duty amount was inaccurate.

3. Principles of Natural Justice: The appellant claimed that the condition to deposit full differential duty or bank guarantee was against the principles of natural justice. Referring to past tribunal decisions and the Hon'ble Supreme Court's modifications in similar cases, the appellant argued for a more lenient approach in determining the release conditions.

4. Modification of Release Conditions: After careful consideration, the tribunal found that the conditions imposed by the adjudicating authority were not in line with legal precedents and modified the release conditions. The goods were to be released upon furnishing a bank guarantee of 30% of the differential duty to the satisfaction of the Commissioner of Customs, ensuring a more balanced approach to provisional release.

5. Remnant Samples and Verification: The tribunal directed the adjudicating authority to draw remnant samples of the seized goods to verify their description, identity, MRP, quality, and other details for adjudication. This step aimed to prevent disputes regarding the goods' characteristics during the adjudication process, ensuring a fair and accurate assessment.

In conclusion, the tribunal modified the impugned order to align with legal principles, providing a more reasonable approach to the provisional release of seized goods under the Customs Act, 1962. The decision emphasized the importance of upholding natural justice, considering precedents, and ensuring proper verification processes for seized goods.