2017 (12) TMI 628 - HC - Customs

Provisional Release of goods - Section 110 (A) of the Customs Act, 1962 - Held that - The factual matrix of the present case appears to be not in dispute, as the allegation was not pertaining to mis disclaration of the nature of the goods, but with regard to retail selling price of the products. Thus, if ultimately, on adjudication, it is found that that the retail selling price declared by the petitioner, in the Bill of Entry is lower than the actual retail price, then, it would result in changes in the valuation of the goods, demanding higher rate of tax, penalty and other charges. As far as the adjudication levies in respect of live consignment are concerned, it is yet to be quantified. Though the Board s Circular provides for such adjudication levies, there can be no question of quantifying the same at this stage, without opportunity to the petitioner. Further, the amount of ₹ 30,00,000/- for the duty liability in respect of the past imports cannot be insisted upon at this juncture, as no proceedings have been initiated against the petitioner, in respect of those consignments, which were already cleared. Petition disposed off.

Summary

Issues:
Challenge to order under Section 110(A) of the Customs Act for provisional release of goods.

Analysis:
1. The petitioner imported goods from China, detained due to suspicion of mis-declaration of retail selling price. The petitioner paid substantial amounts as directed, totaling &8377; 17.71 lakh.

2. The impugned order demanded a personal bond of &8377; 50,39,326 and a bank guarantee of &8377; 46,69,783 without clear quantification. The petitioner sought details and release without further payment.

3. The court noted that adjudication is pending, and demanding quantification prematurely would prejudge the matter. No notice was issued for duty liability on earlier imports, making current conditions unsustainable.

4. The respondent argued based on legal precedents from Delhi High Court and Madras High Court, emphasizing compliance with import conditions and penalty provisions for misdeclaration under the Act.

5. The court differentiated the case from Delhi High Court judgments, stating the issue was retail price misdeclaration, not prohibition of imports. The correctness of conditions imposed by the respondent was under scrutiny.

6. Referring to a Bombay High Court case, the court emphasized the need for clear principles and reasonableness in demanding duties for past imports without due process.

7. The court set aside the impugned communication, directing the petitioner to execute a personal bond and furnish a bank guarantee within two weeks. The goods were to be released upon compliance.

8. The court directed the Customs Department to consider the petitioner's application for waiver of demurrage and detention charges, issuing a certificate for the period of detention till release.

Conclusion:
The Writ Petition was disposed of with the above directions, emphasizing the need for fairness, reasonableness, and adherence to due process in matters of provisional release of goods under the Customs Act.