2018 (3) TMI 1147 - HC - Customs

Provisional release of goods - writ court has failed to appreciate the law that when there is no prohibition for seizure of the provisionally released goods under Section 110-A of the Customs Act, 1962, there was a flagrant violation of the statutory provisions of the Export and Import regulations read with Customs Act - Held that - Writ court failed to appreciate that DRI, CZU, on re-examining the consignment, had arrived at revised values of the offending goods and communicated the same to the concerned Commissionerate, so that the terms of provisional release would be suitably modified by them, so as to reflect the factual position in respect of the quantity and value of the seized goods - there shall be a provisional release of goods, mentioned in Annexure No.II, dated 14.09.2017 of the Deputy Director, Government of India, Ministry of Finance, Department of Revenue, Directorate of Revenue Intelligence Nodal Unit, Chennai, addressed to the Commissioner of Customs, Chennai-IV, Customs House, Chennai, on payment of 30% of the differential duty, on the provisional assessed value of ₹ 2,80,46,001/- - Apart from the above, the respondent shall submit a personal bond on the total provisionally assessed value, as per the Annexure No.II. Appeal disposed off.

Issues Involved:
1. Provisional release of goods under Section 110-A of the Customs Act.
2. Investigation and seizure by SIIB and DRI.
3. Compliance with provisional release conditions.
4. Legal authority and jurisdiction of DRI over the provisional release order.
5. Intellectual Property Rights (IPR) and BIS certification violations.
6. Contempt petition and modification petition filed by the parties.
7. Demurrage and detention charges.

Detailed Analysis:

1. Provisional Release of Goods under Section 110-A of the Customs Act:

The writ appeal challenges the writ court's order directing the provisional release of goods. The writ court had ordered the provisional release of goods after the payment of duty amounting to ?15,12,289 on the re-determined value as per the SIIB report and after re-verifying the Bank Guarantee and Personal Bond filed by the respondent. The goods were to be released within ten days from the receipt of a copy of the order.

2. Investigation and Seizure by SIIB and DRI:

The respondent, engaged in the import and trading of mobile phones and accessories, imported a consignment from Hong Kong. Upon arrival at Chennai Sea Customs Port, the consignment was taken up for examination by SIIB, which reported further investigation. The consignment was seized under a seizure mahazar dated 03.05.2017. The respondent sought the provisional release of the seized goods under Section 110-A of the Customs Act, which was granted by the Assistant Commissioner of Customs on 16.06.2017, subject to certain conditions.

3. Compliance with Provisional Release Conditions:

The respondent complied with the conditions imposed for provisional release, including the payment of differential duty and execution of the bond. However, the Directorate of Revenue Intelligence (DRI) instructed not to permit the clearance of goods without their consent, leading to the non-implementation of the provisional release order.

4. Legal Authority and Jurisdiction of DRI over the Provisional Release Order:

The writ petitioner argued that the DRI's intervention in withholding the consignment was improper, as the statutory order for provisional release by the Assistant Commissioner of Customs had not been reviewed or annulled. The writ court agreed, stating that the DRI could not sit in judgment over the order of the Assistant Commissioner of Customs. However, it acknowledged the need to ensure that the ongoing investigation was not hampered.

5. Intellectual Property Rights (IPR) and BIS Certification Violations:

The DRI's investigation revealed IPR violations and the need for BIS certification for certain goods. The re-examination found a significant increase in the quantity of goods violating copyrights and a substantial discrepancy in the declared value of the goods. The DRI communicated the revised values to the concerned Commissionerate for modifying the terms of provisional release.

6. Contempt Petition and Modification Petition Filed by the Parties:

The respondent filed a contempt petition for the willful disobedience of the writ court's order, while the Assistant Commissioner of Customs filed a modification petition seeking an extension of time and clarification. The writ court dismissed the modification petition, stating that the provisional release order covered only non-confiscated goods. The court directed compliance with the provisional release order within fifteen days.

7. Demurrage and Detention Charges:

The respondent sought a waiver of demurrage and detention charges due to the prolonged detention of goods. The writ court observed that the department should issue a Demurrage and Detention Certificate from the date of detention till the date of release, considering the goods were detained for examination at the instance of SIIB.

Conclusion:

The High Court directed the provisional release of goods, excluding those violating IPR and requiring BIS certification, upon payment of 30% of the differential duty on the provisional assessed value and submission of a personal bond. The court sustained the writ court's observation regarding the issuance of a Demurrage and Detention Certificate. The writ appeal was disposed of with no order as to costs.

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