2018 (4) TMI 1257 - AT - Customs

Unconditional release of goods - areca nuts imported from Sri Lanka - case of appellant is that the learned Commissioner, without any basis, seized the goods and put a condition of bank guarantee for 100% of the duty amount - principles of natural justice - Held that - the Ministry of Commerce has confirmed that two certificates of origin dated 16.10.2017 were issued. Therefore, the doubt raised by the Customs authority regarding the country of origin prima facie should not exist. The facts in the case of Shiv Ganga Polypet 2018 (2) TMI 1139 - CESTAT MUMBAI are different inasmuch as the doubt of the Customs authority regarding the country of origin could not be removed whereas in the present case, after initiation of the enquiry, the Department of Commerce, Government of Sri Lanka, issued a verification certificate, and the doubt was removed. The condition of bank guarantee for an amount of 100% duty is very harsh - the amount of bank guarantee reduced to 20% of the duty amount and bond amount confirmed for 100% value of the goods - appeal allowed in part.

Summary

Issues:
1. Seizure of goods and imposition of bank guarantee for 100% duty amount.
2. Doubt regarding country of origin of imported goods.
3. Applicability of previous Tribunal judgment in a similar case.
4. Reduction of bank guarantee amount and release conditions.

Analysis:
1. The appeal challenged a letter directing the submission of a bond and bank guarantee for the provisional release of imported areca nuts. The appellant sought unconditional release, arguing that the seizure and 100% duty bank guarantee were unjust. The appellant provided documents proving Sri Lankan origin, including a Certificate of Origin from the Ministry of Industry and Commerce of Sri Lanka.

2. The Customs authority doubted the goods' origin, leading to the seizure. However, the appellant's documentation, including a verification certificate from the Department of Commerce, Sri Lanka, confirmed the goods' origin. The Tribunal noted that the doubt regarding the country of origin should not persist based on the evidence provided.

3. The Revenue argued for the necessity of the bank guarantee based on an ongoing investigation and cited a previous Tribunal judgment setting a 50% bank guarantee requirement in a similar case. However, the Tribunal distinguished the present case, emphasizing the conclusive evidence provided by the appellant regarding the goods' origin.

4. After considering the submissions, the Tribunal found the 100% duty bank guarantee condition to be harsh and reduced it to 20% of the duty amount, while maintaining the bond requirement for the goods' value. The Commissioner was directed to release the goods under the revised conditions within fifteen days of the order.

This judgment highlights the importance of providing substantial evidence to address doubts raised by Customs authorities, the relevance of official documentation in proving the origin of imported goods, and the Tribunal's discretion in adjusting bank guarantee requirements based on the specific circumstances of each case.