2018 (9) TMI 589 - AT - Customs

Provisional release of goods - Section 110A of CA - Held that - In such a situation it cannot be conclusively said that the enhancement of the value proposed by DRI is correct, at the same time it can also not to be concluded that price declared by the appellant is also correct, therefore taking their balance we are of the opinion that the condition imposed i.e. bank guarantee for 200% of differential duty is very harsh - appeal allowed in part.

Summary

Issues:
Provisional release order challenged due to harsh conditions imposed.

Analysis:
The appeal challenged a provisional release order issued by the Commissioner of customs, Mundra Commissionerate, communicated by the Deputy Commissioner of Customs house, Mundra. The order required the seized goods to be released provisionally under Section 110A upon execution of a bond for the full value determined by DRI, along with a bank guarantee equal to twice the amount of the differential duty calculated by DRI as security. The appellant contested the conditions as harsh, emphasizing the lack of positive evidence at the preliminary investigation stage. The appellant argued that the DRI's determination of value based on a contract between China and Singapore was irrelevant to their case, presenting evidence of contemporaneous imports with declared values equal to or less than theirs. Citing previous judgments, the appellant asserted that imposing stringent conditions during the provisional release stage was unwarranted. Reference was made to Board Circular No. 35/2017-Cus, allowing for flexibility in security deposit amounts based on the case's specifics, to support the argument against the excessive bank guarantee requirement.

The Revenue, represented by the Superintendent (AR), upheld the Competent Authority's imposed conditions for the goods' provisional release. After considering both sides' submissions and examining the records, the Tribunal acknowledged the preliminary nature of the investigation and refrained from making definitive judgments on the case's merits. However, in light of the prima facie evidence presented, including the direct importation of goods from China via Dubai and the comparability of declared values with contemporaneous imports, the Tribunal found the DRI's proposed value enhancement questionable. Balancing the uncertainties regarding both the DRI's and appellant's declared values, the Tribunal deemed the 200% bank guarantee condition excessively harsh. In alignment with the cited judgments and the case's specifics, the Tribunal concluded that justice would be better served by reducing the bank guarantee requirement to 50% of the differential duty amount. Consequently, the Respondent Commissioner was directed to permit provisional release upon execution of a bond for 100% of the goods' value and furnishing a bank guarantee for 50% of the differential duty by the appellant. The appeal was partially allowed under these revised terms.