2018 (12) TMI 1307 - HC - Customs

Provisional release of goods - concealed offending goods - intent to evade or not - Held that - There is no dispute to the fact that the imported container was examined by the officials and it was found that 552 cartons of offending goods were concealed at the back part of it behind and underneath the declared goods. When such being the case of the Revenue and further investigation is in progress, that too, by arresting the proprietor of the petitioner, this Court is of the view that any order passed on the request of the petitioner for releasing the other goods would affect the investigation and further adjudication process and therefore, the petitioner has to only face the investigation and adjudication process, especially, when the allegations made against the petitioner is serious in nature, that about 552 cartons of sewing machine needles were found in excess in the import consignments, which is over and above from the declared goods - petition dismissed.

Summary

Issues:
1. Provisional release of goods under Bill of Entry No.8575624 dated 23.10.2018, except for the offending goods.
2. Interpretation of Section 110A of the Customs Act and Customs (Provisional Assessment) Regulations.
3. Allegations of concealment and evasion of duty by the importer.
4. Request for re-export of the concealed goods.
5. Implications of investigation and adjudication process on release of goods.

Analysis:
1. The petitioner sought a mandamus for the provisional release of goods under a specific Bill of Entry, excluding the offending items. The petitioner, engaged in import and trading, faced scrutiny revealing excess sewing machine needles concealed in the import consignment. The overseas supplier acknowledged the error and requested re-export of the excess goods. The petitioner argued for release under Section 110A of the Customs Act, citing no mala fides. The counter affidavit by respondents highlighted the intentional concealment of industrial needles to evade duty, leading to seizure and ongoing investigation.

2. The petitioner's plea for release of nonoffending goods under Section 110A was countered by the respondents, emphasizing the deliberate concealment of goods to avoid duty payment. The court noted the discrepancy between declared and concealed items, leading to suspicion of evasion. The investigation, including the arrest of the petitioner's proprietor, indicated serious allegations warranting further scrutiny, thus denying the release of goods pending investigation and adjudication.

3. The court deliberated on the conflicting narratives regarding the concealed goods and the impact on the investigation process. The petitioner's argument for releasing declared goods was weighed against the gravity of the allegations and the ongoing investigation. The court concluded that releasing goods while investigation and adjudication were underway could impede the process, especially considering the serious nature of the allegations involving significant quantities of concealed goods.

4. Ultimately, the court dismissed the writ petition, emphasizing the need to allow the investigation and adjudication process to proceed unhindered. The decision highlighted the importance of addressing serious allegations of concealment and duty evasion, underscoring the significance of upholding the integrity of customs regulations and procedures. The dismissal of the petition without costs signaled the court's prioritization of due process and thorough investigation in matters concerning customs violations.