2020 (7) TMI 428 - AT - Customs

Evasion of duty - fraudulent availment of advance authorisation scheme - appellant have been incurring detention and demurrage charges on account of live consignment - case of appellant is that the respondent has imposed exorbitant conditions for provisional release of goods for home consumption - HELD THAT - There is prima-facie case of malafide on the part of the appellant to claim exemption fraudulently. However, this is not our conclusion on the merits of the case as the detailed investigation is pending. It is also found that the appellant requested for provisional release for re-export of the goods. In that case, a lenient view can be taken. Needless to say that the appellant shall clear the goods on payment of duty as assessed by the Customs - In these circumstances, the appellant deserve for some leniency as regards terms of provisional release of the seized goods. Accordingly, the goods may be provisionally released on furnishing bond of total value with bank guarantee of the amount of 50% of the total duty. Appeal allowed in part.

Issues:
1. Exorbitant conditions for provisional release of goods under Section 110A of the Customs Act.
2. Allegation of evasion of duty by claiming advance authorization scheme fraudulently.
3. Dispute regarding the imposition of bank guarantee equivalent to the duty amount.
4. Request for provisional release for re-export of goods.
5. Determination of the terms of provisional release for the seized goods.

Analysis:

Issue 1: Exorbitant conditions for provisional release
The appellant contended that the conditions imposed for provisional release of goods were arbitrary, unreasonable, and excessive. It was argued that demanding a bank guarantee equivalent to the duty involved was unjust, especially in a case involving live consignments and a claimed exemption. The appellant cited various judgments to support the argument that the conditions were harsh and unreasonable.

Issue 2: Allegation of duty evasion
The Revenue argued that there was a clear attempt to evade duty by fraudulently claiming the advance authorization scheme. The goods were seized based on this suspicion, and it was asserted that the conditions for provisional release were justified. The Revenue relied on Board Circulars and multiple judgments to support their stance on the alleged duty evasion.

Issue 3: Dispute over bank guarantee imposition
The Tribunal found a prima facie case of malafide on the part of the appellant regarding the fraudulent claim for exemption. However, recognizing the pending detailed investigation and the appellant's request for re-export of the goods, a lenient view was taken. The Tribunal decided that the appellant deserved some leniency in the terms of provisional release, reducing the bank guarantee requirement to 50% of the total duty amount.

Issue 4: Request for re-export of goods
Acknowledging the appellant's request for provisional release for re-export of the goods, the Tribunal considered this aspect in determining the terms of release. The Tribunal emphasized that the appellant must clear the goods upon payment of the assessed duty by Customs.

Issue 5: Determination of terms of provisional release
After hearing both parties and reviewing the case, the Tribunal partially allowed the appeal by granting provisional release of the goods under revised conditions. The Tribunal ordered the appellant to furnish a bond of the total value with a bank guarantee equivalent to 50% of the total duty amount for the provisional release of the seized goods, emphasizing the requirement to clear the goods upon payment of the assessed duty.

In conclusion, the Tribunal granted partial relief to the appellant by modifying the terms of provisional release based on the specific circumstances of the case, pending further investigation into the alleged malafide actions.

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