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2020 (10) TMI 70 - AT - CustomsProvisional release of the seized goods on execution of Bond and on furnishing of bank guarantee - Section 110 A of the Customs Act, 1962 - HELD THAT - As per section 110A, the Adjudicating Authority may, pending the final order, release the goods to the owner on taking a bond from him in the proper form with such security and conditions as the Adjudicating Authority may require. Thus, the Adjudicating Authority has to take a decision and the owner of the goods is required to be apprised of the reasons culminating in the provisional release order. In the present case, it transpires that the office put up a note indicating the value of bond and the value of bank guarantee/security and this note has merely been signed by the Commissioner. It also needs to be noted that even the note was not supplied with the order. Such a procedure does not satisfy the requirement of Section 110A of the Customs Act. The order passed by the Commissioner must indicate application of mind and contain reasons for passing an order for provisional release. Each case has to be considered on the basis of the facts brought to the notice of the Commissioner. There is no hesitation in observing that the communication dated April 27, 2020 for provisional release of goods should be set aside - appeal allowed - decided in favor of appellant.
Issues:
Provisional release of seized goods under Section 110A of the Customs Act, 1962. Detailed Analysis: Issue 1: Provisional Release of Seized Goods The appeal was filed challenging the Commissioner Customs, Indore's order for the provisional release of seized goods upon execution of a bond and furnishing a bank guarantee. The appellant imported nutrition supplements, paid customs duty, but the goods were detained before clearance. The appellant applied for provisional release under Section 110A of the Customs Act, stating the goods were for human consumption and prone to damage. The Assistant Commissioner's communication required a bond of ?86,22,915 and a bank guarantee/security of ?1,38,19,048 for release. Analysis: The appellant argued that the order lacked reasoning as the Assistant Commissioner did not provide justification for the bond and bank guarantee amounts. The Adjudicating Authority must decide on provisional release based on specific reasons, as per Section 110A of the Customs Act. The note prepared and signed by the Commissioner and Assistant Commissioner did not fulfill the requirement of providing reasons for the release order. Thus, the communication for provisional release was deemed inadequate and set aside. Issue 2: Compliance with Section 110A of the Customs Act Section 110A of the Customs Act allows provisional release of seized goods pending adjudication upon fulfilling conditions set by the Adjudicating Authority. The authority must provide reasons for the release order, considering each case's facts. In this case, the note signed by the Commissioner lacked reasoning and was not supplied with the order, failing to meet the statutory requirement. Analysis: The Tribunal emphasized that the Commissioner's order for provisional release must demonstrate application of mind and contain reasons for the decision. The lack of detailed reasoning in the order and note presented did not meet the legal standard set by Section 110A. The Commissioner was directed to pass a new order for provisional release within a week, considering the specific circumstances of the case and the goods' nature. Conclusion: The Tribunal allowed the appeal, setting aside the communication for provisional release and directing the Commissioner to issue a new order within a week with proper reasoning. The seized goods, meant for human consumption and susceptible to deterioration, were not to be disposed of for eight weeks to facilitate the provisional release process.
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