2021 (9) TMI 558 - HC - Customs

Provisional release of imported goods - Criteria to be adopted either by the State or an authority of the State whenever it is granted any discretionary power either to increase or decrease any amount which is required to be deposited as security under any statutory provision, especially in revenue related matters - HELD THAT - Whenever such discretionary power is given either to the State or an authority of the State such discretionary power is required to be exercised following the well established principle as enshrined in the doctrine of fairness coupled with the grand old principles of equity. There cannot be any adhocism in the approach by the State or an authority of the State while using such discretionary power. That apart and in any event, cogent and justifiable reasons are required to be recorded in writing whenever such discretionary power is exercised which tantamounts to either increase or decrease of any amount that is required to be deposited as security, especially in revenue related matters of the State. While passing the above directions, whether the learned Tribunal followed the principles of law enunciated in SHRI RAJIB GHOSH VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , NER, SHILLONG 2020 (2) TMI 1560 - CESTAT KOLKATA of the applicable guidelines dated 16th August, 2017, for grant of provisional release of imported goods which are seized under section 110 of the Customs Act, 1962, is required to be looked into. The learned Advocate-on-Record of the appellant is directed to serve notice along with a copy of the appeal papers which before us to the respondent and file an affidavit of service on the next date indicating service as directed herein - List this matter three weeks hence for further consideration.

Summary

Issues: Criteria for exercising discretionary power in revenue-related matters, Compliance with principles of fairness and equity in increasing or decreasing security deposit amounts, Adherence to applicable guidelines for provisional release of seized goods under Customs Act.

In the judgment delivered by the High Court, the primary issue addressed was the criteria to be adopted when exercising discretionary power in revenue-related matters, specifically in deciding whether to increase or decrease the amount required to be deposited as security under statutory provisions. The court emphasized that such discretionary power must be exercised following the principles of fairness and equity, without resorting to adhocism. It was highlighted that cogent and justifiable reasons must be recorded in writing whenever such discretionary power is exercised, especially in revenue-related matters of the State. The court stressed the importance of adhering to established principles and avoiding arbitrary decision-making in such cases.

The judgment also delved into the specific case at hand, which involved a challenge to a judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal had directed the appellant to give a bond for the entire seizure value of the goods and make a security deposit of ?15.00 Lakhs in each case for provisional release of the seized goods. The High Court raised concerns regarding whether the Tribunal had followed the applicable guidelines for granting provisional release of imported goods seized under the Customs Act, 1962. The court indicated the need to examine whether the Tribunal's directions aligned with the principles of law discussed earlier, and requested the Assistant Solicitor General to seek instructions from the client to facilitate the disposal of the matter in the next hearing.

Furthermore, the judgment outlined procedural directions for the parties involved. The court directed the Advocate-on-Record of the appellant to serve notice along with a copy of the appeal papers to the respondent and file an affidavit of service for verification. The matter was listed for further consideration three weeks later, indicating the court's intention to proceed with a detailed examination of the case based on the principles and guidelines discussed during the hearing. The judgment underscored the importance of procedural compliance and adherence to legal standards in resolving the issues raised in the appeal before the High Court.