2021 (12) TMI 196 - AT - Customs

Rejection of application for provisional release of the seized warehoused goods - goods were exclusively meant for export - Section 110A of the Customs Act, 1962 - HELD THAT - Since the proceeding of DRI is continued, no final conclusion can be drawn as regard the allegation of DRI that whether the appellant have correctly classified the goods and/or valued the imported goods therefore, we proceed to decide only the issue of release of the goods - since the goods before import and warehousing was intended to be exported, no prejudice will cause to the revenue with regard to dispute, if any for classification of goods and/or valuation of the goods. There is no dispute on the fact that the appellant had export order in possession, moreover, they had received the part payment against the export order therefore, it is clear that the goods which were warehoused and the goods seized by the DRI was already meant for export. In this position, the mala fide cannot be attributed to the appellant. From the provision of Foreign Trade Policy and Hand Book Procedure, it is clear that continued withholding of export consignment even if seized by any agency is not appreciated as per Foreign Trade Policy . After drawl of samples, the seized goods can be allowed to clear for exports pending investigations by accepting undertaking of the exporter - In view of the clear provision under Foreign Trade Policy and Hand book Procedure as reproduced above, the goods which are under seizure is required to be released provisionally for export without payment of duty. It is also found that the department could not make a prima facie case even for seizure of the goods in view of the contrary test reports. The warehoused goods which are meant for export only must be released provisionally by accepting only a bond of the total value of the goods, accordingly, we direct the concerned respondent to release the goods provisionally on execution of only a bond for full value of the goods and the same shall be allowed to be exported without any payment of duty, fine, penalty. The appellant is given liberty to approach the concerned authority for issuance of waiver certificate for the demurrage charges which the concerned authority shall consider in the facts and circumstances of the present case, in accordance with law - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Provisional release of seized warehoused goods for export
- Extension of show cause notice period
- Demurrage/storage charges waiver

Provisional Release of Seized Warehoused Goods for Export:
The appeal concerned the rejection of the application for provisional release of seized warehoused goods for export. The appellant argued that the goods were intended for export, supported by export orders and part payment received before seizure. Despite conflicting test reports on the goods' classification, the appellant contended that there was no mala fide intent in declaring the goods. Reference was made to Foreign Trade Policy and Handbook of Procedure, emphasizing that goods warehoused for export should be released provisionally without prejudice to the revenue. The Tribunal noted that since the goods were meant for export, provisional release would not harm revenue interests. Considering the provisions of the Foreign Trade Policy, the Tribunal directed the release of the goods provisionally for export without duty payment, based on a bond for the goods' value.

Extension of Show Cause Notice Period:
The appellant raised concerns about the extension of the show cause notice period by the Directorate of Revenue Intelligence (DRI) without issuing a notice or providing an opportunity for the appellant to respond. It was argued that only the adjudicating authority could extend the notice period, rendering the extension by DRI as without jurisdiction. The Tribunal acknowledged the issue but focused solely on the release of goods for export, stating that the continued seizure was without jurisdiction, providing grounds for the unconditional release of goods for re-export.

Demurrage/Storage Charges Waiver:
The appellant highlighted the substantial demurrage and storage charges incurred due to the illegal seizure of goods, amounting to approximately ?10 crores. The request for a waiver certificate for these charges was made under Regulation 6(1)(l) of Handling of Cargo Regulations. While the Tribunal did not directly address this issue in its decision, it granted the appellant the liberty to seek a waiver certificate for demurrage charges from the concerned authority, to be considered based on the case's circumstances and legal provisions.

The Tribunal's decision set aside the impugned order, allowing the appeal and directing the provisional release of the warehoused goods for export on a bond without duty payment. The judgment emphasized the goods' intended export purpose, the lack of revenue prejudice, and the necessity to comply with Foreign Trade Policy provisions. The extension of the show cause notice period by DRI was noted as an issue but not the focus of the decision, which primarily revolved around the release of goods for export. The appellant's demurrage and storage charges waiver request was not directly addressed in the judgment but was acknowledged as a matter for the concerned authority to consider.