2022 (2) TMI 840 - HC - Customs

Principle of natural justice - provisional release of goods - reexport of subject goods - direction to pay the demurrage, detention, storage charges in respect of the subject goods - Section 110(A) of the Customs Act, 1962 - HELD THAT - It appears from the materials on record that the writ applicant imported a consignment claiming that to be one of Naphtha. It is the case of the writ applicant that the port of loading was at Oman and the port of discharge was to be at any Indian port - The consignment reached the port at Kandla. The DRI expressed some doubt as regards the declaration made by the writ applicant that the goods imported is Naphtha. The DRI did not permit the writ applicant to clear the goods. The DRI thought fit to draw the samples of the goods for the purpose of getting them tested at the Laboratory. It is the case of the DRI that if the goods imported is not Naphtha then the same may be liable to be confiscated. It also appears from the materials on record that at one point of time the goods were cleared and ordered to be released by the respondent No.1 upon the writ applicant furnishing a bond of the amount equivalent to the value of the goods. The bond was also furnished, however, the DRI asked the Commissioner not to give effect to his order of release as the DRI wanted the samples to be further tested - the picture that emerges as on date is and more particularly, considering the test reports that prima facie, the goods is Naphtha. At this stage, the writ applicant is only concerned with getting his goods released. Since there are test reports indicating the goods to be Naphtha, let the goods be released at the earliest on the condition that the writ applicant shall furnish a fresh bond of the amount equivalent to the value of the goods. The bond shall be furnished to the respondent No.1 and upon furnishing such bond, the respondent No.1 shall permit the writ applicant to take delivery of the goods. It is clarified that if the DRI has any further doubts in the matter, it is always open for the DRI to proceed further with its inquiry in accordance with law. For the present, we are only concerned with the goods. Let the goods be released upon the writ applicant furnishing a bond of the amount equivalent to the value of the goods at the earliest - this writ application stands disposed of.

Summary

Issues:
1. Writ application under Article 226 seeking various reliefs including quashing of letters, validity of test reports, release of goods, and waiver of charges.
2. Dispute over imported consignment declared as Naphtha, subsequent doubts by Directorate of Revenue Intelligence (DRI), and multiple conflicting test reports.
3. Order for release of goods upon furnishing a fresh bond equivalent to the value of the goods.
4. Request for return of earlier bond and waiver of demurrage charges.

Analysis:
1. The writ applicant sought relief through a writ application under Article 226, requesting the quashing of letters issued by the Respondent No.1, declaration of test reports' validity, release of goods, and waiver of charges. The applicant emphasized the importance of the test reports conducted by different laboratories and requested the release of goods based on these reports.

2. The case revolved around a consignment declared as Naphtha by the writ applicant, imported from Oman to Kandla. The DRI expressed doubts regarding the nature of the goods, leading to the sampling and testing of the consignment. Conflicting test reports emerged, initially indicating the sample was not Naphtha but later confirming it as Naphtha. The DRI highlighted the potential confiscation of goods if not proven to be Naphtha.

3. The High Court, after considering the various test reports and the circumstances, ordered the release of the goods upon the furnishing of a fresh bond equivalent to the value of the goods by the writ applicant. The Court focused on the immediate release of the goods based on the prima facie evidence from the test reports, while allowing the DRI to continue its inquiry independently.

4. Additionally, the writ applicant requested the return of the earlier bond and the waiver of demurrage charges due to the delay and potential wear and tear of the goods. The Court permitted the applicant to make these requests to the Respondent No.1, emphasizing the need for a prompt and fair decision considering the background of the case and any delays that may have occurred.

In conclusion, the High Court's judgment addressed the immediate release of the goods based on the test reports, the requirement for a fresh bond, and allowed the applicant to seek the return of the earlier bond and request waiver of charges. The Court maintained a balance between the interests of the parties involved and the need for expedited resolution of the matter.