2022 (4) TMI 435 - AT - Customs

Seeking provisional release of goods - Revenue found it necessary to insist upon additional security deposit for recovery of differential duty on culmination of ongoing investigation along with estimated fine and penalty under section 111 and 112 of Customs Act, 1962 - HELD THAT - The deposit of ₹ 97,00,000/-, in tranches between 31st May 2019 and 20th August 2019, as intimated to Deputy Commissioner of Customs, SIIB (Import), JNCH, Nhava Sheva by letter dated 14 th September 2019 is not controverted by Revenue. It is found from record of communication dated 13th September 2019 from the investigating agency to the assessing authority concerned which, in opining that finalisation of the bill of entry can be undertaken on the basis of the test report, is studiously silent about any investigation other than into the impugned consignment. At the same time, it is noted that, despite the seizure having been affected on 29th May 2019, no show cause notice has been issued though, as prescribed under section 110 of Customs Act, 1962, initial deadline of six months, that may be extended to one year for doing so, is attendant upon such deprivation of access to imported goods. It is seen that section 110A of Customs Act, 1962 provides for release to the owner on furnishing of bond in proper form and with such security as the adjudicating authority may require. The impugned goods continue to remain under seizure of customs authorities. Section 110 of Customs Act, 1962 mandates release of goods within six month from the date of seizure unless show-cause notice proposing confiscation has been issued or, on compliance with prescribed procedure, within further six months. The pendency of appeal against the terms of release does not alter the prescription therein. Furthermore, even after the order dated 23 rd October 2019 of the Tribunal, goods continued to be under seizure despite lapse of time even thereafter. The retention of goods, not validated by issue of notice, is not tenable in law and must, in accordance with the law, be released unconditionally to the appellant. In the wake of unwillingness to responsibly aver that investigations have been widened to cover earlier imports or of the lack of demonstrated evidence of such and, considering the absence of any such assigning after intimation from the appellant, the deposit of ₹ 97,00,000/- is attributable only to the seized goods. The interests of Revenue are, thus, not jeopardised by unconditional release - the order directing deposit of ₹75,00,000/- is set aside as insofar as present appeal, arising from the order of provisional release, is concerned, the respondent is not on sound footing. Appeal disposed off.

Summary

Issues:
1. Compliance with Tribunal's order regarding security deposit for provisional release of seized goods.
2. Justifiability of additional security deposit requirement by the competent authority.
3. Continuation of seizure of goods despite Tribunal's order and prescribed timelines under Customs Act, 1962.
4. Attribution of the deposit made by the appellant to seized goods only.

Analysis:

Issue 1:
The appellant contended that the Tribunal's direction in a previous order had not been complied with during the remand proceedings, where a security deposit of ?75,00,000/- in addition to a bond of ?2,00,90,879/- was prescribed by the competent authority for the provisional release of seized goods. The appellant argued that the authority had shown obduracy in refusing to submit to the Tribunal's order for reconsideration of the security deposit requirement.

Issue 2:
The competent authority insisted on an additional security deposit of ?75,00,000 for the recovery of differential duty and other penalties under the Customs Act, 1962, despite the appellant's voluntary payment of ?97,00,000 towards duty evasion on previous imports. The appellant contended that the additional security was unjustifiable, and the matter was remanded back to the authority for reconsideration.

Issue 3:
The Tribunal noted that the competent authority had disregarded its order and reduced the security deposit to ?75,00,000 without providing any explanation for the earlier demand of ?85,00,000. The goods remained under seizure without the issuance of a show-cause notice, contravening the prescribed timelines under the Customs Act, 1962. The Tribunal ruled that the continued retention of goods without a valid notice was untenable in law and ordered their unconditional release to the appellant.

Issue 4:
The deposit of ?97,00,000 made by the appellant was found to be related only to the seized goods and not to previous imports, as no evidence suggested otherwise. The Tribunal determined that the interests of revenue were not jeopardized by the unconditional release of the goods, setting aside the order directing the deposit of ?75,00,000. The Tribunal emphasized that further investigation could continue within the provisions of the law.

In conclusion, the appeal was disposed of with the order for the unconditional release of the goods and the setting aside of the security deposit requirement. The Tribunal emphasized the need for compliance with its orders and the prescribed timelines under the Customs Act, 1962, while allowing for further investigation to proceed in accordance with the law.