2022 (5) TMI 150 - HC - Customs

Seeking release of consignment - waiver/ refund of detention/demurrage/shipping charges - HELD THAT - Once the bank guarantee is furnished of the requisite amount, the goods shall be provisionally released in favour of the writ applicants. The respondent No.2 shall see to it that the inquiry is concluded within a period of twelve weeks from today. If for any good reason or if the respondent No.2 has some information as regards the origin of the goods and need some more time, then it shall be open for the respondent No.2 to file an appropriate application seeking extension of time period to complete the inquiry. Application disposed off.

Summary

Issues Involved:
1. Release of imported consignment.
2. Quashing of communication by the respondents.
3. Refund or waiver of detention/demurrage/shipping charges.
4. Provisional release of goods.
5. Inquiry into the origin of goods.

Detailed Analysis:

Issue 1: Release of Imported Consignment
The writ applicants sought the release of their consignment imported under Bill of Exchange No. 4964569. The court noted that the goods were seized by the respondent at the Adani Port based on information suggesting that the goods were imported from Pakistan rather than Abu Dhabi. The court observed that the respondent had allowed the provisional release of the goods on the condition that the writ applicants furnish a bond of full value of the goods with a bank guarantee of the differential duty calculated at 200% BCD and IGST at the appropriate rate. The court found this condition to be potentially unreasonable and onerous, especially since the goods were neither prohibited nor restricted.

Issue 2: Quashing of Communication by the Respondents
The writ applicants also sought to quash the communication dated 25.10.2021 issued by the respondents, which pertained to the seizure and conditional release of the goods. The court did not delve deeply into this issue but implied that the communication's conditions might be harsh and contrary to established judgments, such as the Delhi High Court's decision in Spirotech Heat Exchangers Pvt. Ltd. Vs. Union of India, which deemed similar conditions as very harsh.

Issue 3: Refund or Waiver of Detention/Demurrage/Shipping Charges
The writ applicants requested the refund or waiver of detention/demurrage/shipping charges incurred due to the delay in releasing the consignment. The court acknowledged that the goods had been lying in the customs warehouse for over seven months, accumulating significant charges. The court expressed concern over the indefinite delay in the inquiry and suggested that the prolonged detention without a conclusive inquiry was unreasonable.

Issue 4: Provisional Release of Goods
The court considered the provisional release of the goods multiple times. Initially, it issued notices and directed the respondents to expedite the inquiry. Later, the court explored the possibility of releasing the goods subject to certain terms and conditions, such as the writ applicants furnishing a bond and bank guarantee. Ultimately, the court ordered the provisional release of the goods upon the writ applicants submitting a bank guarantee of Rs.10 Lakh, an undertaking by the Managing Director regarding the payment of differential duty if required, and a bond for the differential duty.

Issue 5: Inquiry into the Origin of Goods
The primary controversy was whether the goods were imported from UAE or Pakistan. The court noted that the inquiry by the Customs Department and DRI was still ongoing and had not reached a conclusion. The court emphasized the need for the inquiry to be completed within a reasonable timeframe and directed the respondents to conclude the inquiry within twelve weeks. If the respondents required more time, they were to seek an extension from the court. The court also indicated that if the inquiry remained inconclusive after twelve weeks, it would be unreasonable to delay further.

Conclusion:
The court ordered the provisional release of the goods upon the writ applicants meeting specific conditions, including furnishing a bank guarantee, an undertaking, and a bond. The court directed the respondents to conclude the inquiry within twelve weeks and allowed for the possibility of seeking an extension if necessary. The writ application was disposed of with liberty for the writ applicants to seek further relief in the future if needed.