2022 (6) TMI 325 - HC - Customs

Attachment of Bank accounts - Validity of seizure memo - Misdeclaration of export consignments - Carpets - seeking release / de-freeze of the bank accounts of the Petitioner - contention of the respondents is that since the silk content is much less than what was declared, it is a case of misdeclaration of both the composition and the value of the goods, which have been exported in the past and the subject goods - section 110 of the Customs Act - HELD THAT - Learned Counsel of Respondents, today, informed that the account pertaining to the petitioner bears the following number i.e., 0055010950000015, which, as noted in the extract above, is maintained with the Jammu and Kashmir Bank Ltd., Connaught Place Branch, having a credit balance of Rs.1,04,888.04/-, as of 10.05.2022 - the other contention of Mr Ojha is that the petitioner would use the account maintained by him with the Jammu Kashmir bank, for receipt of remittances and for availing duty drawback and other benefits on account of the export consignment, which is the subject matter of present writ petition, and, perhaps, the past exports as well. At this juncture, this can only be a possibility since there is hardly any money in the petitioner s bank account. Besides this, the investigation is still on. As and when the respondents are in a position to take next steps in the matter, they cannot be prevented from doing so except that they would have to adhere to what the law mandates. But that necessarily does not mean that, at this stage, the hold should continue, especially having regard to the amount which is lying in the petitioner s bank account maintained with the Jammu and Kashmir Bank - It is also made clear that if any further steps are taken by the respondents, albeit insofar as the past exports and/or the subject consignment is concerned, the petitioner will be at liberty to take recourse to an appropriate remedy to challenge any such actions. Petition disposed off.

Summary

Issues:
1. Export of consignments under shipping bill.
2. Release of frozen bank accounts.
3. Quashing of seizure memo under Customs Act.

Analysis:

Issue 1: Export of Consignments
The petitioner sought relief for immediate export of consignments under a specific shipping bill. The provisional release order dated 10.05.2022 imposed conditions including furnishing a bond and bank guarantee, not disputing goods' identity, and accepting CRCL reports. The CRCL reports indicated varying silk and cotton content in the consignments. The court noted discrepancies in the reports and ruled that the petitioner should not be bound by the third condition related to CRCL reports. The court directed export upon fulfilling the first condition, as identity confirmation was not contested.

Issue 2: Release of Frozen Bank Accounts
Respondents froze the petitioner's bank accounts citing past overvaluation of exported goods. Allegations of misdeclaration of goods' composition and value were made. During the hearing, the respondent revealed minimal balances in the frozen accounts. The court acknowledged the ongoing investigation but ruled in favor of lifting the hold on the main account due to the insignificant balance and the need for adherence to legal procedures. The petitioner was granted the liberty to challenge any future actions by the respondents regarding past exports or the current consignment.

Issue 3: Quashing of Seizure Memo
The petitioner challenged the seizure memo issued under the Customs Act mid-way through the proceedings. Given the provisional release of goods, the court granted liberty to the petitioner to challenge the seizure memo through appropriate statutory remedies. The petitioner was allowed to argue before the relevant authority that the seizure memo was void ab initio.

In conclusion, the court directed the immediate export of the consignments upon fulfilling specified conditions, lifted the hold on the petitioner's main bank account, and granted liberty to challenge the seizure memo through statutory remedies. Pending applications were closed as per the judgment.