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2022 (7) TMI 724 - HC - CustomsSeeking release of detained goods - Betel Nut Supari - to be classified Betel Nut Supari or not - prohibited goods or not - Section 110A of the Customs Act - HELD THAT - It is the consistent view of this Court that in case of provisional assessment, provisional release is permissible. Hence, this Court permits the petitioner to make an application for provisional release under Section 110-A, on such application, when received, shall be disposed of by the Adjudicating Authority, after hearing the petitioner and simultaneous with a prima facie determination of the classification of the commodity, within a period of two (2) weeks from the date of receipt of the application - The Commissioner of Customs (Imports) is hereby directed to release the cargo covered under Bill of Entry No.7556557, dated 18.02.2022, provisionally subject to furnishing of PD bond for full value of the goods and furnishing of bank guarantee at 50% of the differential duty considering, Duty Free Tariff Preference Scheme for Least Developed Countries (LDC) benefit. The Department shall continue their adjudication process and conclude the same without delay. The entire exercise shall be completed within a period of three (3) weeks from the date of receipt of a copy of this order. The writ petition is allowed.
Issues Involved:
1. Classification of imported Betel Nut Supari. 2. Provisional release of detained goods. 3. Compliance with DGFT Notification No.20/2015-2020. 4. Jurisdiction and authority of Customs in classification disputes. 5. Application of Section 110-A of the Customs Act. Detailed Analysis: 1. Classification of Imported Betel Nut Supari: The petitioner imported 27.04 Metric Tons of Betel Nut Supari from Myanmar and declared the goods under Customs Tariff Heading (CTH) 2106 9030. The Customs Authority detained the goods, questioning the classification, asserting that Betel Nut Supari should fall under CTH 08028020 as per the Department's interpretation. The classification dispute arose due to differences in interpreting Chapter 21 and Chapter 8 of the Customs Tariff Act, 1975. The petitioner argued that similar goods had been released at other ports under the same classification, and the FSSAI report confirmed the goods were fit for human consumption. 2. Provisional Release of Detained Goods: The petitioner sought the provisional release of the goods under Section 110-A of the Customs Act, which allows for the release of detained goods on providing security. The Customs Authority had detained the goods since 18.02.2022, causing financial losses to the petitioner. The petitioner cited CBEC Circular No.22/2004-Customs, which directs that goods should be provisionally released in classification disputes unless prohibited or banned. The Court referenced previous judgments and CBIC guidelines, which support provisional release in such cases. 3. Compliance with DGFT Notification No.20/2015-2020: The Customs Authority referred to DGFT Notification No.20/2015-2020, which prohibits the import of Areca Nuts below a CIF value of Rs.251 per kg. The CIF value of the petitioner's goods was approximately Rs.114 per kg, leading the Customs to suspect mis-declaration to circumvent the prohibition. The petitioner argued that the goods were correctly classified and not subject to the notification's restrictions. 4. Jurisdiction and Authority of Customs in Classification Disputes: The respondents argued that classification disputes fall exclusively within the Customs Authority's domain and should not be decided through a writ petition. The petitioner countered that the delay in classification and detention was unjustified, especially since similar goods had been released at other ports. The Court noted that provisional assessment and release are permissible and directed the Customs Authority to expedite the classification process. 5. Application of Section 110-A of the Customs Act: The Court emphasized that Section 110-A permits the provisional release of goods pending adjudication. The Customs Authority's discretion in setting the security amount was acknowledged, but the Court directed that the goods be released provisionally upon the petitioner furnishing a PD bond for the full value and a bank guarantee for 50% of the differential duty, considering the Duty-Free Tariff Preference Scheme for Least Developed Countries. Conclusion: The Court permitted the petitioner to apply for provisional release under Section 110-A. The Customs Authority was directed to release the goods provisionally, subject to the petitioner providing the necessary security. The adjudication process was to continue without delay, and the entire exercise was to be completed within three weeks. The writ petition was allowed, with no order as to costs, and the connected miscellaneous petition was closed.
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