2022 (12) TMI 326 - HC - Customs

Seeking provisional release of imported goods - import of Magnesium Carbonate from M/s.Sea Hawk International LLC located in the United Arab Emirates - It is the grievance on the part of the respondent that the exporters at Dubai are reluctant to share the details of the supplier from Turkey or any documents related to goods movement - HELD THAT - Noticing the fact that for the two years the goods have arrived and also because the investigation has not been completed as yet, the provisional release of the goods as requested for is reconsidered. What we find is the doubt lurking in the mind of the authority concerned with regard to the certificate of Country-of-Origin. According to the authorities, they have reason to believe that the Country-of-Origin is not shown in the certificate of Dubai Chamber of Commerce which has been given an authority by the UAE Government to issue all types of certificates for origin of goods and products exported or re-exported from UAE in accordance with the relevant rules and procedures adopted by the Dubai Chamber of Commerce. Number of correspondences we could see where inquiry has been made with the petitioners seeking various documents. The goods are not of a perishable nature nor of hazardous character. They are the goods which could have been seized and in that eventuality, the petitioners could have taken recourse to the provision of Section 110A of the Customs Act for the provisional release of the goods, the extension could have been also possible with six months and further six months by the authority of the Principal Commissioner of Customs or Commissioner of Customs, after reasons to be recorded in writing, who would choose to extend the period. Instead of following this, the goods have been simply detained and the inquiry has been initiated, which is continuing for the period of two years. This would surely defeat the right of the party concerned to even take recourse to the provision of Section 110A of the Customs Act and ask for the provisional release of the goods - Undoubtedly, Section 110(2) of the Customs Act provides for some sort of inquiry where the order for extension is to be passed applying the mind and not in a routine manner. If, otherwise, the officer is of the opinion that for some satisfactory and bona fide reasons within the time frame provided under Section 110(2) of the Customs Act, the investigation could not be completed. Here, there is no seizure at all and what has happened is only the detaining of the goods on the ground of the authority concerned questioning the Country-of-Origin certificate - Without further dilating the issue, the petition deserves to succeed. The petitioners would be entitled to have a release of the goods completely without any fetter, however, the goods are alleged to be from Pakistan as the Country-of-Origin Certificate is doubted. Let the inquiry be expedited and with a word of caution to all concerned to follow the statute. We are releasing the goods provisionally - petition allowed.

Summary

Issues Involved:
1. Release of imported goods detained by Customs.
2. Validity and verification of the Country-of-Origin certificate.
3. Legal provisions under the Customs Act for provisional release of goods.
4. Compliance with statutory timelines for investigation and detention of goods.

Detailed Analysis:

1. Release of Imported Goods Detained by Customs:
The petitioners sought a writ of mandamus under Article 226 of the Constitution of India, directing the respondents to release the imported goods detained at Mundra Port. The goods, imported under Bill of Entry No.7015597 dated 25.02.2020, had been detained for over two years without seizure, which the petitioners argued was unlawful.

2. Validity and Verification of the Country-of-Origin Certificate:
The goods were accompanied by a Country-of-Origin certificate issued by the Dubai Chamber of Commerce, indicating Turkey as the origin. The Customs authorities doubted the certificate's authenticity and suspected the goods might originate from Pakistan. Despite multiple requests, the petitioners could not provide additional movement documents from Turkey Customs, citing non-cooperation from the Dubai exporter due to COVID-19.

3. Legal Provisions Under the Customs Act for Provisional Release of Goods:
The petitioners invoked Section 110A of the Customs Act, which allows for the provisional release of goods. The Court noted that the goods had not been formally seized under Section 110, which mandates an inventory and a six-month timeline for issuing a notice. The Customs authorities' continuous detention without seizure was deemed contrary to the statute, preventing the petitioners from seeking provisional release under Section 110A.

4. Compliance with Statutory Timelines for Investigation and Detention of Goods:
The Court observed that the Customs authorities had not adhered to the statutory timelines for investigation and detention. Under Section 110(2), goods must be returned if no notice is issued within six months of seizure, extendable by another six months. The continuous detention without seizure for over two years was found to be unlawful.

Judgment:
The Court allowed the petition, directing the provisional release of the goods. The petitioners were required to furnish a Bank Guarantee of Rs.2,00,000/- for eight weeks, during which the Customs authorities were to complete their inquiry. If the Country-of-Origin was confirmed as Pakistan, the petitioners were to fulfill their legal obligations. The judgment emphasized adherence to statutory procedures and timelines, ensuring that the petitioners' rights were not unduly compromised by prolonged detention without formal seizure.