2023 (5) TMI 145 - AT - Customs

Seeking provisional release of seized goods - Imposition of harsh conditions for release of goods - used machinery items/ capital goods - goods cleared on the basis of the assessed value on the payment of assessed duty - HELD THAT - In the present case the goods seized were assessed by the appraising group on the basis of the procedure prescribed as per the circular dated 05.02.2020. The charge of under valuation cannot be established without challenging the assessment made by the assessing group as per the procedure prescribed. It is not the case where the goods where being cleared on the basis of the declared value but were being cleared on the basis of the assessed value on the payment of assessed duty. However, these questions of undervaluation need to be investigated and we are not concerned with those in the present proceedings. As no reasons are forthcoming for enhancing the value of the imported goods over and above the value belonging by the Chartered Engineer. We are of the view that the order prescribing conditions of provisional release is too harsh, taking note of the fact that on the assessed value appellant has already paid duty amounting to Rs. 1,18,94,536/- . Taking into account, the fact that issue is in respect of the redetermination of assessed value, the bond should not be more than the deferential value. Commissioner (Appeal) has in fact modified the order in respect of the security deposit to be made without amending the value of the bond - taking into account of the fact of the case the value of the bond and security needs to be re-determined in interest of justice protecting interest of both revenue and the appellant. The conditions in the order of provisional release modified, stating that used equipment (Capital goods) imported by the appellant and seized under the seizure memo no. 107/2022 dated 4/11/2022 can be released on execution of indemnity bond of Rs. 4,00,00,000/- along with it bank guarantee of Rs. 50,00,000/-. The appeal is allowed modifying the Impugned order.

Summary

Issues:
The issues involved in this case include the provisional release of seized goods under Section 110A of the Customs Act, 1962, the assessment of used machinery items/capital goods, and the determination of bond and security deposit amounts for the release of the goods.

Provisional Release of Seized Goods:
The appellant had filed a bill of entry for clearance of old used machinery and declared an assessable value. Subsequently, the goods were seized by the DRI for investigations. The original authority directed for provisional release of seized goods subject to certain conditions, including an execution of a bond and furnishing of a bank guarantee. The Commissioner (Appeal) modified the conditions for provisional release, reducing the bank guarantee/security deposit amount. The Tribunal considered the impugned order and modified the conditions further, allowing the release of the seized goods against an indemnity bond and a bank guarantee.

Assessment of Used Machinery/Capital Goods:
The goods sought to be cleared were used machinery items/capital goods, and the assessment was done as per the Board circular dated 05.02.2020. The circular outlined guidelines for the assessment of second-hand machinery/used capital goods, including the requirement for inspection/appraisement reports by overseas or local Chartered Engineers. The goods in this case were assessed following the procedure laid down in the circular, and duty was paid accordingly.

Determination of Bond and Security Deposit Amounts:
The Central Board issued guidelines for provisional release of seized imported goods under Section 110A of the Customs Act, 1962. The guidelines specified conditions for provisional release, including the execution of a bond for the full value/estimated value of the seized goods and a bank guarantee/security deposit to cover duty, fines, and penalties. The Tribunal noted that the order prescribing conditions for provisional release was too harsh, considering that duty had already been paid on the assessed value. The Tribunal modified the conditions, determining a reduced bond and security deposit amount for the release of the seized goods.

Final Decision:
The Tribunal allowed the appeal, modifying the impugned order to allow the provisional release of seized goods against an indemnity bond of Rs. 4,00,00,000/- and a bank guarantee of Rs. 50,00,000/-. The Tribunal emphasized the need for the matter to be finalized expeditiously within six months of the receipt of the order.