1995 (9) TMI 67 - HC - Customs

Summary

Issues:
1. Release of imported goods under the Customs Act.
2. Violation of licensing conditions, misdeclaration, and non-disclosure.
3. Interpretation of Section 111 of the Customs Act regarding prohibited and restricted goods.
4. Impact of undue hardship on the petitioner due to the refusal to release goods.
5. Duty of respondents to balance revenue interests with avoiding unnecessary hardship.

Analysis:
The petitioner imported goods described as computer parts and accessories, facing delays in release due to suspicions of Customs Act violations. The petitioner sought provisional release pending adjudication, arguing no violation occurred except a dispute over the appropriate duty assessment. The respondents, however, claimed ongoing investigations into licensing violations, misdeclaration, and non-disclosure, necessitating completion before release consideration. The petitioner presented a letter from the Department of Electronics asserting the goods were not CKD/SKD kits, urging urgent clearance due to technological obsolescence risks.

A legal precedent was cited where a writ petition for goods release during adjudication was deemed impermissible, contending the same applies pre-adjudication. The petitioner argued for release citing arbitrary and mala fide actions by the respondents. The petitioner maintained compliance with licensing terms, disclosure of details, and absence of misdeclaration, invoking Section 111 of the Act regarding prohibited versus restricted goods. Reference to a Supreme Court case clarified that restrictions constitute prohibitions under Section 111(d), emphasizing the respondents' authority to decide on goods release during ongoing investigations.

The petitioner highlighted extreme hardship caused by the goods' non-release, impacting manufacturing operations and market competitiveness. The court acknowledged the respondents' duty to investigate but emphasized the need to avoid undue hardship on bona fide importers relying on essential components. The court criticized the withholding of goods despite expert opinions and industry necessity, urging a balanced approach considering the petitioner's circumstances. The court directed the respondents to consider a detailed representation for goods release promptly and complete investigations and adjudication within specified timelines to resolve the matter effectively.