2024 (1) TMI 197 - AT - Customs

Seeking provisional release of seized garlic imported - availing the benefit of Notification No.99/2011-CUS dated 09.11.2011, applicable to the imports under South Asia Free Trade Area Agreement (SAFTA) - HELD THAT - The goods are of perishable nature and it will not be anybody s gain to keep the goods rotting under seizure. It is found that, prima facie, the evidence available with the Department is in the form of transcripts of messages and the investigation is in progress and the Department is yet to negate the certificate issued by the authorities in Afghanistan. Understandably, the enquiry as per the procedure laid down under the Notification regarding the rules of origin is likely to take some time. Therefore, there is nothing wrong in releasing the goods provisionally as has been ordered by the competent authority. However, the only difference of opinion lies in the quantum of Bond and Bank Guarantee to be furnished for such release. In the instant case, the goods have been cleared by the jurisdictional Customs Authorities after satisfying themselves about the conditions of import and the same were seized by DRI at a later date; the goods are of perishable nature and the exact origin of the goods is yet to be ascertained. Therefore, considering the facts and circumstances of the case, we find that the following conditions would suffice in the interest of justice (i) The importers shall furnish a Bond covering the full value of goods and bind themselves to pay the differential duty along with fine, penalty and interest that may be levied on adjudication of the case. (ii) The importers shall furnish Bank Guarantee equal to 30% of the alleged differential duty. Petition disposed off.

Summary

Issues Involved:
The judgment involves the conditions of provisional release of seized garlic imported under Notification No.99/2011-CUS dated 09.11.2011 applicable to imports under South Asia Free Trade Area Agreement (SAFTA). The key issues include the origin of the goods, the conditions for provisional release set by the Commissioner, and the appropriate quantum of Bond and Bank Guarantee required for release.

Issue 1: Origin of Goods and Provisional Release Conditions
The appeals by M/s Shanus Impex and M/s S.K. Overseas challenge the provisional release conditions imposed on seized garlic imported under SAFTA. The goods were seized based on suspicion of non-Afghanistan origin, despite claims by the importers. The High Court of Delhi remanded the case back to the Commissioner, who set conditions for provisional release. The appellants contested these conditions, leading to the current appeals.

Issue 2: Appellants' Arguments and Legal Precedents
The appellants' counsel argued that the goods were imported from Afghanistan and covered by a Certificate of Origin. They raised concerns about the harshness of the Bond and Bank Guarantee amounts, citing ongoing investigations and potential deterioration of goods. Legal cases such as Deenanath Maurya and Swiss Carbonate were referenced to support their stance.

Issue 3: Department's Position and Legal References
The Department's representatives maintained that the goods were not of Afghanistan origin and accused the importers of misusing the Notification to evade duty. They emphasized the importance of conditions for provisional release, citing cases like T.L. Verma & Company Pvt. Ltd. and Apollo Cranes Pvt. Ltd. to support their argument.

Issue 4: Tribunal's Findings and Legal Precedents
After considering both sides, the Tribunal noted the perishable nature of the goods and the ongoing investigation. They highlighted the need for provisional release to prevent goods from deteriorating. Referencing judgments from various High Courts, including the High Court of Gujarat in Swiss Carbonate, they emphasized the importance of fair conditions for release.

Issue 5: Tribunal's Decision and Conditions for Release
The Tribunal concluded that a Bond covering the full value of goods and a Bank Guarantee equal to 30% of the alleged differential duty would suffice for provisional release. They clarified that this decision pertained only to release conditions and not the case's merits. The respondents were directed to allow provisional release within two working days upon fulfillment of the specified conditions.