2006 (2) TMI 187 - HC - Customs

Summary

Issues:
Import of coated and uncoated paper, provisional release of goods, differential duty assessment, bond and bank guarantee requirements, interest of revenue protection.

Analysis:
The petitioner, an importer of coated and uncoated paper falling under the OGL category, imported goods through ICD Tughlakabad and paid customs duty on a declared value ranging from US$ 204 to US$ 225 PMT. Subsequently, an investigation by the Directorate of Revenue Intelligence led to the seizure of goods and the arrest of the petitioner's Managing Director. The petitioner sought a mandamus for the clearance of goods on declared value or provisional clearance upon depositing a specified amount. Respondent argued mis-declaration and under-valuation, proposing a deposit of the differential amount provisionally assessed at Rs. 29,42,954. Petitioner contended legality of imports and readiness to deposit 20% of the differential duty as per Customs Regulations.

The court considered the submissions and determined the release of goods in favor of the petitioner, subject to conditions. The court acknowledged no real resistance to the release but emphasized the need for depositing the provisional duty amount and providing security for any recoverable balance. Regulation 2 of the Customs (Provisional Duty Assessment) Regulations, 1963 allows the release of goods upon depositing up to 20% of the assessed duty. The court agreed with the petitioner's proposal to deposit 20% of the duty and provide a bank guarantee for 75% of the remaining balance to secure the revenue's interest adequately.

In conclusion, the court directed the petitioner to deposit customs duty, 20% of the differential duty, furnish a bank guarantee for 75% of the remaining balance, provide a bond for the rest of the differential value, redemption fine, and penalty. Additionally, the petitioner had to file an affidavit not challenging the goods' identity during adjudication or prosecution. The writ petition was disposed of with these directions, and each party was to bear its own costs.