2008 (12) TMI 219 - HC - Customs

Seizure - Provisional release of goods - denial on the ground that the case is still at the pre-mature stage for release of goods/vehicle in absence of due investigation - Held that - since show cause notice dated 25th August, 2008 has been issued, it goes without saying that fact finding is complete and investigation is over and the matter has to be adjudicated. Since fact finding is complete, there is no reason why the proper directions shall not be issued for release of betel nuts and the truck in question. Therefore, the order dated 27th March, 2008 cannot be sustained and is, thus, set aside and quashed. Since a prayer has been made for release of the goods in question, considering the facts and circumstances of the case, the Commissioner of Customs (Preventive), West Bengal shall release the goods, that is, betel nuts in question on execution of full value bond of the goods and on payment of 25% of the value of the goods as cash security in accordance with law - petition allowed.

Summary

Issues:
Challenge to order of Commissioner of Customs for rejection of prayer for provisional release of goods under Section 110A of Customs Act, 1962.

Analysis:
The petitioners challenged the order of the Commissioner of Customs rejecting their prayer for provisional release of goods, betel nuts, under Section 110A of the Customs Act, 1962. They argued that despite willingness to furnish the required bond and security, the release was denied on the grounds of the case being at a premature stage and investigation still in progress. The petitioners highlighted that Section 110A allows for provisional release of goods pending adjudication, especially for perishable items, which was overlooked by the Customs Authority. They also cited a previous order for release in a similar matter. The High Court found that since a show cause notice had been issued, indicating completion of fact-finding and investigation, there was no justification for withholding the release. Consequently, the court set aside the order and directed the Commissioner to release the goods upon execution of a full value bond and cash security payment.

The court noted that the Customs Authority's practice of not releasing goods until the investigation is completed was not valid in this case, given the issuance of a show cause notice. The judgment emphasized that with the completion of fact-finding, the proper direction for release should be issued. Therefore, the order rejecting the prayer for release was deemed unsustainable and was quashed. The court directed the Commissioner to release the betel nuts upon execution of a full value bond and payment of 25% of the goods' value as cash security. Additionally, the court ordered the petitioner to provide cash security and execute a bond for the full value of the truck, along with submitting photocopies of the Registration Certificates. The release of goods and the truck was mandated within a week of fulfilling the specified conditions.

In conclusion, the writ petition challenging the rejection of the prayer for provisional release was allowed by the High Court. No costs were imposed on the parties, and they were permitted to communicate the order's essence to the respondent authorities for compliance. The court also directed the prompt provision of a certified copy of the order upon request.