2024 (5) TMI 1199 - HC - Customs

Seeking release of seized goods u/s 110A - Non-issuance of a show cause notice within the stipulated time - valuation and duty discrepancies - Imports cutting blades - HELD THAT - The respondent argued that the Circular from 2017 was superseded by an amendment in 2018, exempting cases with provisional release from the six-month time limit for issuing show cause notices. The Tribunal held that this exemption applied to the present case. We hold that the order passed by the learned Tribunal calls for interference. Accordingly, the appeal is allowed and the order passed by the learned Tribunal is set aside. As mentioned, two conditions were imposed for grant of provisional release. So far as the first condition of execution of bond is concerned, we find there is no ground to interfere with the same and the said condition is affirmed. So far as the second condition is concerned, the bank guarantee of Rs. 65,00,000/- is to cover the estimated differential duty probable fine and penalty. We prima facie find that in the order passed by the adjudicating authority or the appellate authority there is no indication as to how the value of goods have been arrived at on a provisional basis. Therefore, we are of the view that the interest of the revenue will be protected if the respondent is directed to furnish a bank guarantee for Rs. 25,00,000/- and a bond for the remaining Rs. 40,00,000/- in respect of the second condition. The respondent in compliance of the above three conditions to the satisfaction of the department, the seized goods shall be provisionally released within a period of 10 days from the date on which the conditions are complied with. Thus, the appeal is disposed and the connected application stands closed.

Summary

Issues Involved: Appeal against order for release of seized goods under Section 110A of the Customs Act, 1962 based on valuation and duty discrepancies.

1. The respondent imported cutting blades which were detained for undervaluation. An application under Section 110A was filed for provisional release, subject to conditions. The Commissioner of Customs (Appeals) dismissed the appeal against these conditions.

2. The Tribunal allowed the appeal on the grounds of non-issuance of a show cause notice within the stipulated time under Section 110(2) of the Act. The respondent cited a Board Circular emphasizing the need to adhere to the time limit for issuing show cause notices even after provisional release of goods.

3. The respondent argued that the Circular from 2017 was superseded by an amendment in 2018, exempting cases with provisional release from the six-month time limit for issuing show cause notices. The Tribunal held that this exemption applied to the present case.

4. The Tribunal concluded that the order for release of seized goods needed interference. The conditions for release were modified: a bond for the estimated value of goods and a reduced bank guarantee were required.

5. The appeal was allowed, and the respondent was directed to comply with the modified conditions for provisional release within 10 days for the goods to be released. The appeal was disposed of, and the related application was closed.