2024 (8) TMI 1354 - AT - Customs

Granting of provisional release of the seized goods wherein the appellant was directed to furnish their bond equal to the value of goods and to furnish a bank guarantee equal to the duty - seized imported areca nuts - non-submission of legitimate documents regarding the source of said seized goods - HELD THAT - The goods were seized after primary investigation. There is no evidence that even though it is assumed that the goods were diverted from SEZ but as per the documents submitted by the appellant the goods were procured by the appellant from domestic supplier. It is also fact that transaction also suffered the GST and E-way bill and invoices were raised. It is also found that the detail investigation is yet to be carried out and only thereafter it can be established whether the goods under seizure is clandestinely form KASEZ or otherwise. In this position, the condition of bank guarantee of Rs. 6,20,26,403/- appears to be very harsh. Therefore, the amount of bank guarantee needs to be reduced, in the facts and circumstances of the case. Accordingly, the goods may be provisionally released on execution of bond for Rs. 3,65,78,838/- with a bank guarantee of Rs. 3 crores. The impugned order is modified - Appeal disposed off.

Summary

Issues:
Provisional release of seized goods with conditions of bond and bank guarantee under Customs Act, 1962.

Analysis:
The appeal was directed against an order-in-original issued by the Deputy Commissioner Customs, Kandla, granting provisional release of seized goods with conditions of a bond and bank guarantee. The order was issued in compliance with the Hon'ble Delhi High Court order in a writ petition. The Adjudicating Authority observed that the seized goods, dried Areca Nuts, were suspected to be imported without duty payment. The investigation revealed discrepancies in the documentation provided by the appellant regarding the source of goods. The DRI suspected that the goods were part of a consignment cleared without duty payment under the guise of export. The Commissioner Customs, Kandla, granted provisional release with conditions of a bond and bank guarantee, leading to the appellant's appeal.

The appellant, represented by Ms. Priyanka Goel, argued that the seized goods were lawfully acquired from the domestic market and not subject to Customs Act provisions. She contended that the department lacked corroborative evidence for the allegations and failed to address the documents submitted by the appellant. The appellant maintained that even if there was diversion, they acted in good faith by procuring goods from legitimate suppliers and discharging GST liabilities. The appellant also challenged the valuation method used for determining the bond and bank guarantee amounts, asserting that the Customs Act sections invoked were inapplicable to locally procured goods intended for domestic sale.

On the other hand, Shri R. K. Agrawal, representing the Revenue, supported the Commissioner's decision for provisional release based on the DRI's investigation findings of possible diversion from SEZ. He argued that the conditions of bond and bank guarantee were justified.

After considering both sides, the Tribunal found that while there was suspicion of diversion from SEZ, the appellant had procured the goods from domestic suppliers with proper documentation and tax compliance. The Tribunal noted that detailed investigation was pending to confirm the goods' origin conclusively. Thus, the Tribunal deemed the bank guarantee amount excessive and reduced it, allowing provisional release on a reduced bond amount. The impugned order was modified accordingly, disposing of the appeal.