2025 (2) TMI 886 - HC - Customs

Classification of Wheat Flour Sheet Dough imported by the Petitioner - seeking withdrawal of impugned Seizure Memo - HELD THAT - When no Show Cause Notice is issued to ask the importer to furnish a Bank Guarantee even to secure the anticipated redemption fine and anticipated penalties would be rather harsh. We are therefore of the view that interest of justice would be served if the said goods imported by the Petitioner under all six Bills of Entry listed at items (a) to (f) of paragraph 2 of this order are allowed to be provisionally released on the Petitioner executing a Provisional Duty Bond as per the assessable value of all six Bills of Entry and a Bank Guarantee equivalent to a sum of Rs.85 Lakhs. This Bank Guarantee would secure the Revenue for approximately 50% of the differential duty if payable by the Petitioner. It is accordingly so ordered. The Provisional Duty Bond as well as the Bank Guarantee shall be furnished by the Petitioner to Respondent No. 3 within a period of one week from today. On the aforesaid Bond and Bank Guarantee being furnished the Customs Department shall provisionally release the said goods of the Petitioner covered under the aforesaid six Bills of Entry within a period of one week thereafter. Conclusion - The provisional release of the goods imported under all six Bills of Entry allowed upon the Petitioner s execution of a Provisional Duty Bond and a Bank Guarantee equivalent to Rs. 85 Lakhs. Petition disposed off.

Summary

The High Court of Bombay considered a Writ Petition seeking various directions related to the release of imported goods under the Customs Act, 1962. The core issue revolved around the classification of "Wheat Flour Sheet Dough" imported by the Petitioner and the consequent duty implications. The Petitioner alleged misclassification by the Revenue, leading to the seizure and non-release of the goods under multiple Bills of Entry. The Court addressed the provisional release of goods, the requirement of Bank Guarantees, and the timeline for adjudication.The Court analyzed the facts and arguments presented by both parties, focusing on the necessity of provisional release for the goods covered under all six Bills of Entry. The Petitioner contested the conditions imposed for the provisional release, particularly the requirement of a Bank Guarantee covering anticipated redemption fines and penalties. The Court acknowledged the merit in the Petitioner's argument, emphasizing the absence of a Show Cause Notice and the potential harshness of the conditions imposed.In its ruling, the Court ordered the provisional release of the goods imported under all six Bills of Entry upon the Petitioner's execution of a Provisional Duty Bond and a Bank Guarantee equivalent to Rs. 85 Lakhs. The Bank Guarantee aimed to secure the Revenue for approximately 50% of the potential differential duty. The Court highlighted the importance of balancing the interests of justice and the Revenue, considering the lack of a Show Cause Notice at the time of the provisional release.Furthermore, the Court mandated the issuance of Show Cause Notices within a specific timeline, allowing for the adjudication process to proceed promptly. The Court kept all contentions regarding classification open for consideration during the adjudication. Additionally, the Court outlined provisions for future imports of similar goods by the Petitioner, emphasizing the need for separate Show Cause Notices and the furnishing of a Provisional Duty Bond and Bank Guarantee for such imports.Regarding the prayer for a Detention-cum-Demurrage Waiver Certificate, the Court refrained from expressing an opinion, allowing the Petitioner to apply for the same before the Authorities at the appropriate stage. Ultimately, the Court made the Rule absolute in the specified terms, disposing of the Writ Petition without costs.This judgment establishes the principles of provisional release of goods pending adjudication, the necessity of balancing interests in imposing conditions for release, and the importance of timely adjudication processes in customs matters. It emphasizes procedural fairness and the need for clear timelines in customs enforcement actions.