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.

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the goods imported by the Petitioner under six Bills of Entry should be provisionally released.
Whether the conditions imposed for the provisional release of goods under the first two Bills of Entry should be applied to the remaining four Bills of Entry.
Whether the Petitioner is required to furnish a Bank Guarantee for anticipated redemption fines and penalties when no Show Cause Notice has been issued.
Whether future imports of the same goods by the Petitioner should be provisionally released under similar conditions.
Whether a Detention-cum-Demurrage Waiver Certificate should be issued for the six Bills of Entry.
How the typographical error in the Bill of Entry Number should be corrected in the judgment.

ISSUE-WISE DETAILED ANALYSIS

Provisional Release of Goods

The legal framework involves the Customs Act, 1962, which governs the import and export of goods in India. The Court considered whether the goods imported by the Petitioner should be provisionally released pending adjudication. The Petitioner argued that the goods should be released as no Show Cause Notice had been issued, and the conditions for provisional release should not include a Bank Guarantee for anticipated fines and penalties.

The Court reasoned that provisional release was justified given the absence of a Show Cause Notice. The Court agreed with the Petitioner that requiring a Bank Guarantee for anticipated fines and penalties was harsh without a formal notice. Thus, the Court ordered provisional release upon the Petitioner executing a Provisional Duty Bond and furnishing a Bank Guarantee securing 50% of the differential duty.

Conditions for Provisional Release

The Court examined the conditions imposed for the provisional release of goods under the first two Bills of Entry and whether these should apply to the remaining four Bills. The Petitioner contended that the Bank Guarantee condition was excessive. The Court found merit in the Petitioner's argument, noting that the guarantee should only cover the differential duty. Consequently, the Court ordered the provisional release of goods under all six Bills of Entry with a Bank Guarantee for 50% of the differential duty.

Future Imports

The Court addressed the issue of future imports of the same goods by the Petitioner. The Court ruled that future imports should be provisionally released under similar conditions, requiring a Provisional Duty Bond and a Bank Guarantee for 50% of the differential duty. The Court clarified that no guarantee would be needed for anticipated fines and penalties, and separate Show Cause Notices would be necessary for future imports.

Detention-cum-Demurrage Waiver Certificate

The Petitioner sought a Detention-cum-Demurrage Waiver Certificate for the six Bills of Entry. The Court did not express an opinion on this request at this stage, leaving it open for the Petitioner to apply for the certificate before the appropriate authorities, who would decide in accordance with the law.

Typographical Error Correction

The Court addressed a typographical error in the Bill of Entry Number in the judgment. The Petitioner requested correction, which the Court granted, replacing "7503032" with "7503023" in the relevant paragraphs of the judgment.

SIGNIFICANT HOLDINGS

The Court established several core principles:

Provisional release of imported goods is justified in the absence of a Show Cause Notice, with conditions tailored to secure only the differential duty.
Future imports of the same goods should be provisionally released under similar conditions, with separate adjudication processes for each import.
Typographical errors in legal documents should be corrected to ensure accuracy.

The final determinations on each issue were:

The goods under all six Bills of Entry were ordered to be provisionally released upon the Petitioner furnishing a Provisional Duty Bond and a Bank Guarantee for 50% of the differential duty.
The Customs Department was directed to issue a Show Cause Notice within six weeks, with the Petitioner required to reply within two weeks of issuance, and adjudication to follow within 12 weeks.
Future imports of the same goods by the Petitioner would be provisionally released under similar conditions, without a Bank Guarantee for anticipated fines and penalties.
The Petitioner was allowed to apply for a Detention-cum-Demurrage Waiver Certificate at the appropriate stage.
The typographical error in the Bill of Entry Number was corrected as requested by the Petitioner.

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