2009 (10) TMI 407 - HC - Customs

Release of goods- The Appellant was found to be in possession of 57,200 memory cards on arrival in Delhi airport from Mumbai on 16th May, 2009. According to the Respondents these were brought by him from Dubai on the previous day i.e. 15th May, 2009 and on arrival in the Mumbai International Airport he failed to disclose that he was carrying dutiable goods. According to the Appellant the said memory cards for use in mobile phones, were freely importable goods for which the customs duty leviable was 4%. According to the Respondent however the duty applicable as per the Baggage Rules for international travel was 35% ad valorem. Thus worked out to Rs.38,45,643 on the basis that the goods were valued at Rs.1,06,67,525. By the order dated 12th August, 2009, the Commissioner of Customs required the appellant to inter alia to furnish cash security in the sum of Rs.50 lakhs, along with certain other conditions. Held that- this Court is of the view that the contentions on the merits of the case need not be gone into at this stage. Considering the value of the goods seized and the amount of 35% ad valorem duty which works out to Rs.38 lakhs approximately, it appears to this Court that the interests of justice would be served if the Appellant is required to furnish a cash security of Rs.25 lakhs instead of Rs.50 lakhs as directed by the Commissioner of Customs. The appeal is disposed of.

Summary

Issues:
- Appeal against order dated 22nd September, 2009 disposing of Writ Petition (C) No. 11092 of 2009.
- Appellant found in possession of 57,200 memory cards at Delhi airport.
- Discrepancy in customs duty leviable on memory cards.
- Requirement for the Appellant to furnish cash security of Rs.50 lakhs.
- Appellant's contention against the cash security amount.
- Modification of the impugned order regarding the cash security amount.

Analysis:
1. The appeal was filed against an order disposing of a writ petition where the Appellant was found possessing a significant number of memory cards at the Delhi airport. The dispute arose regarding the applicable customs duty on these memory cards, with the Respondent claiming a higher duty rate based on the Baggage Rules for international travel. The Commissioner of Customs had initially directed the Appellant to furnish a cash security of Rs.50 lakhs along with other conditions.

2. The learned Single Judge modified the direction requiring the Appellant to provide an undertaking but upheld the requirement for cash security of Rs.50 lakhs. The Judge noted discrepancies in the Appellant's claims regarding the source of the memory cards and highlighted that the Appellant had already deposited Rs.10 lakhs with the Commissioner of Customs.

3. The appeal primarily challenged the harshness of the cash security amount imposed, arguing that the 4% duty amount payable was significantly lower. The Appellant contended that as a domestic passenger, the 35% ad valorem duty under the Baggage Rules should not apply to him.

4. The High Court refrained from delving into the merits of the case and focused on the value of the seized goods and the duty amount. To serve the interests of justice, the Court reduced the cash security amount to Rs.25 lakhs, considering the duty amount of approximately Rs.38 lakhs. The Appellant was directed to furnish the balance of Rs.15 lakhs within two weeks, with the Rs.10 lakhs already deposited being set off against this amount.

5. The modification of the impugned order was limited to the adjustment of the cash security amount, ensuring that the Appellant complied with the revised requirement. The appeal was disposed of with this modification, maintaining the rights and contentions of both parties.

This detailed analysis outlines the key aspects of the judgment, including the background of the case, the legal arguments presented, and the final decision of the High Court in modifying the cash security amount imposed on the Appellant.