2012 (7) TMI 883 - HC - Customs

Detention of goods - Import of flat bed/circular knitting machines - mis-declaration of value and other particulars - arbitration conditions imposed by the department to release the goods - Held that - Mere dispute of classification or valuation could not justify power of confiscation and imposing of condition of furnishing of bank guarantee equal to 25% of the value of the goods. Revenue directed to immediate provisional release of goods on conditions mentioned in the order of provisional release except the requirement of declaration that the petitioner will not dispute the value of goods and will furnish bank guarantee. The submission made by the counsel for the respondents that an appeal would lie to the Commissioner (Appeals) against the said orders and this Court should not exercise its jurisdiction under Articles 226 & 227 of the Constitution of India, is not acceptable in view of the fact that the detention of the goods has been made since 1-7-2011 onwards and the conditions imposed by the Joint Commissioner are in violation of the directions issued by this Court in Amit Enterprises 2011 (5) TMI 375 - PUNJAB & HARYANA HIGH COURT & Era International 2011 (8) TMI 885 - Punjab and Haryana High Court . Therefore, in our opinion, the alternative remedy is not an efficacious remedy to which the petitioner can be relegated to. Decided in favor of assessee.

Summary

Issues involved:
Challenge to seizure/provisional release memos, legality of withholding imported goods, violation of Articles 14 & 19(1)(g), imposition of conditions for provisional release, availability of alternative remedy under Section 110A of the Customs Act, 1962, challenge to conditions of bank guarantee and declaration, exercise of jurisdiction under Articles 226 & 227 of the Constitution of India.

Analysis:

1. Challenge to Seizure/Provisional Release Memos:
The petitioner sought a writ for quashing seizure/provisional release memos and release of imported goods, alleging illegal, arbitrary, and mala fide actions by the respondent authorities. The petitioner imported flat bed/circular knitting machines and faced detention and seizure of machines by the Directorate of Revenue Intelligence. The petitioner contended that the actions of the respondents were violative of Articles 14 & 19(1)(g) of the Constitution of India.

2. Imposition of Conditions for Provisional Release:
The respondents imposed conditions for provisional release of goods, including furnishing a bank guarantee and a declaration not to challenge the identity of goods during adjudication. The petitioner challenged these conditions, arguing that they were unreasonable and arbitrary. The petitioner relied on previous judgments where similar conditions were quashed, emphasizing that such requirements hindered the right to challenge valuations and classifications.

3. Alternative Remedy under Section 110A of the Customs Act:
The respondents contended that the petitioner had an alternative remedy under Section 110A of the Customs Act, which the petitioner had not availed. The respondents highlighted that provisional release had been ordered by the Joint Commissioner, and the petitioner had made deposits towards differential duties. However, the petitioner argued that the conditions imposed for release were unjust and not in line with legal principles.

4. Exercise of Jurisdiction under Articles 226 & 227 of the Constitution:
The Court addressed the issue of whether an appeal to the Commissioner (Appeals) would suffice as an alternative remedy, considering the prolonged detention of goods since 1-7-2011 and the alleged violation of directions issued by the Court in previous cases. The Court held that the alternative remedy was not efficacious in this situation, leading to the exercise of jurisdiction under Articles 226 & 227 of the Constitution of India.

5. Conclusion:
The Court quashed the orders of provisional release imposing certain conditions, directing the respondents to release the goods to the petitioner within two weeks. The Court emphasized that this decision did not impact the merits of the underlying controversy to be adjudicated in accordance with the law. The judgment underscored the importance of upholding legal principles and ensuring fair treatment in matters of customs and import regulations.