2012 (4) TMI 257 - HC - Customs

Release of goods petition to direct respondents to accept the contracted price, declared in the relevant B/E, as the transaction value, as per Section 14(1) of the Customs Act, 1962, read with Rule 4 of the Customs Valuation Rules differential duty payable is ₹ 8.81 lacs - Held that - Court finds it appropriate to release the goods in question relating to relevant B/Es, subject to the petitioner executing a bond for a sum of ₹ 48,54,000/ and furnishing a bank guarantee for ₹ 5,00,000/-. It is open to the respondents to pass final orders, based on the investigation, and adjudication process.

Summary

Issues Involved:
Customs Valuation Rules interpretation, Differential duty payment, Release conditions for imported goods, Arbitrary conditions imposition.

Customs Valuation Rules Interpretation:
The petitioner, a regular importer of Belt Buckles, bags fittings, and Buttons from China, entered into a sale contract with a Chinese company. The consignments reached Chennai Port, and the petitioner filed Bills of Entry for assessment and clearance. The petitioner agreed to pay customs duty as per the declared value in the Bills of Entry. However, the second respondent did not value the goods as per the Customs Act, causing the petitioner to incur losses due to detention and demurrage charges. The petitioner sought direction to accept the contracted price as the transaction value under Section 14(1) of the Customs Act, 1962, and Rule 4 of the Customs Valuation Rules.

Differential Duty Payment:
During the hearing, it was revealed that the duty payable by the petitioner for the imported goods was significantly higher than the duty paid. The petitioner had already paid a portion of the duty but was liable for a differential amount. The court noted the discrepancy and calculated the differential duty payable by the petitioner for each Bill of Entry, directing the petitioner to pay the remaining amount to facilitate the release of the goods.

Release Conditions for Imported Goods:
The Deputy Commissioner of Customs issued a communication imposing conditions for the provisional release of the imported goods, including executing bonds and furnishing a bank guarantee. The petitioner argued that these conditions were onerous and lacked a valid basis, requesting the court to set them aside. The court considered the petitioner's submissions and directed the release of the goods upon payment of the specified duties and compliance with the set conditions.

Arbitrary Conditions Imposition:
The petitioner contended that the conditions prescribed by the Deputy Commissioner of Customs were arbitrary and illegal. The court, after evaluating the arguments presented, found merit in the petitioner's claims and ordered the release of the goods upon payment of the outstanding duties and fulfillment of the specified conditions. The court emphasized the need for cooperation from the petitioner in the ongoing investigation and adjudication processes by the customs authorities. Ultimately, the writ petitions were allowed, and the connected motions were closed without costs.