2013 (4) TMI 363 - HC - Customs

Non release of the imported goods - Bill of Entry filed by the petitioner for Home Consumption and sought for clearance of the good Neglected by the department as the goods in question were undervalued and seized under the Customs Act Held that - The reason for non-release of goods is that the petitioner has under-valued the goods in question. The respondents, on investigation, found that the differential duty has to be paid even for the provisional release of goods. The investigation has to be completed and thereafter, adjudication has to be done for assessment of the value of the goods in question. In the light of the above the goods in question are not prohibitory items under the provisions of the Customs Act, considering the facts and circumstances of the case and having regard to the foregoing reasons and discussions, provisional release of the goods in question, is ordered subject to the following conditions. The petitioner shall deposit with the customs authorities the duty payable on the value declared by them. The petitioner shall deposit with the customs authorities, 50% of the differential duty i.e., the difference between the value declared by them and the value provisionally assessed by the Department. The investigation is yet to be completed and adjudication is also to be done. Therefore, it is needless to state that this order shall not stand in the way of the respondents to proceed with the investigation and also the adjudication process. With the above observations and directions, the Writ Petition is disposed of.

Summary

Issues:
1. Release of imported goods under Customs Act
2. Valuation of goods for clearance
3. Provisional release of goods pending investigation and adjudication

Issue 1: Release of imported goods under Customs Act

The petitioner sought a direction for the release of 93 Pallets of Tissue Paper imported from China. The petitioner declared the value at USD 10530.84 (CIF), Chennai, claiming it to be the actual price paid. The petitioner argued that similar goods were released for other importers and that the goods were freely importable. The respondents, however, contended that the goods were undervalued, leading to doubts over classification and valuation. They highlighted the petitioner's failure to respond to queries and cooperate in the assessment process. The respondents seized the goods under the Customs Act pending further investigation, refusing the requested release.

Issue 2: Valuation of goods for clearance

The petitioner insisted on the accuracy of the declared value, emphasizing the price paid to the seller and the legitimacy of the transaction. They argued that the goods were unbranded, cheaper, and freely importable. The respondents, on the other hand, pointed out discrepancies in the declared value compared to market prices for similar goods. They stressed the importer's obligation to prove the genuineness of the transaction value and the need for correct valuation and classification before releasing the goods.

Issue 3: Provisional release of goods pending investigation and adjudication

Considering the legal framework, including Customs (Provisional Duty Assessment) Regulations, 2011 and Section 110-A of the Customs Act, the court ordered provisional release of the goods under specific conditions. The court directed the petitioner to deposit the duty payable and 50% of the differential duty, with the remaining 50% secured by a personal bond. The order allowed for the continuation of investigation and adjudication processes, emphasizing the petitioner's cooperation with the authorities. The judgment balanced the petitioner's request for release with the need for proper assessment and compliance with legal procedures.

This detailed analysis of the judgment addresses the issues of release of imported goods, valuation for clearance, and provisional release pending investigation and adjudication under the Customs Act, providing insights into the legal arguments and considerations made by the court in reaching its decision.