2015 (12) TMI 929 - HC - Customs

Detention of goods - Provisional release of goods - Held that - Show cause notice has been issued to the petitioner inter alia requiring the petitioner to show cause as to why the amount of ₹ 35,00,000/- deposited voluntarily during investigation should not be appropriated against the demand raised in the said show casue notice. This means that till there is an adjudication consequent upon the said show cause notice, the said sum of ₹ 35,00,000/- cannot be appropriated against the said demand. In other words, the said sum of ₹ 35,00,000/- is available to the petitioner for adjustment towards the differential duty which has been required to be deposited by virtue of the provisional release order dated 29.04.2015 - sum of ₹ 35,00,000/-, which was voluntarily deposited by the petitioner, ought to be adjusted against the estimated differential duty of ₹ 33,87,526/-, which has been indicated in the provisional release order. The respondents are directed to release the said goods within ten days subject to the other conditions being complied with. - Decided in favour of assessee.

Summary

Issues:
1. Detention of goods despite compliance with provisional release conditions.

Analysis:
The petitioner filed for provisional release of goods detained at various godowns, which was granted subject to specific conditions including payment of estimated differential duty, execution of a bond, furnishing a bank guarantee, and providing an undertaking regarding the goods. The petitioner had voluntarily deposited a sum towards the differential duty during the investigation. The Customs Department contended that the full estimated duty amount was yet to be paid, as the deposited sum was considered for past clearances. A show cause notice was issued demanding a higher duty amount and seeking appropriation of the deposited sum. The court disagreed with the Customs Department's stance, stating that until adjudication post the show cause notice, the deposited sum could not be appropriated. Therefore, the court held that the deposited sum should be adjusted against the estimated duty mentioned in the provisional release order, directing the release of goods within ten days, provided all other conditions were met.

In conclusion, the court allowed the writ petition to the extent that the deposited sum should be adjusted against the estimated differential duty, leading to the release of goods.