2016 (3) TMI 37 - HC - Customs

Provisional release of seized goods- Entitlement of the Petitioner to avail of the benefit under the Status Holders Incentive Scrips (SHIS) in respect of exports made in the year 2011-12 notwithstanding that it has utilized the Zero Duty EPCG authorizations for a subsequent period- Held that the provisional release of the seized goods would be allowed in favour of the Petitioner subject to the Petitioner executing a bond in a sum equal to 100% of the value of the goods and further furnishing security in the form of a bank guarantee for a sum equivalent to 30% of the differential duty, with an auto renewal clause and as per RBI guidelines.

Summary

Issues Involved:
Entitlement to benefit under Status Holders Incentive Scrips (SHIS) for exports made in 2011-12, provisional release of seized goods, maintainability of writ petition, conditions for provisional release, compliance with court orders regarding provisional release.

Entitlement to Benefit under SHIS:
The petitioner sought relief regarding the provisional release of goods seized by the Directorate of Revenue Intelligence (DRI). Although the entitlement to benefit under SHIS for exports made in 2011-12 was an issue, the immediate concern was the provisional release. The conditions imposed for release included payment of differential duty, execution of equivalent value of goods, furnishing a bank guarantee, and an undertaking not to dispute the goods' quantity or weight. The petitioner aimed to address the provisional release issue separately from the main adjudication proceedings.

Maintainability of Writ Petition:
The DRI raised a preliminary objection on the maintainability of the writ petition, stating that the order for provisional release was appealable under the Customs Act, 1962. Reference was made to a previous court decision regarding appeal remedies. The Department of Customs also highlighted the issuance of a Show Cause Notice (SCN) and advised pursuing statutory remedies if aggrieved by the release conditions.

Conditions for Provisional Release:
The court reviewed past decisions regarding provisional release conditions, emphasizing the need for compliance with court orders. Despite previous directives, the respondents continued to impose stringent conditions. The court observed discrepancies in the conditions imposed and decided to modify them. The petitioner was directed to execute a bond equal to 100% of the goods' value and provide a bank guarantee for 30% of the differential duty, following RBI guidelines.

Compliance with Court Orders:
The court noted the respondents' failure to adhere to previous court and Supreme Court orders on provisional release conditions. It expressed dissatisfaction with the repeated need for exporters to approach the court for relaxation of conditions. The modification of conditions aimed to streamline the release process and ensure compliance with established legal precedents.

Conclusion:
The court allowed the provisional release of seized goods subject to revised conditions, emphasizing the importance of following court orders and providing relief to exporters facing stringent release terms. The petitioner's other contentions were reserved for adjudication proceedings, maintaining the parties' rights to raise further arguments. The writ petition and pending application were disposed of with the revised release terms, promoting efficiency and adherence to legal standards.