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2016 (7) TMI 485 - HC - CustomsRequest for Release of consignment of gold jewellery imported by it from Indonesia without being asked to furnish a BG for 100% of the differential duty. - Preferential rate of duty on import of gold jewellery by the members of the said Association from Indonesia - Earlier the Court has quashed a Circular dated 6th October 2015 2016 (4) TMI 1032 - DELHI HIGH COURT - Held that - The impugned order dated 8th June 2016 which requires that in addition to the bond and deposit of 20% of the provisional duty, the Petitioner should either deposit or furnish a BG for 50% of the provisional duty, must itself set out the reasons for such a decision. In other words, the requirement of the law is not satisfied if the reasons are not contained in the order communicated to the Petitioner but in the file notings which are not communicated. The inescapable conclusion is that the impugned order dated 8th June 2016 to the extent of requiring the Petitioner to furnish a BG for 50% of the provisional duty in terms of Regulation 4 of the CPDA Regulations is without reasons and therefore unsustainable in law. Although the Petitioner may be justified in insisting on unconditional release of the goods in question, considering that the Respondents intend filing an appeal against the said judgment and the Petitioner has by way of a demurer agreed to furnish a bond for 100% of the differential duty and deposit 20% of the provisional duty for the provisional release of the goods, the Court considers it appropriate to modify the impugned order dated 8th June 2016 only to the extent of deleting the condition that the Petitioner should additionally deposit or furnish a BG for 50% of the provisional duty. - Decided partly in favor of petitioner.
Issues Involved:
1. Compliance with the High Court's previous judgment. 2. Legality of the Customs' requirement for additional security. 3. Validity of the Customs' order dated 8th June 2016. Detailed Analysis: 1. Compliance with the High Court's Previous Judgment: The petitioner, M/s. J.B. Overseas, filed this writ petition seeking the release of consignments of gold jewellery imported from Indonesia, consistent with a previous judgment by the High Court dated 26th April 2016. The earlier judgment quashed a CBEC Circular dated 6th October 2015 and a consequential order dated 20th January 2016, which required importers to furnish a 100% bank guarantee (BG) for the duty differential for provisional clearance. Despite this, the Customs Department had not released the consignments, prompting the petitioner to seek judicial intervention. 2. Legality of the Customs' Requirement for Additional Security: The Customs Department, in its order dated 8th June 2016, required the petitioner to furnish a bond equivalent to the differential duty, deposit 20% of the provisional duty, and provide a BG for 50% of the provisional duty. The petitioner challenged this requirement, arguing that it was contrary to the CPDA Regulations, which only mandate a bond and a deposit not exceeding 20% of the provisional duty. The court noted that the requirement for additional security under Regulation 4 of the CPDA Regulations must be exercised with valid reasons and not mechanically. 3. Validity of the Customs' Order Dated 8th June 2016: The High Court found that the Customs' order dated 8th June 2016 lacked reasons for requiring the petitioner to furnish a BG for 50% of the provisional duty. The court emphasized that the reasons must be stated in the order communicated to the petitioner, not merely in internal file notings. The court concluded that the impugned order was unsustainable in law due to the absence of stated reasons and lack of legal justification for the additional security requirement. Judgment: The High Court overruled the preliminary objection regarding the appealability of the impugned order, stating that relegating the petitioner to an alternative remedy would further delay the matter and multiply litigation. On merits, the court modified the impugned order by deleting the condition that the petitioner should furnish a BG for 50% of the provisional duty. The court directed that the goods be released upon the petitioner furnishing a PD bond equivalent to 100% of the differential duty and making a deposit or furnishing a BG for 20% of the provisional duty. The writ petition and pending application were disposed of accordingly.
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