2016 (8) TMI 970 - HC - Customs

Provisional Release of consignment export of consumer items duty drawback ownership - An intelligence was received, on the basis of which the second respondent suspected that narcotic drugs are concealed and being exported under this consignment of jewellery and footwear. The consignment, therefore, was held up, opened up for examination once again Held that - The respondents possess necessary and requisite power in law to probe and investigate even the past transactions and recover such amounts as are permissible in law. We express no opinion also on the outcome of the ongoing investigation. If the petitioner is able to satisfy the authorities with regard to his claim, as narrated and referred above, and complies with all the circulars, so also the requirement of furnishing a bond with such security and conditions, upon this, we have no doubt, that the Competent Authority would take appropriate steps and provisionally release the goods. Needless to state that neither such provisional release would confer or create any right in favour of the petitioner nor such an exercise at this stage affects or prejudices the rights and contentions of the respondents. petition disposed off provisional release may be granted if all requirements are complied with.

Summary

Issues:
Petitioner seeking release of consignment for export under Article 226 of the Constitution of India.

Analysis:
1. The petitioner, a proprietor of an export business, sought relief for the release of a consignment meant for export. The petitioner engaged in exporting consumer items by sourcing goods through intermediaries and establishing contact with foreign buyers. The petitioner followed the required procedures for exporting goods, including obtaining necessary permits and clearances.

2. An intelligence report led to suspicions of narcotic drugs being concealed in a consignment of jewellery and footwear meant for export. The consignment was held up, examined, and the petitioner was called to appear before the authorities. The petitioner argued that the continued holding of the consignment caused inconvenience to both the petitioner and the buyer.

3. The court noted the tendency of authorities to file detailed affidavits, which could potentially reveal the department's case prematurely and alert wrongdoers. The court emphasized the importance of timely investigations to prevent parties from changing their positions or losing crucial evidence. The court highlighted the need for prompt adjudication proceedings or the release of export consignments without unnecessary delays.

4. The respondents contended that the goods could be released if the petitioner established ownership and executed a bond as required by the Adjudicating Authority. The petitioner claimed to be the exporter of the goods, even though he did not own them, based on trade arrangements with suppliers and sharing profits. The petitioner provided evidence of bank transactions related to export realizations.

5. The court refrained from expressing an opinion on the ownership issue raised by the respondents. It directed that if an application for provisional release of the goods was made, the Competent Authority should examine it in accordance with relevant policies, circulars, rules, and regulations within four weeks. The provisional release would not confer any rights on the petitioner or prejudice the respondents' rights.

In conclusion, the judgment addressed the petitioner's request for the release of a consignment for export, considering issues related to ownership, investigation procedures, and the need for timely actions by the authorities. The court emphasized the importance of following legal procedures and conducting investigations efficiently to prevent delays and preserve evidence.