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2018 (2) TMI 1689 - AT - CustomsProvisional release of vessel - Sagar Fortune - whether condition imposed by the Ld. Commissioner i.e. bank guarantee of 30% of the estimated value is reasonable or harsh? - Held that - bank guarantee should cover entire differential duty, redemption fine and penalties - In the present case, value of the goods estimated by the customs authority is ₹ 41.45 crore, accordingly differential duty amount (after payment of duty on the declared value) come to ₹ 3.62 crores. By taking this differential duty, the total amount as per the guidelines given in para 2.2 of Circular dated 16-8-2017 should be approximately not more than ₹ 10 Crores. Appeal disposed off.
Issues:
Reduction of quantum of security for provisional release of vessel Sagar Fortune under Section 110A of Customs Act, 1962. Analysis: The appeal challenged an Order-in-Original directing the provisional release of the vessel Sagar Fortune subject to conditions imposed by the Commissioner of Customs. The appellant sought a reduction in the quantum of security required, arguing it was excessive and arbitrary. The appellant's counsel contended that the valuation and classification of the vessel were incorrect, advocating for a lower security amount. The Commissioner's condition of a 30% bank guarantee was deemed harsh by the appellant, who cited various judgments to support their case. The Tribunal refrained from delving into the merits of the case regarding valuation and classification, as it was premature at the investigation stage. The central issue revolved around the reasonableness of the 30% bank guarantee mandated by the Commissioner. Referring to board circular No. 35/07-Cus, the Tribunal noted the guidelines for provisional release of seized goods pending adjudication. The circular specified that the bank guarantee should cover the duty, fines, and penalties potentially levied. Considering the guidelines, the Tribunal calculated that a bank guarantee of approximately ?10 Crores would suffice, based on the estimated value of the goods and the differential duty amount. In light of the circular's provisions, the Tribunal determined that the vessel could be provisionally released upon submission of a bond covering 100% of the estimated value and a bank guarantee of ?10 Crores. The appeal was disposed of accordingly, and the early hearing application was also resolved. The judgment was pronounced on 22/02/2018 by the Tribunal.
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