2018 (5) TMI 447 - AT - Customs

Provisional Release of detained goods - goods not tallying with the description - Held that - the impugned goods have been subjected to 100% examination, once by the Customs assessing officers on 26.10.2017 and subsequently by the D.R.I on 1.11.2017. However, no discrepancy emerged vis-a-vis declared description and quantity of the items. Further, although in the first instance the Customs assessing officers had no quibbles with the value of ₹ 43,58,498/- declared, the seizure memo dt. 18.12.2017 of DRI, Zonal Unit, Ahmedabad has alleged that value to be misdeclared and that the actual value should be ₹ 1,45,44,653/-. When the enhancement of value has been made by the D.R.I. Ahmedabad, Zonal Unit only on statements and data purported to have been retrieved from a hard disc, surely the final word is not yet out in respect of the valuation of the impugned goods. In such a scenario, we are at loss to understand why the High Court s directions have not been given the respect that they deserve and instead very peremptory orders of provisional release has been issued putting conditions which are onerous and oppressive. Appeal disposed off.

Summary

Issues:
Import of unbranded imitation accessories, detention and seizure of goods, provisional release conditions, legality of bank guarantee requirement, waiver of charges, applicability of case laws.

Analysis:

Issue 1: Import and Detention of Goods
The appellants imported unbranded imitation accessories and garments accessories of Chinese origin, which were subjected to examination twice, with no discrepancies found in quantity and description. Despite this, the goods were detained and seized by the DRI based on an alleged misdeclaration of value. The High Court directed the department to consider the provisional release of goods, leading to subsequent appeals and the current forum.

Issue 2: Provisional Release Conditions
The appellants argued that the Customs authorities should have provisionally assessed and cleared the goods under Section 18 of the Customs Act, 1962, without the need for seizure. They cited various case laws to support their plea for setting aside the onerous conditions imposed by the Customs authorities for provisional release, including the requirement of a bank guarantee for a significant amount.

Issue 3: Legality of Bank Guarantee Requirement
The respondent supported the impugned order, justifying the requirement of a bank guarantee to cover duty, differential duty, fines, and penalties. However, the Tribunal found the conditions imposed to be oppressive and not in line with the ongoing investigations and the directions of the High Court. The Tribunal emphasized the need for a more balanced approach in determining the conditions for provisional release.

Issue 4: Waiver of Charges
The appellants sought waiver of demurrage and detention charges, highlighting that the consignment was detained at the instance of the department. The Tribunal noted that the High Court's direction to consider the waiver was not adhered to by the competent authority, leading to a refusal based on the alleged misdeclaration of value. The Tribunal found this refusal unjustified and ordered the waiver in line with the High Court's observations.

Issue 5: Applicability of Case Laws
The Tribunal extensively analyzed relevant case laws cited by the appellants, such as Nav Shakthi Industries Pvt. Ltd. and Empire Exports, to support their decision. These cases emphasized the need for a more reasonable approach in determining the conditions for provisional release, focusing on paying duty on declared value, depositing a percentage of differential duty, and executing a personal bond for the remaining amount.

In conclusion, the Tribunal set aside the impugned order and directed the provisional release of the goods under specific conditions, including payment of duty on declared value, depositing a percentage of differential duty, and executing a personal bond. The Tribunal emphasized the importance of following a fair and balanced approach in such cases, considering ongoing investigations and legal precedents to ensure just outcomes.