2019 (2) TMI 268 - HC - Customs

Country of origin of imported goods - It is claimed by the petitioner that the goods are of Sri Lankan Origin, whereas it is claimed by the respondent that the goods were only transshipped through Sri Lanka and not of Sri Lankan Origin itself - provisional release of goods - Held that - Admittedly, the matter is still under the investigation stage - Therefore, at this juncture, this Court is not inclined to go into any of the supportive documents relied on by the respective parties and give any finding on those documents, since any such finding will certainly prejudice the investigation. However, this Court has to consider and decide as to whether the conditions imposed for provisional release are to be sustained or not, since the respondent has agreed to release the goods provisionally, subject to the compliance of the impugned conditions. There is no dispute to the fact that if the goods were originated from Sri Lankan country, there will not be any difficulty for the revenue to release those goods without imposing the conditions as stipulated in the impugned order, however by collecting the required duty. But the dispute is regarding the country of origin. The issue with regard to the Country of Origin of goods has to be investigated and an order of adjudication has to be finally passed in this matter. At this juncture, it is to be relevant to be stated that the above said communication dated 06.12.2018, though was not referred to in the counter affidavit filed on 18.01.2019, the file produced before me contained the said letter. In fact, a copy of the said letter is also placed before this Court by the learned senior counsel for the petitioner as well. Petition allowed subject to conditions imposed.

Summary

Issues:
Challenging seizure memorandum and seeking direction for release of consignment, challenge to conditional order for provisional release, dispute over country of origin of imported goods, imposition of conditions for provisional release, validity of conditions imposed, investigation stage of the matter.

Analysis:
1. The petitioners filed writ petitions challenging a seizure memorandum and a conditional order for provisional release of imported goods. The goods in question were Black Pepper and Arecanuts imported from Sri Lanka under the India-Sri Lanka Free Trade Agreement. The Food Safety & Standards Authority of India issued No Objection Certificates for some goods but rejected others. The Directorate of Revenue Intelligence seized the goods, leading to the petitions. The core issue was the Country of Origin of the goods, with the respondent alleging mis-declaration and fraudulent procurement of Certificates of Origin.

2. The petitioner argued that the conditions imposed for provisional release were stringent and unjust, especially when supported by genuine Certificates of Origin. They highlighted a communication from Sri Lankan Customs confirming the goods' origin. The respondent contended that further investigation was needed as the Country of Origin was disputed. The Court noted the ongoing investigation and refrained from making findings that could prejudice it.

3. The Court acknowledged the importance of safeguarding both parties' interests pending investigation. It modified the conditions for provisional release, requiring a bond equal to the seized goods' value and a bank guarantee for 30% of the differential duty. The respondent was directed to release the goods upon compliance. The order was made without prejudice to ongoing investigations and the parties' contentions.

4. The Court's decision in W.P.No.540 of 2019 to modify the conditions rendered further orders unnecessary in related writ petitions. The writ petitions were closed without costs, along with connected miscellaneous petitions. The judgment balanced the need for provisional release with the ongoing investigation into the Country of Origin dispute, ensuring fairness to both parties.