2019 (3) TMI 255 - AT - Customs

Provisional release of seized goods for the purpose of re-export - Mis-declaration of imported goods - it is alleged that that the goods imported is not a base oil but it is in the nature of high speed diesel oil (HSD) - Held that - The investigating agency DRI has already drawn the sample of the goods to ascertain the nature of the goods. In such situation, the department has no need of the goods for the purpose of adjudication. By keeping the goods under seizure it is nobody s gain. The discretion for provisional release of the goods is legally provided under Section 110 of Customs Act and the same should be exercised lawfully and of course with safeguard of the Revenue s interest. In the present case the sample were already drawn, thereafter, the goods are not required for adjudication. As regard the safeguard of the revenue, the adjudicating authority can impose the condition of bond and bank guarantee as deems fit in accordance with law - In the present case the appellant s prayer is for provisional release for re-export of the goods and not for home consumption. There is no reason why the re-export of the goods can be denied particularly when the same is not going to adversely affect the adjudication process of the case. The provisional release of the goods for re-export can be allowed subject to the reasonable measures for safeguarding the Revenue - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Provisional release of seized goods for re-export
2. Interpretation of Section 110 of Customs Act
3. Application of Larger Bench judgment in A.K. Jewellers case
4. Relevance of Board Circular No. 35/2017-Cus
5. Safeguarding Revenue's interest in provisional release

Analysis:
The appeal was filed against the decision of the Ld. Commissioner of Customs, Kandla, which denied provisional release of seized goods, suspected to be high speed diesel oil instead of base oil. The appellant sought provisional release for re-export, arguing that keeping the goods under seizure was unnecessary and causing heavy demurrage costs. The appellant's counsel referred to a Larger Bench judgment and a Board Circular to support the claim for release, emphasizing that the goods were already tested, and re-export would not hinder adjudication. The Revenue, represented by the Joint Commissioner, supported the impugned order.

Upon reviewing the arguments, the Tribunal found that the appellant's request was solely for provisional release for re-export, not for home consumption. The Tribunal emphasized the legal provision for provisional release under Section 110 of the Customs Act and the need to balance Revenue's interest. The Tribunal noted that the investigating agency had already tested the goods, making their continued seizure unnecessary for adjudication purposes. The Tribunal disagreed with the adjudicating authority's heavy reliance on the A.K. Jewellers case, as it did not prohibit provisional release. Similarly, the Tribunal found that the Board Circular was based on a judgment that did not categorically bar provisional release, emphasizing that courts should only review the authority's discretion in such matters.

Ultimately, the Tribunal set aside the impugned order, allowing the appeal and directing the provisional release of goods for re-export within a month due to the appellant's substantial demurrage costs. The decision highlighted the need to exercise the discretion for provisional release lawfully, with appropriate safeguards for Revenue's interests, and rejected the notion that goods cannot be released provisionally before adjudication. The judgment emphasized the importance of balancing procedural requirements with practical considerations, such as the unnecessary financial burden on the appellant due to continued seizure.