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2019 (3) TMI 719 - HC - CustomsProvisional release of goods - genuineness of the certificates of origin produced by the petitioner - Held that - The power under Section 110A of the Customs Act is a discretionary power vested with the adjudicating authority. The petitioner approached this Court challenging the seizure mahazar contending that the same is illegal. In the said Writ Petition, interim direction was issued by giving liberty to the petitioner to approach the authorities under Section 110A of the Act requesting for provisional release of the goods. In terms of Section 110A of the Act, any goods/documents/things seized under Section 110A, may, pending the order of the adjudicating authority be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. The scope of judicial review on the exercise of such discretionary power is undoubtedly limited. This Court, in several decisions, have granted orders directing provisional release of the cargo subject to certain conditions. However, there can be no universal rule as to what would be the appropriate directions to be issued while granting provisional release bearing in mind the interest of the stake holders, namely, the importer/exporter and the revenue. Therefore, we have to examine each case on its own merits and come to a correct conclusion - In the instant case, the task of establishing that the petitioner is entitled to clearance of the goods on furnishing of a simple bond is an uphill task. This is so because the petitioner claims the benefit of an exemption notification, whereby the benefit of treaties entered into between the Government of Sri Lanka and the Government of India is pressed into service. If such benefit is extended to the petitioner, then the petitioner would be entitled to clear the goods at concessional/NIL rate of duty. In the case on hand, the petitioner has produced certificates of origin stating that the goods imported are of Sri Lankan origin. However, investigation has commenced on the authenticity of the certificates of origin not at the instance of the DRI or the Customs Department, Chennai, but at the instance of Revenue Intelligence Unit in Sri Lanka. As explained by the Deputy Director, DRI in the affidavit dated 12.02.2019, the communications, which was sent by DRI were only addressed to the competent officer/nodal officer, as notified by the Sri Lankan Authorities. These communications are letters dated 31.10.2018 30.11.2018. However, a reply was sent by the Director of Export, Sri Lankan Customs, dated 06.12.2018 referring to letters of the DRI, dated 31.10.2018 30.11.2018, addressed to the Nodal Officer in Sri Lanka. This according to the DRI is a suo motu communication by the Director of Export, Sri Lankan Customs and it is not in response to a communication sent by DRI to Sri Lankan Customs. It is interesting to note that in the letter dated 06.12.2018, the Director of Exports, Sri Lankan Customs states that the word transshipment used in the earlier e-mail was in inadvertent error - Thus, it is prima facie clear that there has been a communication from the Nodal officer at Sri Lanka that the containers were transshipped and the goods are not of Sri Lankan origin. However, another authority namely, the Director of Export states that this is an inadvertent error. The correctness of the respective stand cannot be tested by us in a Writ proceedings and it is for the investigating authorities to take forward the matter. With regard to the plea raised by the petitioner that they are not in a position to produce the export document from their Sri Lankan Exporter stating that they are not parties to the document is a stand which is not convincing. Admittedly, the transaction runs to several crores of rupees and any prudent businessman, if he is of the firm view that the actions done by him are genuine, he will leave no stone unturned to vindicate his cause. The conditions imposed in the order of the provisional release dated 01.01.2019, under Section 110A does not call for any interference - the petitioner has not been able to make out case of any procedural irregularity or any perversity in the decision. Thus, the condition imposed is not liable to be interfered. Appeal disposed off.
Issues Involved:
1. Legality of the seizure memorandum dated 01.12.2018 issued by the Directorate of Revenue Intelligence (DRI). 2. Conditions imposed for the provisional release of goods as per the order dated 01.01.2019. 3. Issuance of detention certificate for waiver of demurrage and container detention charges. 4. Challenge to the seizure memorandum in a writ proceeding. Issue-wise Detailed Analysis: 1. Legality of the Seizure Memorandum: The petitioner challenged the seizure memorandum dated 01.12.2018 issued by the DRI, questioning its legality. The Court held that a seizure memorandum is a document drawn to justify the seizure of goods and is not subject to challenge in a writ proceeding. Therefore, the challenge to the seizure memorandum was dismissed. 2. Conditions Imposed for Provisional Release of Goods: The petitioner sought the provisional release of imported goods detained by the DRI, claiming they were of Sri Lankan origin and covered by certificates of origin under the ISFTA/SAFTA agreements. The Customs Department imposed conditions for provisional release, including furnishing a bond equal to the value of the seized goods, a bank guarantee/security deposit to cover the entire amount of differential duty, and a bank guarantee/security deposit in lieu of fine and penalty amounting to 25% of the differential duty. The Court examined the discretion exercised under Section 110A of the Customs Act and found that the conditions imposed by the Customs Authorities in the order dated 01.01.2019 were appropriate to safeguard the interests of revenue. The Court noted that the petitioner had not established entitlement to the benefit of the exemption notification and that the matter was still under investigation. Therefore, the conditions imposed for provisional release were upheld, and the petitioner's request for modification of these conditions was dismissed. 3. Issuance of Detention Certificate for Waiver of Demurrage and Container Detention Charges: The Court found that the petitioner was entitled to a detention certificate for waiver of demurrage and container detention charges because the consignment had been detained at the instance of the DRI for investigation. The competent authority was directed to issue the detention certificate upon the petitioner complying with the conditions in the provisional clearance order dated 01.01.2019. 4. Challenge to the Seizure Memorandum in a Writ Proceeding: The Court reiterated that the seizure memorandum, being a document justifying the seizure of goods, cannot be challenged in a writ proceeding. The challenge to the seizure memorandum was therefore dismissed. Conclusion: The Court allowed W.A.Nos.329 & 355 of 2019 (filed by the DRI and the Customs Department), dismissed W.A.No.240 of 2019 (filed by the petitioner challenging the conditions for provisional release), and dismissed W.A.Nos.236 & 237 of 2019 (filed by the petitioner challenging the seizure memorandum), except for the direction to issue a detention certificate for waiver of demurrage and container detention charges subject to compliance with the provisional release conditions.
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