2019 (12) TMI 1070 - AT - Customs

Provisional release of seized goods - consignment of defatted coconut powder - release of the consignment for their appropriate classification - It is the contention of the Appellant that the said goods is appropriately classified under Customs Tariff Item 2306 50 90 against the Department claim under Customs Tariff Heading 0801 1100 - HELD THAT - The Department has drawn the samples and obtained the test report for the live consignment vide Bill of Entry No. 39 59 788 dated 06.07.2019. Further, the same has not been made available to the Appellant. Regarding the test report of other consignment the same has not been mentioned in the provisional release of the order. The Appellant is agreed upon, that the conditions set forth for the provisional release is very harsh and not in conformity with the findings of the various case laws - The Appellant has already deposited a sum of ₹ 40 Lakhs with the Department, which should be sufficient for the provisional release of the seized goods The seized goods released - appeal allowed - decided in favor of appellant.

Summary

Issues:
Provisional release of seized goods under Section 110A of Customs Act, 1962; Appropriate classification of imported goods; Compliance with conditions for provisional release; Interpretation of relevant case laws and CBEC Circulars.

Analysis:
The appeal sought to challenge the order setting conditions for the provisional release of seized goods under Section 110A of the Customs Act, 1962. The importer was required to execute a bond, furnish a bank guarantee for differential duty, cover possible fines, and ensure compliance with relevant standards. The imported goods, initially declared as defatted coconut powder, were suspected to be misdeclared as desiccated coconut, leading to a higher duty rate. Samples were drawn for testing, and subsequent search operations revealed additional seized items. The proprietor admitted misclassification with intent to evade duty, making partial payments. The CRCL test reported a high fat content in the goods under dispute, while the previous consignment's report was not provided.

The main issue revolved around the provisional release of the seized goods and their correct classification. The appellant argued for less stringent conditions citing unavailability of the CRCL report, different suppliers for the consignments, and misclassification not being finalized. Reference was made to case laws like Navshakti Industries and CBEC Circulars. The appellant had already deposited a substantial amount, urging for immediate release after being seized for a considerable period. The authorized representative supported the order based on CBEC Circulars, stating compliance.

Upon considering the submissions and case records, the tribunal addressed the issue of provisional release and appropriate classification. The appellant's classification claim was supported due to unavailability of the CRCL report and lack of mention of other consignment reports. Citing precedents like M/s Agya Import Limited, the tribunal found the set conditions harsh and not aligned with established case laws. Given the substantial deposit made by the appellant, the tribunal directed the immediate release of the seized goods while keeping other conditions intact.

In conclusion, the tribunal ruled in favor of the appellant, directing the immediate release of the seized goods based on the classification dispute and the substantial deposit already made, deeming it sufficient for provisional release. The decision highlighted the importance of aligning conditions with legal precedents and ensuring fairness in provisional release procedures.