2021 (1) TMI 940 - HC - Customs

Seizure of export goods - overvaluation in exports - fraudulent availment of duty drawback and other export incentives by some exporters including the applicant - HELD THAT - Even the applicant had conceded that if necessary it would furnish bank guarantee to the extent of 20% of the duty drawback amount which would accrue on export of the goods - That being the position we modify the provisional release order dated 31.12.2020 by directing the respondents to release the goods of the applicant for export subject to submission of bond equivalent to declared value of goods and submission of bank guarantee to the extent of 20% of the duty drawback payable. On such compliance respondents to release the goods of the applicant forthwith within 48 hours from the date of furnishing such bond and bank guarantee. Regarding seizure of computers etc. we find that those were seized on 07.12.2020 and continues to be retained by the respondents. Respondents are therefore directed to release the electronic goods seized from the residential and business premises of the applicant vide panchanama dated 07.12.2020 immediately after making clone copies therefrom. Application disposed off.

Summary

Issues Involved:
1. Seizure of export consignments.
2. Provisional release of seized goods.
3. Compliance with court orders.
4. Seizure of electronic goods.

Detailed Analysis:

1. Seizure of Export Consignments:
The court noted that the petitioners, manufacturers and exporters of silk fabrics and carpets, had their export consignments held up by officials of respondent No.2. The court acknowledged that the goods were not prohibited and referred to a circular from the Central Board of Excise and Customs which stated that there should be no justification to hold up export consignments for long periods unless the goods are prohibited under the Customs Act, 1962. Despite this, the Directorate of Revenue Intelligence issued a seizure memorandum on 28.12.2020, alleging overvaluation in exports and fraudulent availment of duty drawback and other export incentives.

2. Provisional Release of Seized Goods:
The applicant sought provisional release of the seized goods, and a personal hearing was held on 30.12.2020. An order dated 31.12.2020 provisionally released the goods under section 110A of the Customs Act, 1962, subject to the submission of a bond equal to the declared value of the goods (?4.8 crores) and a bank guarantee equal to 20% of the declared value (?96 lakhs). The applicant contested the conditions, arguing that the seizure violated the court's order dated 22.12.2020 and that the conditions were oppressive and unreasonable.

3. Compliance with Court Orders:
The court had previously directed respondent No.3 to decide on allowing the export of the goods within seven days from the receipt of the order. However, the seizure was made on 28.12.2020, at the end of this period, which the court viewed as an attempt to overreach its order. The court emphasized that administrative authorities should not initiate parallel proceedings on the same subject matter when the court is in session, as it could interfere with the administration of justice.

4. Seizure of Electronic Goods:
The applicant also raised concerns about the seizure of computers and other electronic goods, which were essential for processing export papers. The court directed the respondents to release the electronic goods immediately after making clone copies.

Court's Decision:
The court modified the provisional release order, directing the respondents to release the goods for export subject to the submission of a bond equivalent to the declared value of the goods and a bank guarantee to the extent of 20% of the duty drawback payable. The respondents were instructed to release the goods within 48 hours of compliance. Additionally, the court ordered the release of the seized electronic goods immediately after cloning.

Conclusion:
The court addressed the issues of seizure and provisional release of export consignments, emphasizing the need for compliance with its orders and the unreasonableness of the conditions imposed for provisional release. The judgment highlighted the importance of adhering to legal procedures and protecting the interests of exporters while ensuring that administrative actions do not interfere with judicial processes.