2021 (7) TMI 1157 - HC - Customs

Provisional release of imported goods - Return of bank guarantees - Areca nuts - proper officer in terms of Section 45(1) of Customs Act - country of origin certificate - HELD THAT - Section 45 of the Act provides all goods imported into India and unloaded in customs area shall remain in the custody of such person as may be approved by the Principal Commissioner of Customs or Commissioner of Customs unless they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII of the Act. On the other hand, Section 100 deals with seizure of goods on a reasonable belief that the goods are liable to confiscation under the Act. In the present case the customs authorities had not seized the goods on such reasonable belief that they are liable to confiscation. On the other hand, the goods had been kept in custody in exercise of powers under Section 45 of the Act, pending its clearance - no case of unconditional release of the goods in the factual matrix with reference to sub-section (2) of Section 110 of the Act is made out. The provisional clearance of the goods is pending consideration for over 2 and years purportedly on the ground of verification of genuineness of the certificate with regard to country of origin. The scheme of the Act does not permit the customs authorities to undertake such an exercise for an indefinite period of time. Hence, the customs authorities cannot be permitted to continue such exercise indefinitely and keep the petitioner bound to the sureties furnished by them - Petition disposed off.

Summary

Issues:
1. Return of bank guarantees furnished by the petitioner.
2. Seizure of goods under the Customs Act, 1962.
3. Interpretation of Sections 45 and 110 of the Customs Act.

Analysis:
1. The petitioner sought the return of bank guarantees furnished for the provisional release of imported goods. The petitioner imported Areca nuts and furnished bank guarantees as per court directions. The petitioner argued that as no show-cause notice was issued within six months of seizure, the goods should be unconditionally released, and the bank guarantees returned. The customs authorities contended that the goods were not seized but kept in custody for verification. The court noted that the goods were not seized under Section 110 but were kept pending verification, directing the customs authorities to conclude the assessment within six months, failing which the bank guarantees should be returned.

2. The court analyzed Sections 45 and 110 of the Customs Act. Section 45 mandates imported goods to remain in custody until cleared, while Section 110 deals with the seizure of goods liable for confiscation. The court determined that the goods were not seized under Section 110 but were held in custody for clearance. Even if the goods were considered seized, the court held that the situation was akin to Section 110A, preventing unconditional release. The court emphasized that the customs authorities cannot indefinitely delay the assessment, directing them to conclude the process within six months or return the bank guarantees.

3. The judgment highlighted the distinction between custody under Section 45 and seizure under Section 110 of the Act. It clarified that the goods were not seized but held for verification, precluding unconditional release. The court balanced the interests of the petitioner and customs authorities, setting a deadline for assessment completion. The judgment underscored the importance of timely resolution under the Act, ensuring fairness to all parties involved. The court's decision aimed to uphold the law while safeguarding the rights of the petitioner in the importation process.