2021 (8) TMI 548 - HC - Customs

Seeking permission to shutout the cargo / taking back the cargo to their premises - seeking release of goods comprising of Readymade Garments presented for the export without insisting for execution of Bank Guarantee for 25% of the value - HELD THAT - Admittedly, now the petitioner is not in a position to export the goods due to cancellation of the export order. The goods are berthed in Tuticorin Port and kept idle and because of that, the demurrage and container charges has been mounting heavily. Since the export order has been cancelled, the petitioner wants to take back the cargo to their premises, but the 3rd respondent insisting the petitioner for bank guarantee for 25% of the value as security for provisional release of the goods. In the considered opinion of this Court, the question of providing bank guarantee does not arise, when the petitioner take back the goods, due to cancellation of the export order. The respondents are directed to permit the petitioner to take back the cargo to their premises, comprising of Readymade Garments presented for the export, without insisting Bank Guarantee, forthwith - Petition disposed off.

Summary

Issues:
Challenge to impugned order for cargo clearance and bank guarantee requirement.

Analysis:
The petitioner, engaged in exporting Readymade Garments, faced detention of goods by Customs Officers despite submitting required documents. The petitioner sought clearance due to heavy demurrage charges, but the goods were seized on suspicion of being substandard. Subsequently, the petitioner requested to take back the goods upon cancellation of export orders, but the 3rd respondent demanded a bank guarantee for 25% of the value for provisional release. The petitioner contended that such a requirement was contrary to Customs Act provisions allowing for provisional release without bank guarantee in such circumstances.

The Court considered the situation where the petitioner could no longer export the goods and desired to retrieve them due to order cancellation, leading to mounting demurrage charges. The Court opined that the demand for a bank guarantee was unnecessary in this scenario, as the goods were to be returned to the petitioner's premises. Consequently, the Court quashed the communication requiring the bank guarantee and directed the respondents to allow the petitioner to take back the cargo without insisting on a bank guarantee for provisional release.

Therefore, the Court disposed of the Writ Petitions, emphasizing that no costs were to be incurred, and closed the connected miscellaneous petitions.