2022 (6) TMI 996 - HC - Customs

Seeking release of seized goods - import of Black Pepper of Sri Lankan origin - seizure on alleged grounds of over valuation to circumvent minimum import price - custom Notification No. 21/2015-2020 dated 25.07.2018 - Section 110A of the Customs Act, 1962 - HELD THAT - The issue has been squarely covered by the judgement in the case of M/S. TRAVANCORE SOLVENTS OILS VERSUS THE COMMISSIONER OF CUSTOMS, THE JOINT COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS (SIIB) , THE SUPERINTENDENT OF CUSTOMS 2022 (1) TMI 817 - MADRAS HIGH COURT where The importer carried the matter in appeal by way of intra-court appeal and a Hon'ble Division Bench in M/S. AL QAHIR INTERNATIONAL VERSUS THE COMMISSIONER OF CUSTOMS, THE DEPUTY DIRECTOR, DIRECTORATE OF REVENUE INTELLIGENCE, TUTICORIN 2021 (12) TMI 1160 - MADRAS HIGH COURT order modified the conditions imposed by learned Single Judge with regard to bank guarantee alone and said bond will suffice. The sequitur is, the prayer in the captioned writ petition deserves to be acceded to by respectfully following the ratio of Hon'ble Division Bench in Al Qahir International case - the second respondent i.e., the Joint Commissioner of Customs is directed to quantify the duty, bond amounts etc., communicate the same to the petitioner forthwith and release the said consignment within one week of said remittance i.e., quantified duty/bond amounts/execution of bonds by the petitioner - It is made clear that nothing contained in this order will stand in the way of an independent inquiry by the authorities in the ongoing investigation. Petition disposed off.

Issues Involved:
1. Import of Black Pepper of Sri Lankan origin.
2. Seizure of consignment on alleged grounds of overvaluation.
3. Provisional release of consignment under Section 110A of the Customs Act, 1962.
4. Allegation of circumventing a customs notification.
5. Previous judicial orders and their applicability.
6. Compliance with Board Circulars and Division Bench orders.
7. Conditions for provisional release.
8. Independent inquiry and adjudication process.
9. Waiver of demurrage charges.

Detailed Analysis:

1. Import of Black Pepper of Sri Lankan Origin:
The petitioner imported 30,120 kilograms of Black Pepper from Sri Lanka and filed a Bill of Entry dated 13.07.2021 for home consumption. The consignment was seized on 26.10.2021 without reasons provided in the seizure memo.

2. Seizure of Consignment on Alleged Grounds of Overvaluation:
The seizure was based on allegations that the invoices were overvalued to circumvent the Minimum Import Price (MIP) of Rs. 500 per kilogram, as imports below this value are prohibited by a DGFT notification dated 25.07.2018.

3. Provisional Release of Consignment under Section 110A of the Customs Act, 1962:
The petitioner sought provisional release of the consignment under Section 110A of the Customs Act, 1962. The Court noted that similar cases had been provisionally released under judicial orders.

4. Allegation of Circumventing a Customs Notification:
The core issue was the allegation that the invoices were overvalued to bypass the MIP restriction. The petitioner argued that this issue had been resolved in previous cases where provisional release was ordered.

5. Previous Judicial Orders and Their Applicability:
The Court referred to several orders, including the Al Qahir International case and M/s. Travancore Solvents & Oils case, where provisional release was directed under similar circumstances. These orders were based on Section 110A of the Customs Act.

6. Compliance with Board Circulars and Division Bench Orders:
The Revenue Counsel cited Board Circulars No.1/2011 and No.35/2017, emphasizing the need for sufficient security. They also referred to Division Bench orders in the G.P.R. Leathers and Unik Traders cases, which were distinguished on facts by the Court.

7. Conditions for Provisional Release:
In the Al Qahir International case, the Single Judge directed the release of goods on execution of a bank guarantee, which was modified by the Division Bench to a bond. The Court followed this precedent, directing the Joint Commissioner of Customs to quantify the duty and bond amounts and release the consignment upon compliance.

8. Independent Inquiry and Adjudication Process:
The Court clarified that the provisional release would not affect the ongoing investigation or adjudication process. The authorities could continue their inquiry and adjudication independently and on merits.

9. Waiver of Demurrage Charges:
The issue of waiver of demurrage charges was left open for the authorities to decide based on applicable rules and regulations.

Conclusion:
The Court ordered the provisional release of the consignment by directing the Joint Commissioner of Customs to quantify the duty and bond amounts and release the goods within one week of compliance. The ongoing investigation and adjudication process were to proceed independently, and the issue of demurrage charges was left to be pursued by the authorities. There was no order as to costs.

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