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2022 (3) TMI 952 - AT - CustomsProvisional release of seized goods - opportunity of hearing not provided to the appellants - violation of the principle of natural justice - reliance placed on CBIC Circular No 35/2017 dated 16.08.2017 for rejecting the request made by the appellants - HELD THAT:- From the reading of the communication dated 12.11.2021 and the referred circular, it is quite evident that ADG, has even while considering the request made by the appellant for the provisional release has concluded that the goods need to be absolutely confiscated, as the same are in his view covered by the definition of “prohibited goods” as per Section 2(33) of the Customs Act, 1962. Arriving at such a finding even without hearing the appellant is not only flagrant violation of the principle of natural justice but also suffers from the vice of reasonableness to be exercised by the administrative/ adjudicating authorities while exercising the discretion vested in them. In both the decisions which are backbone of the Board Circular, MALABAR DIAMOND GALLERY PVT. LTD. VERSUS THE ADDITIONAL DIRECTOR GENERAL DIRECTORATE OF REVENUE INTELLIGENCE, THE COMMISSIONER OF CUSTOMS (IMPORT) , THE COMMISSIONER OF CUSTOMS (AIR) [2016 (8) TMI 530 - MADRAS HIGH COURT] and MALA PETROCHEMICALS & POLYMERS VERSUS THE ADDITIONAL DIRECTOR GENERAL, DIRECTORATE OF REVENUE INTELLIGENCE & ANR. [2017 (5) TMI 1234 - DELHI HIGH COURT], it is found that both Hon’ble Madras High Court and Hon’ble Delhi High Court have cautioned that the discretion vested in terms of the Section 110A needs to be tested against the test of relevance and reasonableness. In the communication dated 12.11.2021, in para 2, ADG observes that some of the seized goods in the same proceedings for the same violations have been disposed of by the jurisdictional officers even prior to adjudication, and in para 3.4 observes that these goods would pose threat to safety and security of the power industry within the country. He also ignores the fact that Show Cause Notice dated 20.08.2019, which proposes the confiscation of these good under Section 111(d), (l) & (m) of Customs Act, 1962, also demand the differential duty in respect of the past clearance of 213 consignments of the same goods. The order/ communication dated 12.11.2021 of the Additional Director General (Adjudication) DRI Mumbai cannot be sustained and the same is set aside. Matter remanded back to the original authority for consideration of the request for provisional release considering the test reports, policy provisions and other submissions made by the appellant - Appeal allowed by way of remand.
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