2025 (6) TMI 1854 - HC - Customs

Requirement to issue certain directions for the provisional release of the goods - applicability of Sr. No. 5(b) of paragraph 3 in C.B.E. C. s Circular No. 38/2016 dated 22 August 2016 - HELD THAT - The controversy as to whether the case of the Petitioner falls under Sr. No. 5(b) or whether it is governed by other sub-clauses of Sr. No. 5 would involve adjudication into factual issues. As it stands a show cause notice is already issued to the Petitioner. In the interest of justice and by balancing the interest of the Petitioner as well as the Revenue we direct the provisional release of the Petitioner s goods held under Bill of Entries Nos. 7974563 dated 21 January 2025 and 8268069 dated 10 February 2025 within seven days of the Petitioner furnishing a bank guarantee from a Nationalised Bank in the amount of Rs. 50 lakhs. Petition disposed off.

Summary

The Bombay High Court, in a petition involving provisional release of goods under the Customs Act, 1962, addressed the issuance of a show cause notice dated 21 June 2025 under Section 124. The Court granted liberty to the Petitioners to respond to the notice and raise all contentions, including those in the petition. Regarding provisional release, the Court noted a controversy over the applicability of Sr. No. 5(b) of C.B.E. & C.'s Circular No. 38/2016, which requires securing 100% duty by bank guarantee or cash deposit. Since adjudication of this issue involves factual determination, the Court balanced interests and directed provisional release of goods covered under Bill of Entries Nos. 7974563 and 8268069 within seven days, contingent upon the Petitioners furnishing a bank guarantee of Rs. 50 lakhs from a Nationalised Bank. This amount was based on the approximate value of goods (Rs. 8.69 crores) and a duty rate of 6% if Indo-ASEAN Treaty provisions are not applied.The Court kept all contentions open for consideration during disposal of the show cause notice, which it ordered to be decided within eight weeks from the Petitioners' response. It also allowed Petitioners to apply for waiver of demurrage charges, subject to legal disposal by Respondents. The petition was disposed accordingly.