2025 (7) TMI 1021 - HC - Customs

Challenge to reassessment order - import of wheat flour sheets dough for spring rolls pastry - exemption under N/N. 41/2019 - to be classified under Custom Tariff Heading No.1901 2000 - HELD THAT - Since the goods under consideration are perishable and the petitioner is willing to secure the duty amount no purpose would be served by detaining the goods more so these goods are not prohibited goods. The Board has issued a Circular dated 16 August 2017 laying down the parameters to be considered for release of the goods on provisional basis. Keep in mind the objective of the said Circular dated 16 August 2017 the respondents are directed to release the goods on the petitioner making payment of 50% of the duty demanded and giving bank guarantee for the balance 50%. The bank guarantee should be given of a nationalised bank. The respondents are directed to release the goods within one week of the petitioner depositing 50% of the duty demand and giving the bank guarantee for balance - petition disposed off.

Summary

ISSUES:

• Whether the reassessment order denying exemption under Notification No. 41/2019 and reclassifying imported goods under a different Custom Tariff Heading is valid.
• Whether the seizure memo relating to imported goods is illegal and liable to be quashed.
• Whether the collection of ground rent, detention, and demurrage charges can be restrained or waived.
• Whether perishable goods detained can be released pending appeal upon securing the duty demand.

RULINGS / HOLDINGS:

• On the reassessment order, the Court did not decide the validity but acknowledged the petitioner's right to challenge the order in appeal, emphasizing "the petitioner is willing to secure the duty."
• Regarding the seizure memo, the Court declined to adjudicate the issue, granting liberty to raise it in regular proceedings under the Act.
• On ground rent/detention and demurrage charges, the Court directed that if a representation for waiver is made, the respondents shall consider and decide it within two weeks, thus not restraining collection outright but ensuring due process.
• Concerning release of perishable goods, the Court directed release upon payment of 50% of the reassessed duty and furnishing a bank guarantee for the balance 50%, referencing the Board Circular dated 16 August 2017 and noting "no purpose would be served by detaining the goods."

RATIONALE:

• The Court relied on the statutory framework governing customs duty reassessment and appeals, as well as the administrative guidelines issued by the Board in its Circular dated 16 August 2017, which lays down parameters for provisional release of goods.
• The Court recognized the perishable nature of the goods and the absence of prohibition on their import, justifying provisional release to avoid undue hardship.
• The Court adopted a balanced approach by allowing provisional release conditioned on securing the duty demand through partial payment and bank guarantee from a nationalised bank, ensuring revenue protection.
• The refusal to decide on the seizure memo and ground rent waiver issues reflects judicial restraint, directing the petitioner to pursue remedies through statutory channels and representations to the appropriate authorities.