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2021 (2) TMI 525 - HC - CustomsValidity of conditions imposed for provisional release of the exportable goods - Scope of the term Exporter - beneficial owner - section 110A of the Customs Act, 1962 - Export of cut and polished diamonds of the petitioners - HELD THAT:- In all the writ petitions challenge have been made to the orders of seizure which will be gone into in due course. However, in the proceedings held on 21st January, 2021 this court took the view that at this stage it would meet the ends of justice if provisional release of the exportable goods of the petitioners are considered. Accordingly, without entering into the merit of the challenge vis-a-vis the impugned orders of seizure and observing that there was no impediment to exercise of power under section 110A of the Customs Act, direction was issued to the Commissioner of Customs to pass orders for provisional release of the exportable goods of the petitioners within seven days. When this court had directed the Commissioner of Customs to pass orders for provisional release and in compliance to such direction the Principal Commissioner of Customs has now passed orders for provisional release of the exportable goods of the petitioners with certain conditions, it would not at all be just and proper to relegate the petitioners to the appellate forum to ventilate their grievance as to the conditions imposed. The goods under consideration are cut and polished diamonds which are freely importable/ exportable. Petitioners are having Importer Exporter Code (IEC) on the basis of which they are carrying on the business of import and export. In the instant case it is a matter of export. The Importer and Exporter Codes of the petitioners have neither been cancelled nor suspended by the competent authority. The basic allegation is that the exporter is not operating its business from the notified address and is existing only on paper. Therefore, under the reasonable belief that the exporter is indulging in “some fraudulent practices” the seizure has been made - Since we are not dealing with the challenge to the seizure memos at this stage, we refrain from making any comment thereon. Reverting back to the conditions imposed in the provisional orders of release dated 2nd February, 2021, we may refer to some of the definitions given in section 2 of the Customs Act. As per section 2(3A) “beneficial owner” has been defined to mean any person on whose behalf the goods are being imported or exported or who exercises effective control over the goods being imported or exported. “Exporter” is defined under section 2(20). As per this definition, exporter in relation to any goods at any time between their entry for export and the time when they are exported includes any owner, beneficial owner or any person holding himself out to be the exporter - it is evident that the definition of “exporter” under the Customs Act is both elastic as well as wide. Exporter would include the owner or a beneficial owner or any person holding himself out to be the exporter. Any person whether the owner, beneficial owner or an agent (including a customs house agent) can seek release of the goods on production of the relevant papers and on payment of the duty - insistence on bank guarantee or revenue deposit equal to the amount declared free on board of the goods plus the probable redemption fine and penalty is not only harsh and oppressive but also amounts to prejudging as to what the adjudicating authority would do upon adjudication. Presupposing that adjudicating authority will impose redemption fine and penalty will amount to taking a view before hand as to what decision the adjudicating authority would render. It goes without saying that an adjudicating authority while adjudicating post seizure of goods exercises quasi-judicial powers. Therefore, there can be no interference, either implicit or explicit, in the exercise of such power by the adjudicating authority. The conditions imposed by the Principal Commissioner of Customs in the orders dated 2nd February, 2021 while ordering provisional release of the exportable goods of the petitioners is modified as follows:- (a) Petitioners shall furnish a bond equal to the free on board value of the goods. (b) Further, petitioners shall furnish bank guarantee to the extent of 20% of the free on board value of the goods. (c) Petitioners shall also furnish an undertaking to the adjudicating authority that they would co-operate in the investigation and in the event of any amount that may be found due relatable to the exports, they would discharge their liability. (d) Petitioners shall not claim any duty drawback or other benefits relatable to the exports till disposal of the writ petitions. Stand over to 22nd March, 2021.
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