TMI Blog2016 (6) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... merely because a request has been made for provisional release of goods under Section 110-A of the Customs Act and the same has been acceded to by the respondent, the same would not take away the right of the petitioner for unconditional release of the goods under Section 110(2) of the Customs Act. The right under Section 110(2) of the Customs Act is absolute and cannot be curtailed or prevented by the Department. That apart, the Circular issued by the Ministry of Finance dated 19.02.2013 also supports the case of the petitioner. Hence, the petitioner is entitled to get release of the goods unconditionally. - Decided in favour of petitioner - W. P. No. 34581 of 2015, M. P. No. 1 of 2015, W. M. P. No. 8734 of 2016 - - - Dated:- 2-6-2016 - M. Duraiswamy, J. For the Petitioner : Dr. S. Krishnanandh For the Respondents : Mr. A. P. Srinivas ORDER The above Writ Petition has been filed by the petitioner to issue a writ of mandamus directing the respondents to release the imported goods viz., LED Spare Parts for lighting fixtures, Spare Parts for lighting fixtures and Capacitor for lighting fixtures covered under the Bill of Entry dated 15.04.2015 in terms of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods in terms of Section 110-A of the Customs Act subject to the conditions that they should execute a bond for the full value of the goods (i.e.) ₹ 96,12,271/- and on execution of the Bank Guarantee for ₹ 28,61,358/- (i.e.) 110% of the estimated duty evasion amount. 4. According to the petitioner, the value of the impugned goods could never be ₹ 96,12,271/-. According to the petitioner, they are victimized by the respondent for the reason that they knocked at the doors of this Court. According to the petitioner, as per the judicial pronouncements including those of the Hon'ble Apex Court and the High Court, it has been categorically held that the differential duty payable for the provisional release in terms of Section 110-A of the Customs Act read with Customs (Provisional Duty Assessment) Regulations can be only between 30% to 50% of the differential duty apart from the execution of a Personal Bond for the value of the goods. Therefore, according to the petitioner, the order passed by the respondent to execute the Bank Guarantee to the extent of 110% of the estimated differential duty is unsustainable. Further, the petitioner contended that in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e effect would be that the seizure order would not apply any further and that the goods in question which were released provisionally and subject to the conditions under Section 110A of the said Act shall be deemed to have been unconditionally released. This would obviously mean that the Bank Guarantee which was furnished at the time of provisional release of the goods, would cease to operate. Consequently, respondents are directed to cancel the bank guarantee and return the same to the petitioner. (ii)2013 (287) E.L.T. 3 (Del.) [Jatin Ahuja Vs. Union of India] wherein the Division Bench of the Delhi High Court held as follows: 9. It can be gathered from the above discussion that the provision of Section 110(2) in so far as the prescription of a time-limit for holding seized goods, is deemed mandatory, the consequence of not issuing a show cause notice within the period or extended period specified is clearly spelt out to be that the goods shall be returned to the person from whose possession they were seized (apparent from a combined reading of Section 110(2) and its proviso). The corollary is not that the Customs authorities lose jurisdiction to issue show cause notice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valid show cause notice during the period of limitation or extended limitation prescribed under Section 110(2) of the Act. With due respect, we are unable to subscribe to the interpretation to the contrary placed by the Bombay High Court in Jayant Hansraj Singh's case (supra). The said interpretation is not borne out from the plain reading of the aforesaid provisions. 7. The learned counsel appearing for the petitioner also relied upon a Circular issued by the Ministry of Finance (Department of Revenue), Central Board of Excise Customs, New Delhi vide Circular:7/2013-Cus. Dated 19.02.2013. The said Circular has been issued by the Government of India, taking into consideration the judgment of the Division Bench of Bombay High Court reported in 2008 (229) E.L.T. 339 (Bom.) [Jayant Hansraj Shah Vs. Union of India] and the judgment reported in 2013 (287) E.L.T. 3 (Del.) [Jatin Ahuja Vs. Union of India]. The relevant portion in the said Circular reads as follows: 3. It has been the considered practice of field formation that in cases where seized goods have been provisionally released by the competent authority under Section 110(a) and investigations in the matter are st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed goods to the person from whom the goods were seized. (3) The field formations should invariably report all cases (including seizure cases) pending investigation in Annexure-IV of Customs MTR on Anti-smuggling Performance giving reasons for pendency of investigation wherever, the pendency is more than 3 months. All Chief Commissioners / Commissioners should monitor the position of cases under investigation (including cases involving seizure of goods through the MTR and otherwise) and take steps for Issue of Show Cause Notices within the time limit prescribed under Section 110(2) of the Customs Act, 1962. 8. According to the respondents, the provisional release of the goods under Section 110-A of the Customs Act was done in accordance with the provisions of the Customs manual and not in accordance with the Customs (Provisional Duty Assessment) Regulations. Further, the respondents contended that the goods were not seized and the petitioner was granted permission to store the goods under Section 49 of the Customs Act. Since the goods were not seized by the 2nd respondent, the question of time limit of six months from the date of seizure does not arise. Consequently, unco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. The learned counsel on either side also advanced arguments on the additional grounds raised by the petitioner. 12. Hence, the petition in W.M.P.No.8734 of 2016 is ordered. 13. On a careful consideration of the materials available on record, the submissions made by the learned counsel on either side and also the judgments relied upon by them, it could be seen that the goods viz., LED Spare Parts for lighting fixtures, Spare Parts for lighting fixtures and Capacitor for lighting fixtures were imported from China on 04.04.2015 by the petitioner. On arrival of the consignment, the petitioner filed Bill of Entry with the 3rd respondent for assessment and clearance of the goods vide Bill of Entry dated 15.04.2015. As per Section 124 (a) of the Customs Act, the respondents should have issued show cause notice within six months from 15.04.2015 (i.e.) on or before 15.10.2015. As per proviso to Section 110 (2) of the Customs Act, the said period of six months may, on sufficient cause being shown, be extended by the Commissioner of Customs for a period not exceeding six months (i.e.) even if the proviso to Section 110(2) of the Customs Act is invoked, the respondents should have iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized : Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Commissioner of Customs for a period not exceeding six months. (3) The proper officer may seize any documents or things which, in his opinion, will be useful for, or relevant to, any proceeding under this Act. (4) The person from whose custody any documents are seized under sub-section (3) shall be entitled to make copies thereof or take extracts therefrom in the presence of an officer of customs. [110-A. Provisional release of goods, documents and things seized pending adjudication Any goods, documents or things seized under section 110, may, pending the order of the Adjudicating Authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the Adjudicating Authority may require.] 14. As per Section 124(a) of the Act, no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns under Section 110-A of the said Act, shall be deemed to have been unconditionally released. Further, the Division Bench held that this would obviously mean that the Bank Guarantee, which was furnished at the time of provisional release, would seize to operate. The Division Bench also directed the respondents to cancel the Bank Guarantee and return the same to the petitioner. The judgment relied upon by the learned counsel for the respondents reported in 2008 (229) E.L.T. 339 (Bom.) [Jayant Hansraj Shah Vs. Union of India] was considered by the Division Bench of Delhi High Court in the judgment reported in 2013 (287) E.L.T. 3 (Del.) [Jatin Ahuja Vs. Union of India] and the Division Bench of Delhi High Court held that the effect of non-issuance of show cause notice under Section 124 has resulted in the operation of Section 110(2) and the statutory dissolution of the seizure order made in the case of the petitioner's car and the said vehicle released provisionally and subject to conditions under Section 110-A shall be deemed to have been unconditionally released. In the judgment reported in 2008 (229) E.L.T. 339 (Bom.) [Jayant Hansraj Shah Vs. Union of India], the Division Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The remedy of provisional release is independent of remedy of claiming unconditional release in the absence of issuance of any valid show cause notice during the period of limitation or extended limitation prescribed under Section 110(2) of the Act. Therefore, merely because a request has been made for provisional release of goods under Section 110-A of the Customs Act and the same has been acceded to by the respondent, the same would not take away the right of the petitioner for unconditional release of the goods under Section 110(2) of the Customs Act. The right under Section 110(2) of the Customs Act is absolute and cannot be curtailed or prevented by the Department. That apart, the Circular issued by the Ministry of Finance dated 19.02.2013 also supports the case of the petitioner. 18. For the reasons stated above, I am of the considered view that the petitioner is entitled to get release of the goods unconditionally. Accordingly, I direct the respondents to release the imported goods LED Spare Parts for lighting fixtures, Spare Parts for lighting fixtures and Capacitor for lighting fixtures covered under the Bill of Entry dated 15.04.2015 to the petitioner within one week ..... X X X X Extracts X X X X X X X X Extracts X X X X
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