TMI Blog2016 (12) TMI 1592X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s Customs Manual, clearly says that save and except in exceptional cases, pending investigation, wherever, importer or exporter is willing, he should be allowed provisional clearance of goods, by furnishing a bond for full value of the goods supported by an adequate Bank Guarantee, as may be determined by the proper Officer. The condition imposed sub clause (i) of paragraph 6 of the impugned order can be relaxed, by substituting the said condition, with an option being given to the petitioners to seek release of the subject goods/consignments by furnishing a Bank Guarantee of a nationalised bank equivalent to 30% of the export duty. This is so, as finished leather, as per the extant policy, is freely exportable, while, generally, unfinished leather, i.e., hides, skins, leather - tanned and untanned, are subject to export duty, at the rate of 60%. Petition allowed - decided in favor of petitioner. - W.P.Nos.43062 to 43070 of 2016 and W.M.P.Nos.36923 to 36939 of 2016 - - - Dated:- 22-12-2016 - THE HONOURABLE MR. JUSTICE RAJIV SHAKDHER For Petitioner : Ms.V.Pramila For Respondent: Mr.S.R.Sundar, Standing Counsel COMMON ORDER 1. These are nine (9) writ pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a typed set of documents, containing documents which they thought were material for adjudication of the case. Therefore, with the consent of counsel for the parties, the writ petitions were taken up for final hearing and disposal. 5. In order to adjudicate upon the instant writ petitions, the following brief facts, which are common to all the petitioners are required to be noticed : 5.1. The petitioners sought to export what they claim are the consignments of finished leather- via nine (9) shipping bills. 5.2. Evidently, on 05.10.2016, samples were drawn by respondent No.2, which were sent for testing to the Central Leather Research Institute (in short CLRI ). 5.3. Consequent thereto, on 07.10.2016, CLRI submitted its report, which was indicative of the fact that the samples, satisfied the norms stipulated under the public notice. 5.4. It appears that respondent No.3 was not satisfied with the report of CLRI, as it had received intelligence inputs which propelled him to doubt the veracity of the outcome indicated in the CLRI report. 5.5. Resultantly, on 08.10.2016, the warehouse, where the consignments were lying, were sealed. The aforesaid action was followed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfiscation under Section 113(i) of the Act. 7. It is, in this background, that the impugned order came to be passed; which, the petitioners claim, was served upon them on 25.11.2016. 8. As indicated above, aggrieved by the condition put forth in paragraph 6(1) of the impugned order, which, inter alia, requires the petitioners to pay the entire applicable export duty - these writ petitions have been filed. 9. Learned counsel for the petitioners says that not only do the petitioners have a good prima facie case on merits, but the condition imposed is onerous and is contrary to the orders passed in the following cases : (i).Commissioner of Vs. Navshakti Industries Ltd., 2011 (269) E.L.T. A 146 (SC). (ii).Zest Aviation Pvt. Ltd., Vs. Union of India, 2013 (289) E.L.T. 243 (Del.) (iii).Aban Exim Pvt. Ltd., Vs. Principal Commissioner of Customs, 2015 (319) E.L.T. 430 (Del.) 9.1. It is also argued by the learned counsel for the petitioners that the respondents contention that the subject goods are not finished leather, is, perhaps, based on a misunderstanding of the processes involved in reaching the finished leather stage. It is the learned counsel's submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spite a request having been made in that behalf. 10. On the other hand, Mr.Sundar, who appears for the respondents, has resisted the variation of the condition contained in clause (i) of paragraph 6 of the impugned order. 10.1. Quite, inexplicably though, while resisting variation of the aforementioned condition, learned counsel makes a submission that the impugned order being an internal communication between respondent No.3 and respondent No.2 cannot be relied upon by the petitioners in the present proceedings. 10.2. Furthermore, learned counsel submits, (sans any record or an affidavit) that the second set of samples had to be drawn, as intelligence was received by the respondents that the first report was generated after the samples drawn in that behalf had been surreptitiously substituted. 10.3. Learned counsel relied upon the Board's Circular No.01/2011-Customs, dated 04.01.2011, and the facility circular No.01/2014, dated 02.01.2014, as also upon extracts taken from the Board's Customs Manual, in particular, Clause 2.2.(c), to contend, that there can be no variation of the condition contained in paragraph 6(i) of the impugned order. 10.4. In order to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, what is required to be considered is : whether it is a fit case to allow provisional release of the subject goods, by relaxing the rigour of the condition contained in clause (i) of paragraph 6 of the impugned order. 13.1. In this context, I may refer with profit the observations of the Supreme Court in Commissioner V. Navshakti Industries Ltd., 2011 (269) E.L.T. 146 (SC). However, while, adverting to the observations of the Supreme Court, it may be relevant to note that the Court was dealing with a matter arising out of a judgment of the Delhi High Court which had permitted release of goods based on execution of a bond equivalent to 20% of the differential custom duty by substituting the said condition with the condition to furnish a bank guarantee equal to 25% of the value of goods. ...... Leave granted. The present appeal is directed against the judgment and order dated 11th May, 2010 passed by the Division Bench of the High Court of Delhi directing the appellants herein to clear the goods of the respondents on their furnishing a bond of 20% of the differential duty to the satisfaction of the concerned Commissioner of Customs. The appellants have filed the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That was a case, where, smuggling of gold jewellery was involved, which is not the case here. Therefore, on facts, the said judgement is clearly, distinguishable from the facts obtaining in the instant case. 15.3. Furthermore, I may also note that the judgement of the Bombay High Court, in the case of Apollo Cranes Pvt. Ltd., Vs. Union of India, 2012 (275) E.L.T. 148 (Bom.), which, apparently, has taken a different view from those cited by the petitioners, pertinently, has not noticed the judgement of the Supreme Court in Navshakti Industries case. This aspect of the matter has been brought to fore by the Division Bench of the Delhi High Court in Zest Aviation case as well. 16. I may also note that clause 2.2. (c) of the Board's Customs Manual, relied upon by Mr.Sundar, clearly says that save and except in exceptional cases, pending investigation, wherever, importer or exporter is willing, he should be allowed provisional clearance of goods, by furnishing a bond for full value of the goods supported by an adequate Bank Guarantee, as may be determined by the proper Officer. Furthermore, the said clause goes on to say that provisional clearance ought to be the rule and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents to detain the goods interminably, would neither enure to the benefit of the petitioners nor to the interest of the State. Interminable detention results in accumulation of demmurage and detention charges, apart from loss of foreign exchange, which has to be best avoided, unless, as indicated in the Board, in the Circular of 04.01.2011, they fall in the category of goods, which require absolute confiscation. 19. A perusal of the impugned order would show that while provisional release has been ordered, the conditions imposed are onerous. 19.1. Therefore, what this Court is called upon to do is to rule as to whether or not the condition imposed is onerous, given the facts and circumstances of this case. 20. According to me, in line with the judgements referred to above, which includes the judgement of the Supreme Court in Navshakti Industries case, the condition imposed sub clause (i) of paragraph 6 of the impugned order can be relaxed, by substituting the said condition, with an option being given to the petitioners to seek release of the subject goods/consignments by furnishing a Bank Guarantee of a nationalised bank equivalent to 30% of the export duty. This is s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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