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M/s. Sri Vijayalakshmi Leathers represented by its Partner S. Ramanathan Versus The Principal Commissioner of Customs-III (SIIB) Custom House Chennai and The Commissioner of Customs Chennai IV Chennai Deputy Commissioner of Customs (SIIB) Chennai

Provisional release of goods - Circular No.01/2011-Customs, dated 04.01.2011 - communication to SIIB according to 'Let Export Order' - 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? - Held that: - taking notice of the fact that the goods in question are newsprint which is perishable in nature, we issue a direction that the goods of the respondents shall be cleared by .....

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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 .....

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N ORDER 1. These are nine (9) writ petitions, which seek to challenge a common order dated 23.11.2016, passed by respondent No.3, whereby, provisional release of goods sought to be exported by the petitioners, has been directed, albeit, on certain conditions set forth in the said order, which are purportedly said to be onerous and against the usual conditions put forth in such like matters. 2. The conditions, which have been imposed are set out in paragraphs 6, 7 and 8, of the impugned orders. 2 .....

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; (iii) after adequate numbers of samples as required including for possible prosecution may be taken / collected before such provisional release. 7. In view of the Pr.Commr-III's instructions, it is informed that if the exporters avail the option for Provisional release of the goods, the same may be communicated to SIIB before according 'Let Export Order' to enable the SIIB to draw samples as instructed. 8. The copies of relevant shipping bills and other connected documents are here .....

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be evident, the said condition stipulates payment of applicable export duty in order to seek provisional release of the subject goods. 4. Notice in these writ petitions were issued on 09.12.2016. Though, no counter affidavit has been filed on behalf of the respondents, arguments were advanced, based on the record filed with this Court, along with the writ petitions. 4.1. Respondents, though, have filed a typed set of documents, containing documents which they thought were material for adjudicat .....

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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, .....

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cular No.01/2011-Customs, dated 04.01.2011, issued by the Central Board of Excise and Customs (in short "the Board"). 5.8. Admittedly, the said representation was not, immediately, attended to and, instead, a second set of samples was drawn by respondent No.3, on 09.11.2016. These samples were also sent by respondent No.3, for testing to CLRI. 6. The petitioners, having become aware of this development, apparently, on 11.11.2016, made a request to the Assistant Commissioner of Customs, .....

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eir Advocate, was convened with respondent No.3, to seek a status report, with regard to the matter in issue. 6.3. It appears that two days later, a second meeting, in this behalf, was also convened with respondent No.3, that is, on 17.11.2016. The exercise, I am given to understand, was repeated on 18.11.2016 and 22.11.2016. According to the petitioners, the Customs House Clearing Agent (CHA) engaged by them, also met up with respondent No.3, to check the status of the consignments. 6.4. The re .....

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on 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 faci .....

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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 (which, quite obviously, can only be based on guess work, as the investigation is still on) that often respondents classify such link goods as unfinished leather, when one of the processes, which is, otherwise, minor in nature, is not complete. Towards this end, learned counsel gave an example of a process described as "fi .....

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Chennai. 9.3. As would be obvious from the cause title of the instant writ petitions that, Vijayalakshmi Leather case relates to one of the petitioner's before me, i.e., petitioner in W.P.No.43062 of 2016. 9.4. Furthermore, learned counsel points out that the judgement of the tribunal in Expos Leather Company case was challenged before this Court. This Court, vide judgement dated 19.11.2010, passed in C.M.A.No.2937 of 2010 repelled the challenge. A copy of the judgment has been filed to dri .....

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he respondents, as if a fraud has been committed by the petitioners, is a complete bogey, which ought not be countenanced by this Court. 9.7. This apart, learned counsel relies upon the Board's Circular No.01/2011-Customs, dated 04.01.2011 to seek provisional release of goods on execution of a bond of an amount equivalent to the value of the goods along with an appropriate security. 9.8. More importantly, learned counsel says that the respondents to date have not supplied the petitioners wit .....

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nd 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 .....

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7 of 2016, titled : Malabar Diamond Gallery Pvt. Ltd., Vs. The Additional Director General, Directorate of Revenue Intelligence, Chennai Zonal Unit and others. 11. I have heard the learned counsel for the parties and perused the record. 12. Clearly what emerges from the record is as follows : (i) There are two reports of CLRI one of which has been placed on record by the petitioners. The other report is in the custody of the respondents, the existence of which is not denied. The first favours th .....

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.11.2016 addressed to the Advocate acting for the petitioners. The suggestion, therefore, that the petitioners had assessed, unauthorisedly, internal communication, appears to be untenable for the reason that respondent No.3 says that respondent No.1 has recommended provisional release of subject goods in terms of the Board's Circular No.01/2011, dated 04.01.011.. As a matter of fact, conditions for provisional release, are, in fact, provided in the communication, exchanged between responden .....

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(v) There was no movement in the matter, till the impugned order was passed. 13. Thus, having regard to the aforesaid facts, 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). .....

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rder 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 present appeal being aggrieved by the aforesaid order in respect of which it is being contended that the aforesaid order passed by the High Court is erroneous as the amount for which the bond is to .....

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der immediately on furnishing of the aforesaid bank guarantee and satisfaction of the concerned Commissioner of Customs. We also direct the Commissioner of Customs to hear the adjudication proceeding pending before him as early as possible, preferably within a period of three months, from the date of receipt of a copy of this order. In terms of the aforesaid order, the appeal stands disposed of. We, however, make it clear that while passing the aforesaid order, we have not expressed any opinion .....

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ied upon the Division Bench judgement of this Court dated 28.07.2016, passed in W.A.No.377 of 2016, titled : Malabar Diamond Gallery Pvt. Ltd., Vs. The Additional Director, Directorate of Revenue Intelligence. 15.1. Notably, the Division Bench, in the said case (contrary to argument advanced on behalf of the respondents), has cast an obligation on the competent authority to arrive at a satisfaction, whether, the goods seized, which are otherwise liable for confiscation, can be released provision .....

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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 an .....

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fit in this behalf, the following clause from the Board's circular : ..... (a) In case the export goods are found to be misdeclared in terms of quantity, value and description and are seized for being liable to confiscation under the Customs Act, 1962, the same may be ordered to be released provisionally on execution of a Bond of an amount equivalent to the value of the goods along with furnishing an appropriate security in order to cover the redemption fine and penalty. ....(emphasis is min .....

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tention, as it otherwise, results in congestion of Ports and accumulation of demmurage charges. 17.1. A perusal of the Facility Circular, on which reliance was placed by Mr.Sundar, would show that it provides for provisional assessment of goods. (i.e. finished leather consignments) pending receipt of test report by the respondent. The Facility Circular does not override the Board's Circular dated 04.01.2011. In fact, the communication dated 23.11.2016 addressed to petitioner's advocate i .....

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arently, generated, wherein, CLRI has, purportedly, come to the conclusion that the subject goods are not finished leather, has not been placed on record. Furthermore, this report has not, apparently, been handed over to the petitioners. 18.1. Therefore, for the respondents 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 f .....

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