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2016 (12) TMI 1592 - MADRAS HIGH COURT

2016 (12) TMI 1592 - MADRAS HIGH COURT - TMI - 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 t .....

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, 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 nat .....

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spondent: Mr.S.R.Sundar, Standing Counsel COMMON 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 p .....

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opriate security for fine and penalty leviable ; (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 shippi .....

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ted in clause (i) of paragraph 6. 3.1. As would 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 .....

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ples 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 th .....

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inter alia, based on the provisions of the Circular 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 re .....

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rs that on 15.11.2016, a meeting, along with their 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 ch .....

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nd, the subject goods are liable for confiscation 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 .....

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dents 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 (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 gav .....

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os Leather Company Vs. Commissioner of Customs, 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 challeng .....

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he petitioners that the entire case set up by the 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 respondent .....

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nternal 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, .....

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his Court dated 28.07.2016, passed in W.A.No.377 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 existen .....

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ondent No.3's letter of even date, i.e., 23.11.2016 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 .....

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tatutory right, under Section 110A of the Act. (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. Navshak .....

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t 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 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 e .....

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The goods shall be released in terms of this order 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 afor .....

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that, as against this, the respondents have relied 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 lia .....

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f 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, reli .....

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ircular dated 04.01.2011. I may quote, with profit 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 re .....

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, as a matter of rule, to avoid interminable detention, 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 23.1 .....

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tioners. The second report, which has been, apparently, 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 demmur .....

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