TMI Blog2018 (10) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ce it appears that there are several materials, which have been referred to in the show cause notice and it is for respondent to reply to the show cause notice and participate in the adjudication. Since, show cause notice has been issued to the respondent, this Court would be fully justified in considering the allegations made in the show cause notice while considering as to what would be the reasonable conditions to be imposed in the respondent's case, while ordering release. Non-cooperation of the respondent with the investigation - Held that:- It was noted that the respondent did not co-operate with the DRI, Ahmedabad and one Senior Intelligence Officer of DRI, Ahmedabad was present in Court and directions were issued after which, the respondent appeared before the Officer at Chennai and a statement was recorded. Therefore, Mrs.R.Hemalatha is right in her submission that the non-cooperative attitude of the assessee also to be borne in mind so that ultimately when the adjudication is completed, the amount of duty if determined, should not become irrecoverable. Provisional release of goods allowed subject to conditions imposed - appeal allowed in part. - Civil Miscellaneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act, 1962, (hereinafter referred to as the Act ) imposing two conditions namely, a) Submission of Bond for full value of consignment i.e., ₹ 1,45,44,653/-; and b) Submission of Bank Guarantee for ₹ 1,00,00,000/-. 7.The respondent filed Writ Petition No.1549 of 2018 challenging the conditions imposed in the said order. Ultimately, since the importer had appeared before the DRI authorities and a statement was recorded, the Writ Petition came to be disposed of by directing the respondent to file an appeal against the order under Section 110A of the Act before the Commissioner of Customs (Appeals). The appeal was dismissed, vide order dated 09.03.2018. Against the said order, the respondent preferred appeal to the Tribunal and the Tribunal, by order dated 13.04.2018, directed the Department to release the goods on submission of Bank Guarantee for 30% of the differential duty and bond for 70% of differential duty. The Tribunal also ordered to issue detention certificate for waiver of demurrage and detention charges. 8.The respondent filed another Writ Petition in W.P.No.14021 of 2018 seeking for a direction to implement the order of the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further, it is submitted that the Tribunal failed to distinguish between provisional assessment of goods under Section 18 of the Act and provisional release under Section 110A of the Act and the Tribunal ought to have taken note of the decision of the High Court of Delhi in the case of Mala Petrochemicals Polymers vs. The Additional Director General, DRI Another in W.P.(C) No.3965 of 2017 dated 19.05.2017. Further, it is submitted that the Tribunal failed to properly appreciate the effect of the Board Circular No.35/2017-Cus., dated 10.08.2017, which stipulates guidelines for provisional release of seized imported goods. 13.It is further submitted that the decision of Hon'ble Supreme Court in Commissioner vs. Navshakti Inds. Pvt. Ltd. [2011 (269) E.L.T. A146 (SC)] directing release of the goods therein on furnishing a Bank Guarantee for 30% of the differential duty, cannot be taken to be an affirmation of the decision of the High Court of Delhi in Navshakti Industries P. Ltd. vs. Commissioner of Customs [2010 (253) E.L.T. 771 (Delhi)]. Therefore, it is submitted that the order passed by the Tribunal requires to be set aside and the substantial questions of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er held that if the Department is able to show that it acted in accordance with law, it would really make no difference because, the principles laid down by Customs (Provisional Duty Assessment) Regulations, 1963 would nevertheless be binding for provisional clearance of the goods in the absence of any other method of safeguarding the interest of the Revenue. 18.Reliance was placed on the decision of the Division Bench of this Court in the case of Commissioner of Customs, Tuticorin Vs. Empire Exports [2013 (287) E.L.T. 41 (Mad.)], where provisional release was ordered on payment of 30% of differential duty. 19.Reliance was also placed on the judgment of the Division Bench of this Court in the case of The Assistant Commissioner of Customs and Another vs. M/s.Kanishka Enterprises [Writ Appeal No. 384 of 2018; Dated 27.02.2018] wherein, the order passed by the Writ Court, permitting release of goods on payment of 30% of the differential duty, was upheld. 20.By way of reply, Mrs.R.Hemalatha, learned Senior Standing Counsel submitted that the condition to pay 30% of the differential duty is not an universal rule and in all cases, the decision in the case of Commissioner vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion charges, as the consignment was detained at the instant of the Department. Pursuant to such direction, an order dated 19.01.2018 was passed permitting provisional release by imposing two conditions, directing the petitioner to submit a bond for full value of consignment of ₹ 1,45,44,653/- and submission of Bank Guarantee for ₹ 1,00,00,000/-. The order did not disclose as to what was the basis for arriving at the value of the consignment, nor the nexus with regard to the amount of Bank Guarantee insisted upon. This order, dated 19.01.2018, passed by the Customs Department, was put to challenge in W.P.No.1549 of 2018. Considering the factual matrix involved and the other allegations, the Court directed the respondent to prefer an appeal before the Commissioner of Customs (Appeals) challenging the conditions imposed in the order dated 19.01.2018. Accordingly, an appeal was preferred by the respondent before the Commissioner of Customs (Appeal). The appeal was rejected by order dated 09.03.2018, holding that the adjudicating authority rightly insisted for Bank Guarantee for ₹ 1,00,00,000/- taking into account the differential duty and probable fine and penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and reasonable or is it onerous and unreasonable. Undoubtedly, there is room for exercise of discretion while considering an application for provisional release exercising powers under Section 110A of the Act. However, such exercise cannot be unguided or unbridled. The exercise of discretion and imposition of conditions should satisfy the test of reasonableness vis-a-vis the factual matrix. 29.Mrs.R.Hemalatha, is right in her submission to state that no two cases of provisional release are identical. Therefore, to that extent, the learned counsel is right in her submission that the earlier decisions, relied on by Mr.S.Baskaran, cannot be an universal rule for all cases of provisional release. 30.What is required to be seen in the instant case is whether there was justification on the part of Customs Department to insist upon Bank Guarantee for ₹ 1,00,00,000/-. Admittedly, in the order dated 19.01.2018 no reasons have been assigned by the Customs Department to impose such a condition. 31.Mrs.R.Hemalatha relies upon a circular issued by the Board. In our considered view, circulars can be guidelines for the officers and such circulars also provide for exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive attitude of the assessee also to be borne in mind so that ultimately when the adjudication is completed, the amount of duty if determined, should not become irrecoverable. 35.Furthermore, one other factor, which is pointed out, is the statement given by one Mr.Mahaveer Kumar, who claims to be the beneficial owner of the goods. However, we do not propose to dwell further on this aspect, as it is a matter to be considered while adjudicating the show cause notice. 36.Thus, considering all the aspects, we are of the view that the following order will safeguard the interest of Revenue as well as the respondent while permitting provisional release of the goods. Accordingly, the appeal is partly allowed and the order passed by the Tribunal is modified as follows:- (i) The respondent shall pay the duty as declared by them on the import value, if not already paid; (ii) The respondent shall pay 50% of the differential duty between the duty on the declared value and the duty on proposed enhanced value fixed by the Department by furnishing a Bank Guarantee; (iii) The respondent shall execute a personal bond for value of balance of 50% of differential duty to the satisfac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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