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TMI Blog2022 (3) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... overed under Bill of Entry No.2057278 dated 14.02.2019, seized under panchanama dated 09.08.2019 at M/s Ameya Logistics (CFS) Nhava Sheva [as mentioned in Para 33.1.2(vi) of SCN dated 20.08.2019] have already been disposed of by the jurisdictional Commissionerate (NS-III Commissionerate, JNCH) after issuing notices under section 48 of the Customs Act, 1962 to you. 3. As regards your request for provisional release of other seized goods, it is seen that CBEC Circular dated 09.07.2014 issued from F.No. 450/71/2014/-Cus IV read with Steel and Steel Products (Quality Control) Order 2012 dated 12.03.2012 and Steel and Steel Products (Quality Control) Second (amendment) Order 2014 dated 31.03.2014, it is observed that "import of such items shall be permitted only from manufacturers/ exporters who have obtained BIS licence for use of standard marks and the product meets the prescribed quality parameters/technical requirements of the relevant Indian Standards and also bears the standard marks". Therefore, the following statutory conditions are required to be complied with to allow release of imported CRGO sheets: (i) Import of such item shall be permitted only from manufacturer/ expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein in para 2 of the said Circular, it is categorically mentioned that the provisional release of the following goods shall not be allowed: (i) Goods prohibited under the Customs Act, 1962 or any otherAct for the time being in force; (ii) Goods that do not fulfill the statutory compliance requirements/obligations in terms of any Act, Rule, Regulation or any other law for the time being in force; 3.4. Further, it is observed that provisional release of such non standard seized goods will pose threat to safety in general and power industry in particular and add to the transmission loss and result in breakdown of transformers and such import of goods and their provisional release thereof would be contrary to the intention of Ministry of Steel as mentioned above and against public interest. 4. In view of the above statutory provisions and Orders of Steel Ministry and the guidelines by the Board, the request made by you for provisional release of the said seized goods is not acceded to. 5. As regards to the request of the Certified copies of original Test Reports, the same are enclosed herewith. With regard to return of original title documents in respect of the seized goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the time being in force; (iii) Goods specified in or notified under Section 123 of the Customs Act, 1962; (iv) Where the competent authority, for reasons to be recorded in writing believes that the provisional release may not be in the public interest. 2.1. Seized imported goods shall be released provisionally by the competent authority upon request of the owner of the seized goods, subject to executing a Bond for the full value/ estimated value of the seized goods. 2.2. Further, in addition to the Bond mentioned at Para 2.1. above, the competent authority shall take a Bank Guarantee or Security Deposit to cover the following: i. the entire amount of duty/differential duty leviable on the seized goods being provisionally released; ii. amount of fine that may be levied in lieu of confiscation under Section 125 of the Customs Act, 1962 at the time of adjudication of the case. While securing the same, the competent authority shall take into account the nature of the seized goods, the duty and charges payable on the said goods, their market price and the estimated margin of profit; iii. amount of penalties that may be levied under the Customs Act, 1962, as applicable, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions attached to such import, it could amount to smuggling and that a prayer for provisional release could be refused. The Hon'ble Delhi High Court has further observed that the power under Section 110 A of the Act involves exercise of discretion and the scope of judicial review is to examine if the discretion has been rightly exercised; that treatment of all types of wrongful imports on an equal footing might result in miscarriage of justice; and that Section 110 A leaves some margin to the Customs in the exercise of their discretion subject to the recognized legal limits. 4.1. The above mentioned observations of the Hon'ble Madras High Court and Hon'ble Delhi High Court may be kept in mind while allowing provisional release of goods. 5. Where provisional release of seized imported goods is allowed, the bond referred to in Para 2.1 shall contain an undertaking that the importer shall pay the duty, fine and/or penalty as may be adjudged by the Adjudicating Authority, subject to appellate provisions under the Act. Further, where security is furnished by way of Bank Guarantee, the Bank Guarantee should contain a clause binding the issuing bank to keep it renewe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al release, pending adjudication. 90. When a claim for provisional release under Section 110A of the Customs Act, is made, in the light of the decision in Lexus Exports Pvt. Ltd's case (cited supra), exercise of such right under Section 110A is only provisional and not absolute. On the culmination of adjudication proceedings, the authority may grant an option to pay fine in lieu of confiscation under Section 125 of the Customs Act, 1962 and such expected or anticipated right, cannot give rise to a cause for issuance of any mandamus sought for, under Section 110A of the Act and on the facts and circumstances of the case, when provisional release, sought for, is denied by the authorities, by filling a counter affidavit, contending that there is a prima facie case of smuggling. 91. If Courts have to consider the prayer sought for, under Section 110A of the Act, on the presumption that such rights are likely to be granted in future, under Section 125 of the Act, by the competent authority, then we would be exceeding in our jurisdiction. At the stage, when provisional release is either ordered or denied, discretion exercised by the authority, is administrative in nature. 92. Obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for confiscation is taken, such proceedings taken should be allowed, to reach its logical end, and not to the stiffed, by any provisional release. 6.0 In case of Mala Petrochemicals and Polymers [2017 (353) E.L.T. 446 (Del.)], referred to in Board Circular, Hon'ble Delhi High Court has again observed as follows: "23. The power under Section 110A of the Act involves exercise of discretion. The scope of judicial review is to examine if the discretion has been rightly exercised; that it is not based on irrelevant materials and is fair and reasonable in the circumstances. It is not an Appellate power. The drawing of a distinction between seizure of imported goods as a result of undervaluation and seizure of imported goods upon misdeclaration cannot per se be said to be irrational. On the contrary, the failure to draw such a distinction and treat all types of wrongful imports on an equal footing might result in miscarriage of justice. That is perhaps why Section 110A has been worded in the way it has, leaving some margin to the Customs in the exercise of their discretion subject, of course, to the recognised legal limits." 7.0 Thus we find that in both the decisions which are backb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory authority cannot be directed to exercise its discretion in a particular manner but, as noticed in the present case, the exercise of discretion by the Adjudicating Authority has been questioned on various grounds and the Appellate Authority has, in fact, set aside the orders-in-original whereby the Adjudicating Authority had exercised the discretion to release the goods with redemption fine and penalty. Having found that the goods in question fall in the category of 'prohibited goods' coupled with the relevant background aspects, including the reasons behind issuance of the notifications in question and the findings of this Court in Agricas (supra), the question is as to whether the exercise of discretion by the Adjudicating Authority in these matters, giving option of payment of fine in lieu of confiscation, could be approved? 79. As noticed, the exercise of discretion is a critical and solemn exercise, to be undertaken rationally and cautiously and has to be guided by law; has to be according to the rules of reason and justice; and has to be based on relevant considerations. The quest has to be to find what is proper. Moreover, an authority acting under the Customs Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance; and while exercising its discretion in the matter of interim relief and adopting a particular course, the Court needs to weigh the risk of injustice, if ultimately the decision of main matter runs counter to the course being adopted at the time of granting or refusing the interim relief. We may usefully refer to the relevant principle stated in the decision of Chancery Division in Films Rover International Ltd. and Ors. v. Cannon Film Sales Ltd. : [1986] 3 All ER 772 as under :- "....The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the "wrong" decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been "wrong" in the sense I have described. The guidelines for the grant of both kinds of interlocutory injunctions are der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een of some amount of loss of profit, which could always be measured in monetary terms and, usually, cannot be regarded as an irreparable one. Another simple but pertinent question would have been concerning the element of balance of convenience; and a simple answer to the same would have further shown that the inconvenience which the importers were going to suffer because of the notifications in question was far lesser than the inconvenience which the appellants were going to suffer (with ultimate impact on national interest) in case operation of the notifications was stayed and thereby, the markets of India were allowed to be flooded with excessive quantity of the said imported peas/pulses." 8.0 In view of the discussions as above we are not in position to sustain the order/ communication dated 12.11.2021 of the Additional Director General (Adjudication) DRI Mumbai and set aside the same. 9.1 The appeal is allowed and the matter remanded back to the original authority for consideration of the request for provisional release considering the test reports, policy provisions and other submissions made by the appellant. 9.2 Since the matter is in respect of the goods which are unde ..... 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