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TMI Blog2022 (6) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... N 2741/08.11.2021 which was, in turn, produced at the two places of import. 2. The conclusion by the investigators at Tumb that goods of Iranian origin had been misdeclared sufficed for them to seize the consignments on 2nd February 2022 under section 110 of Customs Act, 1962 and which in exercise of powers vested under section 110A of Customs Act, 1962, was allowed by the presumptive adjudicating authority, vide letter dated 6th April 2022, to be released provisionally upon execution of bond for five times the value of the goods and furnishing of bank guarantee for 15 per cent of the value of the goods. On appeal before the Tribunal against the terms of provisional release, it was held that bond for value of the goods and bank guarantee for Rs.1,00,00,000 should suffice for the importers to regain possession of the goods. 3. While those proceedings were, as yet, underway, the lone consignment imported at Nhava Sheva was also seized, under the authority of section 110 of Customs Act, 1962, on 1st March 2022 in the reasonable belief of being liable to confiscation under section 111 (m) of Customs Act, 1962 for consequential misdeclaration of value to the extent of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the cause that we did swear to further, with fairness and impartiality, awhile back. However, it would be no less appropriate for the bar - both sides - to bear in mind that this Tribunal has close to five centuries of experiential existence in discharging functions in the public eye and has evolved its own conventions, publicly declared, that permit such 'out of turn' disposals. 6. The expression 'seize', and its grammatical variations and cognate expressions, is not defined in Customs Act, 1962; however, the Hon'ble Supreme Court, in Gian Chand and others v. The State of Punjab [1962 AIR 496], noticing the necessity of elaboration, in the context of submissions relevant to the issue in dispute and in response to the reliance on the meaning assigned in a law lexicon, observed that '... This however might be the meaning in particular contexts when used in the sense of the cognate Latin expression "Seized" while in the context in which it is used in the Act in s. 178 A it means 'take possession of contrary to the wishes of the owner of the property'. No doubt, in cases where a delivery is effected by an owner of the goods in pursuance of a demand under legal right, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arrangement made by the High Court in the said order was only provisional one by way of interim arrangement.' which sums of the scope of the proceedings before us. The appellant is in business and cannot be denied the cavil of the fiscal detriment arising from the terms offered by the adjudicating authority; the notice issuing authority cannot but be expected to incorporate the utmost detriment permissible by law, or even without, in the framework of adjudicatory outcome. Between commercial objectivity on the one hand and administrative caution on the other, the operation of section 110 A of Customs Act, 1962 appears to have been rendered inoperable and, hence, our intervention sought to subject the terms to the test of the golden mean of responsible and responsive discharge of statutory mandate with the merit of the seizure temporarily obliviated till the notice is disposed off under appropriate provisions of Customs Act, 1962. Our determination herein has no bearing on the adjudication proceedings. 8. Though the grievance is not about denial of access to the goods through the mechanism of section 110A of Customs Act, 1962, effective denial is attributed to the terms by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Tribunal dated 31st October 2017 disposing off appeal against terms of order for provisional release by remand to the adjudicating authority and, after taking note of the decision of the five member Larger Bench of the Tribunal in Commissioner of Central Excise and Service Tax v. Gaurav Pharma Ltd [2015 (326) ELT 561] which reversed the decision of the Tribunal in Akansha Syntax Pvt Ltd v. Commissioner of Customs (General), Mumbai [2013 (289) ELT 186 (Tri-Mum)] , it was observed by the Hon'ble High Court of Bombay in Commissioner of Customs (Import), Mumbai v. SS Offshore Pvt Ltd [2018 (361) ELT 51(Bom)], that '10. Before dealing with the rival submissions, we must make it clear that no fault can be found in the Tribunal entertaining the appeal from the letter dated 25 September 2017 directing provisional release of the vessel. This is for the reason that at the time the division bench of the Tribunal entertain the appeal and passed the impugned order dated 31 October 2017, it was bound to do so, as the issue was concluded by the decision of its larger Bench in Gaurav Pharma (supra). The decision of the larger bench continues to be binding in the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the order is passed and/or decision taken. Moreover an appeal from a decision of provisional release under Section 110A of the Act, would cause no prejudice to the Revenue. The goods which have been seized continue to be seized until the imported satisfies the conditions of provisional release and the adjudication proceedings are not in any manner halted /adjourned, merely because the importer is not satisfied with the terms of provisional release. Therefore we hold that the order/direction given under Section 110A of the Act is an appealable order under Section 129 A (1) (a) of the Act. xxxxx 18 We are in complete agreement with the analysis done by the larger bench of the Tribunal in Gaurav Pharma (supra) as reproduced in the extracts herein above. xxxxx 20. We also noted that the Delhi High Court in the cases of Gurdeep Kaur (supra) and Candex Chemical (supra) has also taken a view similar to ours. Further before the Rajasthan High Court in the cases of Shiv Mahal Textiles (supra) and Gentleman Suitings (supra) the Revenue has successfully urged before the court that an appeal from an order passed under Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able judicial intervention that followed prompted two significant changes therein, viz., substitution of 'adjudicating officer' and 'Commissioner of Customs' therein with 'adjudicating authority' through Finance Act, 2011 with provisional release governed, as of now, by '110 A. Provisional release of goods, documents and things seized pending adjudication. - Any goods, documents or things seized under section 110 may, pending the order of the adjudicating authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require.' and, with the Hon'ble High Court of Madras in AS Enterprises v. Commissioner of Customs [2016 (337) ELT 321(Mad)], on the plea for suspension of section 110(2) of Customs Act, 1962 owing to the provisional release, enabled by section 110A of Customs Act, 1962, having held that, notwithstanding the order of provisional release, breach of the stipulation for issue of notice under section 124 of Customs Act, 1962 would have the effect of discharge from all conditions imposed for provisional release, the amended proviso to section 110(2) of Customs Act, 1962 through Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to incorporate limitations, on provisional release of seized goods, which find no place in the parent statutory provision, i.e. Section 110 A of the Act. Executive instructions may, it is trite, supplement the statute, where such supplementation is needed, but can never supplant the statutory provision. By excluding, altogether, certain categories of goods from the facility of provisional release, para 2 of Circular 35/2017- Cus supra clearly violates Section 110A, whereunder all goods, documents and things, are eligible for provisional release. Goods, which are eligible for provisional release under Section 110A of the Act, cannot be rendered ineligible for provisional release by virtue of the Circular. (Be it noted, here, that we refer to the "eligibility" of the goods for provisional release, as distinct from "entitlement" thereof, which has to be determined by the adjudicating authority in exercise of the discretion conferred on her, or him by Section 110 A.) Para 2 of Circular 35/2017-Cus, therefore, effectively seeks to supplant Section 110 A, to that extent, and has, therefore, to be regarded as void and unenforceable at law. 15. Furthermore, the said circular has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fine, which should have been a consequence of confiscation by lawfully constituted authority in statutorily acknowledged proceedings, and of a penalty must be undertaken as a prelude to provisional release. It is not anybody's guess as to the scope for exercise of uninfluenced assessment of facts and law in adjudication proceedings thereafter. It is not just the bar on release of some category of goods but also this guided outcome of adjudication that jeopardizes the continued authority of the circular. 17. The Hon'ble High Court of Delhi was, in Spirotech Heat Exchangers Pvt Ltd v. Union of India [2016 (341) ELT 110 (Del)], compelled to note that '6. The Court notices that despite the aforementioned orders of this Court and the Supreme Court, the respondents are continuing to impose harsh conditions for provisional release of goods. In the present case, apart from the exporter having to pay 100% of the differential duty it has to furnish a bank guarantee equivalent to 25% of the differential duty and execute a bond for 100% of the value of the goods. Since the respondents do not appear inclined to follow the aforementioned order binding order of the Supreme Court, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease of the gold, gold jewellery and silver, and fixing the terms thereof, the learned Tribunal exceeded the jurisdiction vested in it.' from which we reasonably conclude that the Tribunal may, in its appellate jurisdiction, consider effective denial of provisional release by imposition of impossibly harsh conditions of compliance to be of no less justification for interference than outright denial and, thereafter, take it upon itself to remedy the dispossession. 19. Hence, it would appear that judicial approval was not forthcoming for the several strands of deployment of section 110A of Customs Act, 1962 that was manifested in ways and means of retention of seized goods till adjudication and beyond, upon confiscation, till appellate remedy was exhausted. The implementation of the incorporation for provisional release appeared to be founded on the belief that the said mechanism for conditional restoration of possession to the owner was restrictive and a measure to safeguard revenue. That appears to have guided the contents of circular no. 35/2017 dated 16th August 2017 of Central Board of Excise & Customs (CBIC) banning the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase imported goods on a provisional basis is essentially and fundamentally discretionary in nature; iv. Section 110A of the Customs Act contemplates release of any goods. Thus, both prohibited goods and non- prohibited goods can be released; v. If the goods are not per se prohibited, question of going into prohibited goods as per Om Prakash Bhatia case does not arise at the stage of provisional release; vi. A Circular which absolutely proscribed provisional release of prohibited goods or where any provisions are contravened, is void; vii. The Tribunal is competent to order provisional release and fix terms and there is no need for remand; viii. While passing an order for provisional release, there is no adjudication of competing rights and liabilities; ix. High Courts would interfere with an order passed by the Tribunal for provisional release of the goods only on grounds of perversity; x. Allowing provisional release of the seized goods does not interfere with the adjudication of the show cause notice or with the jurisdiction of the adjudicating authority to hold that the goods were liable to confiscation and the mere fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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