TMI Blog2023 (12) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... e security so as to cover the redemption fine and penalty. The contents of the circular are simple, clear and there is no ambiguity in the terms and conditions prescribed therein and hence the same has to be complied. The authorities below has categorically recorded the findings on the basis of the test report that the description of the impugned goods to be exported have been mis-declared. The appellant has described the goods as Whey Flour Powder , however, they were found to be Maida . By virtue of the said mis-declaration, the appellant attempted to achieve the benefit of 10% of the FOB value as whey flour powder was covered under the MEIS whereas Maida was not covered under the said Scheme and therefore the appellant would not have been entitle to the benefit of the Scheme. Similarly, even in respect of valuation, the appellant has over valued the goods. Reliance placed by the appellant on Circular No. 17/2009 dated 25.5.2009 is misconceived as it specifically refers to norms for execution of bank guarantee under specified export promotion schemes, i. e. Advance License and EPCG Schemes, whereas the Circular dated 4.1.2011 specifically provides for conditions while ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, the competent authority provisionally released the impugned seized goods and communicated the same to the appellant vide letter dated 21.01.2019, subject to the fulfillment of the following conditions:- i. Submission of Seizure Bond of Rs.6,89,41,504/- i.e. equivalent to the declared FOB value of the seized goods ii. Furnishing of Bank Guarantee of Rs.70,00,000/- with auto-renewal clause; and iii. Submission of an undertaking by the appellant that they will not dispute on quantity description and identity of the seized goods. 4. The said letter was challenged by the appellant in an appeal before the High Court of Delhi in WP (C) No.1274/2019 and vide order dated 6.2.2019, it was held, inter alia, that 2.4 It is open to the petitioner to approach the Commissioner with an appeal, within three days. The Commissioner shall decide the appeal at the earliest, preferably within two weeks form the date of receipt of the appeal in accordance with law. 5. The appellant, therefore, filed appeal before the Commissioner (Appeals), inter alia, submitting that Star Export House are exempted from imposition of any bank guarantee for provisional release of export goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , however, with the warning that the next date shall be the last opportunity for the appellant to make submissions in the appeal. Matter now be listed for hearing on 01.06.2023. 7. On the next date of hearing on 1.6.2023, a request was made by the learned counsel for the appellant to list the same on August 18, 2023. On the next date (18.08.2023) also none appeared for the appellant and hence, in terms of the earlier order, as quoted above, we are constrained to hear the matter ex parte. 8. Having heard the Authorised Representative for the Revenue and also perusing the grounds of appeal taken by the appellant in the present appeal, we reserved the order on 18.08.2023, with liberty to file written submissions within two weeks, however the appellant has not submitted any written arguments despite long gap of time and hence we are passing the present order considering the grounds taken in the memorandum of appeal. 9. The appellant herein is aggrieved by the conditions imposed on the provisional release of the impugned seized goods, particularly, the quantum of bond and the bank guarantee. 10. The appellant in the grounds of appeal apart from reiterating the grounds tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld come into play. However, there may be situations when the goods are to be detained for purpose of tests etc. to confirm the declaration. In such cases the endeavour should be to quickly undertake the necessary action (test / enquiry etc.) and take appropriate legal action thereafter so that the period of detention is kept to the minimum. Thus, the following course of action is prescribed in respect of goods entered for exportation: (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 goods along with furnishing an appropriate security in order to cover the redemption fine and penalty. (b) In case the export goods are either suspected to be prohibited or found to be prohibited in terms of the Customs Act, 1962 or ITC (HS), the same should be seized and appropriate action for confiscation and penalty initiated. (c) In case the export goods are suspected of misdeclaration or where declaration is to be confirmed and further enquiry / con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... faction, at the stage of provisional release, casts a duty on the authority, to consider, as to whether, there are prohibitions/restrictions in Customs Act, 1962, or any other law for the time being in force and whether he is bound to exercise his discretion, satisfying principles of fairness, reasonableness and whether, it is in accordance with the objects sought to be achieved. At the time of provisional release, it is also to be seen as to whether subjective satisfaction is based on valid materials, and not on whims and fancies of the authority. 95. Under the Customs Act, 1962, the authorities are duty bound to pass orders for confiscation, impose penalty, initiate prosecution and pending conclusion of the adjudicating proceedings, may order provisional release. At the time, when discretion is exercised under Section 110A and if any challenge is made under Article 226 of the Constitution of India, the twin test, to be satisfied is relevance and reason . Testing the discretion exercised by the authority, on both subjective and objective satisfaction, as to why, the goods seized, cannot be released, when smuggling is alleged and on the materials on record, we are of the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompetent authority have judiciously exercised the discretion, interalia observing : 5.4 From the above CBEC Circular, it is evident that quantum of the Bond to be executed for provisional release of the seized export goods should be equal to declared FOB value of the export goods. However, power to fix quantum of the bank guarantee has been entrusted to the competent authority, but as per the said Circular, the quantum of the bank guarantee should cover the probable redemption fine and penalties that may be imposed at the time of adjudication of the matter. 5.6. The Department also alleges the charge of overvaluation of the goods to wrongly avail MEIS benefit, which was not due in the first place. The export goods having been mis-declared and overvalued, appeared liable for confiscation under the Customs Act, 1962. Redemption fine is imposable under Section 125 ibid. Besides, penalties under Section 114 (iii) and Section 114 AA are also liable to be imposed for alleged fraud committed to unduly avail inadmissible/ineligible MEIS benefits. Penalties imposable are maximum upto five times the value of the export goods. Therefore, in my view, while deciding the quantum of Bank g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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