Provisional release of seized goods on reasonable security allowed; cash security not required where alternative security is adequate.

Where taxability of seized goods was not finally determined, provisional release on reasonable security was appropriate, and cash security was not mandatory if adequate alternative security was available. The Tribunal had already reduced the security requirement from forty per cent cash security to six per cent, and that reduced level was treated as sufficient. The taxability issue was left to be decided by the assessing authority at the assessment stage, while the goods were directed to be released on furnishing security of six per cent of value, including security other than cash or bank guarantee.

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Issues: Whether the seized goods were entitled to release on furnishing security, and whether cash security at six per cent of the value of the goods was .

Analysis: The question of taxability of the commodity was held to be more appropriately determined by the assessing authority at the assessment stage. The Tribunal had already reduced the security requirement from forty per cent cash security to six per cent. In the circumstances of the case, release of the goods on security was found appropriate, but insistence on cash security was considered unnecessary.

Conclusion: The goods were directed to be released on furnishing security at six per cent of their value, and such security could be other than cash or bank guarantee.

Final Conclusion: The revision was allowed to the limited extent of modifying the mode and nature of security for release of the goods, while leaving the question of taxability open for determination at the appropriate stage.

Ratio Decidendi: Where taxability of seized goods is not finally determined, the goods may be released provisionally on reasonable security, and cash security need not be insisted upon if adequate alternative security is available.

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