Movement of goods for repair may justify release; detention and levy on a sale-only theory were rejected.

Detention of goods and levy of tax and compounding fee were found unsustainable where the movement was stated to be for repair and not a sale. The authority had accepted that no sale was involved, and physical verification showed matching IMEI numbers. The view that goods could move only on a sale or branch transfer was rejected as untenable because movement for repair also constitutes movement of goods. Due to the prolonged detention, the Court ordered conditional deposit and immediate release of the goods, while leaving the challenge to the tax and compounding fee open in appropriate proceedings.

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Issues: Whether the detention of the goods and the levy of tax and compounding fee were sustainable where the movement of the goods was claimed to be for repair and not by way of sale.

Analysis: The respondent accepted in the impugned order that no sale was involved in the movement of the goods. The physical verification had also established matching IMEI numbers. The reasoning that goods could move only pursuant to a sale or branch transfer was found to be untenable, since movement for repair also falls within the concept of movement of goods. In view of the prolonged detention, the Court directed a conditional deposit and immediate release of the goods, while preserving the petitioner's right to challenge the levy.

Conclusion: The petitioner was granted conditional release of the detained goods, and the challenge to the tax and compounding fee was left open to be pursued in appropriate proceedings.

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