2011 (2) TMI 212 - HC - Customs

Court Orders Release of Imported US Apples with 30% Duty, Bond

The Court orders the release of imported apples from the United States, subject to payment of 30% differential duty and furnishing a bond, considering the ... Provisional assessment and release of imported goods - valuation based on contract price/transaction value - perishability and prejudice from detention - provisional release on security and partial cash deposit - investigation and adjudication to followProvisional assessment and release of imported goods - perishability and prejudice from detention - provisional release on security and partial cash deposit - investigation and adjudication to follow - Whether the detained consignments of perishable imported apples should be released provisionally despite allegations of undervaluation and ongoing investigation, and on what conditions. - HELD THAT: - The Court observed that the respondents had not shown that the present case was materially different from prior matters in which provisional release had been ordered. While the respondents relied on information from the Consulate General suggesting undervaluation and parallel invoicing, the Court balanced those allegations against the perishable nature of the goods and the likely commercial prejudice to the importer from continued detention. Having regard to earlier orders in similar facts and the absence of a distinct basis to refuse provisional relief, the Court held that provisional release was appropriate subject to protective conditions. The Court directed release upon payment of 30% of the differential duty by way of cash deposit and furnishing of a personal bond for the balance, while expressly preserving the respondents' statutory right to complete adjudication, recover any further duty found due, and initiate proceedings if evasion is established. The petitioner was also directed to cooperate in the assessment proceedings. [Paras 9, 10, 11, 12]Detained consignments to be released forthwith on payment of 30% of differential duty and furnishing a personal bond for the balance; respondents free to complete adjudication and take further action in accordance with law.Final Conclusion: Writ petition allowed; provisional release of perishable imported goods ordered on specified conditions, with liberty to the customs authorities to complete adjudication and initiate proceedings if undervaluation or duty evasion is established. Issues:Import of apples from the United States, provisional assessment and release of goods, alleged undervaluation and evasion of customs duty, delay in releasing perishable goods, legality of provisional clearance under Customs Act.Analysis:The petitioner, engaged in fruit trading, imports apples from the United States under valid contracts and has Importer Exporter Code. The goods are perishable, imported through Chennai Seaport, duly assessed by customs. The petitioner requested provisional assessment for two consignments pending assessment, seeking release by depositing 30% differential duty as cash and 70% by bond, as per Customs Act and Regulations.The petitioner argues that the contract price should be accepted unless proven inappropriate, highlighting past compliance and pending duty payment. Delays in assessment risk financial losses and breach of contractual obligations. Respondents are urged to clear goods promptly or face additional duty imposition for irregularities found later.Respondents allege undervaluation based on information from the Consulate General, suspecting misdeclaration and evasion of significant customs duty. A show cause notice was issued, and goods were detained pending investigation. Discrepancies in unit prices between invoices and market rates suggest duty evasion worth crores.The Court notes past orders for provisional release of goods in similar cases and finds the present petition not substantially different. Considering the perishable nature of goods, the Court orders release upon payment of 30% differential duty and furnishing a bond. Respondents are allowed to finalize duty assessment and take legal action if evasion is proven.In conclusion, the Court directs the release of goods upon fulfilling specified conditions, emphasizing cooperation in duty assessment proceedings. The writ petition is granted without costs, aligning with previous orders for provisional release of detained goods in similar circumstances.