2011 (3) TMI 470 - HC - Central Excise

Court grants release of containers upon duty payment; refrains from ruling on seizure validity.

ELITE IMPEX Versus UNION OF INDIA

The court ruled in favor of releasing 20 containers upon full duty payment and the remaining 12 containers upon full duty payment and bond submission as ... Seizure - notification No. 26/2000 dated 1-3-2000 - Misdeclaration - Since the petitioners require release of the goods provisionally on certain terms and conditions as permitted under the Customs Act, the petitioners pressed for such release with the Authority - On the condition that petitioners pay full import duty, if they so chose, under protest, such goods can be cleared subject to further proceedings between the parties - 20 containers of the petitioners covered under seizure panchnama dated 1-2-2011 shall be released provisionally on petitioners paying full import duty Regarding 12 Containers - Held that: it would be open for the Customs Authorities to insist that the petitioners pay full import duty and also give bond for the entire amount of value of the goods, 25% of which may be in form of bank guarantee as envisaged in circular No. 686/2/2003 dated 2-1-2003 - when the past clearances have not been reopened either by issuance of show cause notice or any other mode envisaged under the Customs Act and Rules thereunder, merely on the ground that in the present case, department has reason to believe that there are mis-declarations, to permit them to impose additional conditions covering past consignments would not be possible - 12 containers of the petitioners covered under seizure panchnama dated 4-1-2011 shall be released on petitioners paying full import duty and giving bond for full amount of value of goods including 25% bank guarantee as provided in circular No. 686/2/2003 dated 2-1-2003 - Appeal is disposed of Issues:Challenge to action of Custom Authorities in seizing goods; Dispute over origin of goods and duty exemption; Conditions imposed for release of seized goods; Legality of seizure and mis-declaration.Analysis:1. Challenge to Custom Authorities' Action: The petitioners contested the Custom Authorities' seizure of 32 containers of betel-nuts at Kandla port, challenging the order to release the goods under certain conditions. Past imports of betel-nuts declared as originating from Srilanka had been exempt from import duty without issue, but the current consignments faced doubts regarding their origin, leading to the seizure.2. Dispute Over Origin and Duty Exemption: The Customs Department questioned the origin of the betel-nuts in the current consignments, alleging they were from Indonesia and Singapore, not Srilanka as declared. This discrepancy led to the seizure of 12 containers initially, with an additional 20 containers arriving later. The petitioners, under controversy, opted not to claim duty exemption for the latter 20 containers, seeking clearance on payment of full duty under protest.3. Conditions for Release of Seized Goods: The Custom Authorities, through an order, agreed to release all 32 containers provisionally upon payment of full Customs Duty, execution of a PD Bond for the goods' value, and a bank guarantee of Rs. 3 crores. The petitioners argued these conditions were unjust and excessive, citing a circular for provisional release guidelines that required a lesser bank guarantee amount.4. Legality of Seizure and Mis-declaration: The petitioners contended that the seizure of the 20 containers was unwarranted as they were willing to pay full duty under protest, without seeking exemption. They argued against the imposition of additional conditions based on past clearances without formal proceedings or show cause notices. The court ruled in favor of releasing the 20 containers without extra conditions but allowed for bond requirements for the remaining 12 containers, emphasizing the ongoing adjudication stage and the need for due process.5. Conclusion: The judgment directed the provisional release of the 20 containers upon full duty payment and the release of the remaining 12 containers upon full duty payment and bond submission as per the circular guidelines. The court modified the impugned order accordingly, refraining from ruling on the validity of the seizure in light of the provided directions and the ongoing legal proceedings.