Court deems release conditions excessive, orders goods released upon bond and bank guarantee. The Court found the conditions imposed by the second respondent for provisional release of goods to be arbitrary and excessive. It directed that the goods ...
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Court deems release conditions excessive, orders goods released upon bond and bank guarantee.
The Court found the conditions imposed by the second respondent for provisional release of goods to be arbitrary and excessive. It directed that the goods be released to the petitioner upon executing a bond for the entire differential duty and providing a bank guarantee representing 30% of the differential duty. The guarantee was to be maintained until the adjudication proceedings and for 8 weeks thereafter. The petitioner agreed to respond to the show cause notice and participate in the adjudication process. The writ petition was disposed of with no costs, modifying the provisional release order accordingly.
Issues: Grant of provisional release of goods pending adjudication under Section 110-A of the Customs Act, 1962.
Analysis: The petitioner, a government-recognized Star Export House, was granted an import entitlement based on an export certificate for 2013-14. The petitioner received a purchase order for Men's Jacket with Lining and imported Knitted Fabric Polyester Lining. A bill of entry was filed, and an import certificate was issued. The petitioner applied for provisional release of the goods, which was granted subject to certain conditions by the second respondent.
The petitioner challenged the conditions imposed for provisional release, arguing that the requirement of furnishing a bank guarantee well in excess of 100% of the determined value of the goods was unreasonable. The Department contended that a notice to show cause had been issued to the petitioner, and the petitioner's failure to appear for a personal hearing was highlighted.
The Court observed that the issuance of a notice to show cause does not debar the petitioner from seeking provisional release of the goods. Section 110-A of the Customs Act, 1962 allows for provisional release pending adjudication upon furnishing a bond with security as required by the adjudicating authority. The Court considered the petitioner's export performance and import entitlement, referencing a Supreme Court order where provisional release was subject to a bank guarantee representing 30% of the differential duty.
In light of the circumstances, the Court found the conditions imposed by the second respondent to be arbitrary and excessive. The Court directed that provisional release be granted to the petitioner upon executing a bond for the entire differential duty and furnishing a bank guarantee of a nationalized bank representing 30% of the differential duty. The guarantee was to be kept alive pending adjudication proceedings and for 8 weeks thereafter, with the goods to be released promptly upon compliance. The petitioner agreed to respond to the show cause notice and participate in adjudication proceedings.
Consequently, the writ petition was disposed of with no costs imposed, modifying the order for provisional release as per the Court's directions.
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