2015 (5) TMI 524 - AT - Customs

Tribunal upholds 15% Bank Guarantee for goods release, citing non-cooperation and overvaluation.

The Tribunal upheld the Commissioner's decision to maintain the Bank Guarantee at 15% of the declared value of goods for provisional release, rejecting ... Confiscation of goods - provisional release of goods - Furnishment of bank guarantee - whether the conditions imposed for withdrawal of seized goods attempted to export and for probable imposition of fine and penalty are harsh and arbitrary - Held that:- In the present case, overvaluation of 500% has been alleged. Further, no provisional assessment is resorted. It is observed that the appellant have not been co-operating with the department and have been avoiding summons and have not provided necessary information required to process the case. Once attempt to export is made after gross overvaluation and later appellant have come forward to withdraw consignments, intention to defraud revenue are prima facie indicated. It is further observed that the Commissioner (Appeals) has already taken excessive lenient view and has reduced bank guarantee from 25% of the FOB value of the goods to 15% of the FOB value of the goods. In these circumstances, there is no justification to consider any further modification relating to furnishing of Bank Guarantee. In the circumstances when consignment has been allowed to be withdrawn, reduction in bank guarantee was not justified. Since over valuation of attempted export is alleged, sufficient security has to be ensured for imposition of sufficient fine an penalty to discourage this type of attempt. - no force in appellant's request to further modify of Commissioner (Appeals)'s order - Decided ahainst assessee. Issues:1. Reduction of Bank Guarantee for provisional release of seized goods.2. Request for withdrawal of consignment and imposition of bank guarantee.3. Allegations of mis-declaration and overvaluation of goods.4. Non-cooperation with the investigation and justification for bank guarantee.5. Applicability of relevant judgments and circulars.Analysis:1. The appellant appealed against the Order-in-Appeal reducing the Bank Guarantee from 25% to 15% of the declared value of goods for provisional release. The Commissioner (Appeals) accepted the request for withdrawal of consignment, leading to the appeal to the Tribunal for further reduction of the Bank Guarantee.2. The appellant argued that the conditions imposed were contradictory as withdrawal of consignment was allowed, questioning the need for a bank guarantee. The Commissioner (Appeals) was criticized for not justifying the imposition of a bank guarantee equal to 25% of the FOB value of goods for provisional release.3. The case involved allegations of mis-declaration and overvaluation of goods for export to defraud revenue. The appellant's non-cooperation with the investigation, including failure to respond to summons and provide necessary documents, indicated ill intent. The revenue contended that the overvaluation was to claim higher drawback and evade foreign exchange regulations.4. The Tribunal noted the gravity of the alleged violations, including a 500% overvaluation of goods, and the appellant's lack of cooperation with the investigation. The Commissioner (Appeals) was criticized for being excessively lenient in reducing the Bank Guarantee and was deemed to have not fully appreciated the seriousness of the situation.5. Reference was made to relevant judgments and circulars, but the Tribunal found them inapplicable to the present case due to the significant overvaluation and lack of cooperation. The Tribunal upheld the Commissioner (Appeals)'s order, rejecting the appellant's request for further modification and emphasizing the need for sufficient security to deter fraudulent attempts.This comprehensive analysis covers the issues raised in the legal judgment, detailing the arguments presented by both parties and the Tribunal's reasoning for the final decision.