Release of seized goods on B-11 bond and advance duty deposit, without insistence on bank guarantee, was upheld.

Goods seized by the department were directed to be released on deposit of duty in advance and furnishing of a B-11 bond, because insistence on a bank guarantee or cash security equivalent to 25% of value was not warranted for release. The High Court relied on an earlier ruling allowing release on terms identical to Form B-11 and noted that delay in furnishing the demanded security had caused deterioration of part of the goods. The department was left free to proceed in accordance with law on any alleged duty evasion, but it could not insist on the additional bank guarantee as a condition for release.

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Issues: Whether the petitioner was required to furnish a bank guarantee or cash security for release of goods seized by the department, and whether the goods could be released on furnishing of B-11 bond and payment of duty in advance.

Analysis: The writ petition challenged the departmental communication insisting on cash security or bank guarantee equivalent to 25% of the value of the goods in addition to B-11 bond. The Court noted that part of the seized goods had deteriorated because the petitioner was unable to furnish the demanded security. Relying on the earlier decision permitting release of goods on terms identical to Form B-11 without bank guarantee or cash security, the Court modified the departmental directions and held that the department could proceed in accordance with law for any alleged evasion of duty, but insistence on bank guarantee was not warranted for release of the seized goods.

Conclusion: The petitioner was entitled to release of the seized goods on deposit of duty in advance and furnishing of B-11 bond towards future final penalty, and the department was not entitled to insist on bank guarantee of 25% of the value of the goods.

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