2019 (8) TMI 1541 - AT - Customs

Tribunal overturns order for excessive bank guarantees, emphasizes fairness in customs cases

Shri Prakash Shah, Proprietor: Mahavir Tools Corporation Versus Commissioner of Customs (Port), Kolkata

Shri Prakash Shah, Proprietor: Mahavir Tools Corporation Versus Commissioner of Customs (Port), Kolkata - TMI Issues:1. Provisional release of seized goods with conditions of submission of duty bond and bank guarantees.2. Consideration of application under Section 110A of the Customs Act.3. Excessive demand for bank guarantee without basis.4. Opportunity of hearing not provided by the Commissioner.5. Dispute over the value declared by the appellant for the goods.Detailed Analysis:1. The appeal was filed against an order for the seizure of goods by the Deputy Commissioner of Customs, which was conveyed by the Commissioner. The Commissioner allowed the release of the seized goods subject to conditions including the submission of a Provisional Duty Bond and Bank Guarantees for the re-determined value of the goods and the estimated differential duty amount. The appellant challenged this order, citing excessive demands for bank guarantees and lack of consideration for the actual import value.2. The order of the Commissioner was in response to a directive from the High Court to consider and decide the application under Section 110A of the Customs Act promptly. The High Court emphasized affording a reasonable opportunity of hearing to the petitioner and passing a reasoned order. The appellant was aggrieved by this order and appealed to the tribunal.3. The grounds raised in the appeal included objections to the excessive demand for bank guarantees, questioning the calculation of the differential duty without proper assessment, and arguing that identical goods had been released at the declared value by the appellant. The appellant contended that no transaction value for a higher amount was established, and the demanded bank guarantees were unjustified.4. The appellant also raised concerns about not being provided with an opportunity for a hearing by the Commissioner despite the High Court's direction. The appellant asserted that the declared value was accurate and should have been accepted without the need for additional bank guarantees.5. After hearing arguments from both parties, the tribunal found that the provisional release order did not provide sufficient grounds for demanding bank guarantees of a substantial amount. The tribunal noted discrepancies in the assessment process and lack of evidence supporting the need for such high bank guarantees. Ultimately, the tribunal directed the appellant to furnish a bond for provisional release backed by a reduced bank guarantee amount. The appeal was allowed on these terms, emphasizing fairness to both the appellant and the Revenue.