Customs provisional release conditions cannot override quasi-judicial discretion; universal bank guarantee requirement was struck down.

An administrative customs circular cannot fetter the statutory discretion of a quasi-judicial authority by mandating, in every case, a bank guarantee equal to the differential duty for provisional release of imported goods. That instruction was held unsustainable to that extent and was not to be given effect. Provisional release was nevertheless permitted on modified conditions balancing revenue protection and clearance rights, including a bond for the full value of the goods, a reduced bank guarantee for the differential duty, auto-renewal, and compliance with RBI guidelines.

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Issues: (i) Whether the customs alert circular could compel the quasi-judicial authority to insist in all cases on a bank guarantee equivalent to the differential duty for provisional release of imported goods; (ii) whether the petitioner was entitled to provisional release of the goods on conditions less onerous than those insisted upon by the authorities.

Issue (i): Whether the customs alert circular could compel the quasi-judicial authority to insist in all cases on a bank guarantee equivalent to the differential duty for provisional release of imported goods.

Analysis: The circular was examined only to the extent that it removed or restricted the discretion of the authority empowered under the Customs Act, 1962 to decide provisional release on appropriate conditions. A direction that, in every case, the authority must insist on a bank guarantee for the differential duty was held to be an impermissible fetter on quasi-judicial discretion.

Conclusion: The circular, to that extent, was held unsustainable and was directed not to be given effect to.

Issue (ii): Whether the petitioner was entitled to provisional release of the goods on conditions less onerous than those insisted upon by the authorities.

Analysis: Following the earlier order relied upon by the Court, the goods were permitted to be provisionally released on terms that balanced revenue protection with the petitioner's right to clearance. The Court fixed the conditions by requiring a bond for the full value of the goods and a bank guarantee for a reduced percentage of the differential duty, together with auto-renewal and compliance with RBI guidelines.

Conclusion: Provisional release was allowed on the modified conditions directed by the Court.

Final Conclusion: The petitioner obtained provisional release of the imported goods, and the administrative instruction insisting on a universal bank guarantee for the full differential duty was invalidated to that extent.

Ratio Decidendi: An administrative circular cannot curtail the statutory discretion of a quasi-judicial customs authority by mandating the same condition in every case for provisional release of goods.

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