Provisional release of seized goods requires proportionate conditions that protect Revenue without unduly burdening importers.

Section 110A of the Customs Act authorises provisional release of seized goods on bond, security and other conditions, but those conditions must be proportionate and must protect the Revenue without imposing an unduly onerous burden on the importer. The Madras HC found that a personal bond for the full value of the goods, a bank guarantee of Rs. 1.70 crores and payment of differential duty were excessive in the circumstances, even though the Revenue's interest had to be safeguarded pending adjudication. The Court therefore modified the release conditions and directed compliance with revised terms for provisional release.

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Issues: Whether the conditions imposed for provisional release of seized imported goods under Section 110A of the Customs Act were onerous and required modification.

Analysis: Section 110A permits release of seized goods pending adjudication on such bond, security and conditions as may be required, but the power must balance the importer's interest with protection of the Revenue. The conditions imposed, namely a personal bond for the full value of the goods, a bank guarantee of Rs. 1.70 crores and payment of differential duty, were found to be excessive in the circumstances. The respondent's basis for the bank guarantee was linked to possible redemption fine and penalty during adjudication, but the Court held that the Revenue's interest could be safeguarded by a lesser and more proportionate condition. Accordingly, the release conditions were modified.

Conclusion: The impugned conditions were modified and the petitioner was directed to comply with revised conditions for provisional release of the goods.

Ratio Decidendi: Conditions for provisional release of seized goods must be proportionate and must secure the Revenue without imposing an unduly onerous burden on the importer.

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