Provisional release security conditions must be proportionate; excessive bank guarantee for seized imported goods was modified.

Provisional release of seized imported goods depended on a fact-specific security condition, and the Board circular was treated as guiding discretion rather than fixing an inflexible requirement. Because the goods were seized on a prima facie undervaluation allegation and the investigation remained pending, the bank guarantee requirement was found disproportionate to the differential duty involved. The security condition was therefore modified: the importer was directed to execute a bond for 100% of the value of the goods and furnish a bank guarantee for 100% of the differential duty amount.

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Issues: Whether the condition of furnishing bank guarantee of Rs. 1.60 crore for provisional release of the seized imported goods was excessive and liable to be modified.

Analysis: The goods were seized on a prima facie allegation of undervaluation and the investigation was still pending. The security condition for provisional release must depend on the facts of each case, and the Board circular only provides guidelines while leaving discretion to the competent authority to increase or decrease the security. In the present case, the amount of bank guarantee fixed was found to be disproportionate to the differential duty involved, and the ends of justice required a lesser security condition.

Conclusion: The condition for provisional release was modified by directing execution of bond for 100% of the value of the goods and furnishing bank guarantee for 100% of the differential duty amount.

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