Origin verification and provisional clearance: goods should be released on indemnity bond, not bank guarantee, while customs verification continues.

Customs origin verification under the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 is explained as a case where no specific deficiency was communicated to the importer and the dispute concerned continued withholding of preferential duty clearance. On that factual footing, the verification was treated as closer to random origin verification than non-furnishing of required information. The note states that goods should not be kept from release indefinitely on insistence upon a bank guarantee where an indemnity bond can secure the differential duty, while the revenue's right to complete verification and recover any shortfall remains protected. Clearance was therefore to be allowed against an indemnity bond, with the importer free to contest the assessment in accordance with law.

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Issues: Whether the customs authorities' verification of the certificate of origin was a random verification under the origin-rules framework or a verification for non-furnishing of required information, and whether the imported goods could be withheld without insisting on a bank guarantee while assessment remained unresolved.

Analysis: The dispute turned on the character of the verification initiated by the customs authorities under the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. On the material placed, no specific deficiency had been put to the importer for rectification, and the communication disclosed only that preferential duty was being withheld until doubt regarding the country of origin certificate was resolved. That factual position aligned more closely with random verification under the rules, rather than a case where the importer had failed to furnish the requisite information. In that setting, the governing circulars and instructions on provisional clearance indicated that release of goods should not be stalled indefinitely on the insistence of a bank guarantee, particularly where the importer was prepared to secure the differential duty by an alternative undertaking. The proper course was to permit clearance against an indemnity bond, while preserving the revenue's right to complete verification and recover any differential duty found payable.

Conclusion: The goods were directed to be released on furnishing of an indemnity bond for the differential duty, without requiring a bank guarantee, and the importer was left free to challenge the assessment in accordance with law.

Final Conclusion: The petition succeeded to the extent that the customs authorities were required to clear the goods on a less onerous security arrangement while continuing their verification, thereby protecting both the importer's right to immediate release and the revenue's right to recover any shortfall.

Ratio Decidendi: Where origin-verification remains inconclusive and no specific deficiency has been communicated to the importer, the goods may be released on an indemnity bond for the differential duty instead of insisting on a bank guarantee.

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