High Court clarifies: Section 124 Customs Act doesn't bar provisional release. Adjudicating authority has discretion

The High Court of Bombay clarified that the pendency of proceedings under section 124 of the Customs Act, 1962 does not prevent the consideration of applications for provisional release under section 110A. The court emphasized the discretionary power of the adjudicating authority to allow provisional release and directed timely decisions on the petitioners' representations for release of the seized goods. The judgment granted liberty to the adjudicating authority to continue proceedings under section 124 while instructing consideration of the petitions for provisional release within three weeks, with no order for costs.

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Issues:
1. Consideration of application for provisional release during the pendency of proceedings under section 124 of the Customs Act, 1962.

Analysis:
The judgment by the High Court of Bombay involved multiple writ petitions concerning the seizure of cut and polished diamonds intended for export. The petitioners sought provisional release of the seized goods, but instead received show-cause notices under section 124 of the Customs Act, 1962. The petitioners' replies to these notices were disputed, leading to further representations for provisional release under section 110A of the Act. The central issue before the court was whether an application for provisional release could be considered during the pendency of proceedings under section 124 of the Act.

The court examined the relevant statutory provisions, particularly sections 110 and 110A of the Customs Act. Section 110 empowers the seizure of goods liable for confiscation, with a provision for return if no notice under section 124 is issued within six months. The second proviso to sub-section (2) of section 110 allows for provisional release, overriding the six-month period. Section 110A, introduced in 2006, permits provisional release pending adjudication, emphasizing the discretion of the adjudicating authority in imposing conditions.

The court concluded that the adjudicating authority retains the discretion to allow provisional release even during proceedings initiated under section 124 of the Act. This interpretation aligns with the legislative intent behind section 110A, granting the authority the power to decide on provisional release conditions. The judgment disposed of the writ petitions, granting liberty to the adjudicating authority to continue proceedings under section 124 while directing consideration of the petitions for provisional release. The court instructed a timely decision on these representations within three weeks of the order, keeping all contentions on the merits open and making no order for costs.

In summary, the High Court of Bombay clarified that the pendency of proceedings under section 124 does not bar the consideration of applications for provisional release under section 110A. The judgment emphasized the discretionary power of the adjudicating authority in allowing provisional release and directed timely decisions on the petitioners' representations for release of the seized goods.

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