Provisional release of export-bound warehoused goods allowed on bond where detention lacked a strong prima facie basis.

Warehoused goods intended exclusively for export may be provisionally released where the importer shows export orders, part payment, and no strong prima facie basis for continued detention. Pending investigation and conflicting test reports did not justify indefinite withholding because export consignments should not be obstructed where re-export of warehoused goods is permitted under the Foreign Trade Policy and Handbook of Procedure. The safeguard was execution of a bond for the full value of the goods, and release was ordered without payment of duty, fine or penalty. Any request for demurrage waiver was left for consideration by the competent authority in accordance with law.

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Issues: Whether seized warehoused goods, intended exclusively for export, were liable to be provisionally released pending investigation and whether ancillary relief concerning demurrage could be granted.

Analysis: The goods were found to have been imported and warehoused for export, supported by existing export orders and part payment. In that setting, continued withholding of the export consignment was inconsistent with the Foreign Trade Policy and the Handbook of Procedure, which recognize free passage of export consignments and permit re-export of warehoused goods without payment of customs duty on compliance with the prescribed procedure. The pending investigation and conflicting test reports did not justify indefinite detention, and the department had not established a sufficient prima facie basis to deny provisional release. The appropriate safeguard was execution of a bond for the full value of the goods, while the request for demurrage waiver was left to the competent authority to consider in accordance with law.

Conclusion: The goods were directed to be provisionally released for export on execution of a bond for the full value of the goods, without payment of duty, fine or penalty, and the assessee was permitted to seek consideration of demurrage waiver in accordance with law.

Ratio Decidendi: Where warehoused goods are shown to be meant for export and no strong prima facie basis exists to justify continued detention, provisional release may be ordered on execution of an adequate bond so that export is not obstructed pending investigation.

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