Tribunal overturns order denying release of seized goods, citing discrimination and improper classification.

The Tribunal allowed the appeal, setting aside the Principal Commissioner's order that denied the provisional release of seized high-end wristwatches and cash. The Tribunal found the order to be unsustainable due to a discriminatory approach and improper classification of the goods as "prohibited." It directed the release of the goods and cash upon the appellant depositing the remaining balance of the duty proposed within 30 days.

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Issues Involved:
1. Rejection of provisional release of seized goods.
2. Discretionary power of adjudicating authority under Section 110A of the Customs Act.
3. Comparison with other cases of provisional release of similar goods.
4. Classification of seized goods as "prohibited goods."
5. Impact of judicial precedents and previous court orders on the case.

Detailed Analysis:

1. Rejection of Provisional Release of Seized Goods:
The appellant challenged the Principal Commissioner's order dated 11.09.2020, which denied the provisional release of seized high-end wristwatches and cash. The appellant argued that the order was predetermined and mechanical, ignoring the facts of the case. The appellant had deposited a substantial amount of the duty demanded and was willing to deposit the remaining amount under protest. The Principal Commissioner, however, rejected the application, citing various reasons, including the discretionary nature of Section 110A of the Customs Act and the classification of the goods as "prohibited."

2. Discretionary Power of Adjudicating Authority under Section 110A of the Customs Act:
Section 110A of the Customs Act allows the provisional release of seized goods pending adjudication. The adjudicating authority has discretionary power to decide on such applications, considering the facts and circumstances of each case. The Madras High Court in P. Pandithurai vs. Joint Commissioner of Customs emphasized that this discretion must be exercised in a manner known to law, and an opportunity of being heard should be provided. The Delhi High Court in Mala Petrochemical & Polymers vs. The Additional Director General, DRI highlighted that each case must be judged on its peculiar facts.

3. Comparison with Other Cases of Provisional Release of Similar Goods:
The appellant pointed out that high-end wristwatches seized from other parties, including M/s. Johnson Watch Co. Pvt. Ltd., Purushottam Jajodia, and Pankaj Lakhani, were released either on the basis of undertakings or court orders. The Principal Commissioner did not consider this aspect, leading to a discriminatory approach. The Tribunal in Gauri Enterprises vs. Commissioner of Customs held that the adjudicator cannot be selective in its approach to similar goods, emphasizing the need for consistent treatment.

4. Classification of Seized Goods as "Prohibited Goods":
The Principal Commissioner classified the seized goods as "prohibited goods" liable for confiscation under Section 111(d) of the Customs Act. However, the Tribunal found that this classification was inconsistent with the treatment of similar goods seized from other parties. The Delhi High Court in Its My Name Pvt. Ltd. case clarified that both prohibited and non-prohibited goods could be released under Section 110A, and the mere possibility of future confiscation should not bar provisional release.

5. Impact of Judicial Precedents and Previous Court Orders on the Case:
The Principal Commissioner relied on the stay order granted by the Supreme Court in the case of Purushottam Jajodia to reject the appellant's application. However, this stay order was later modified to allow the release of goods. The Delhi High Court in Its My Name Pvt. Ltd. emphasized that provisional release does not interfere with the adjudication process and that reliance on allegations in the show cause notice to deny provisional release is improper.

Conclusion:
The Tribunal concluded that the Principal Commissioner's order was not sustainable due to the discriminatory approach and improper classification of the goods. The Tribunal directed that the goods and cash be released, subject to the appellant depositing the remaining balance of the duty proposed in the show cause notice within 30 days. The appeal was allowed, and the impugned order dated 11.09.2020 was set aside.

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