2022 (2) TMI 157 - HC - Customs

Court Orders Customs Commissioner to Release Consignment Promptly; Investigation Continues

The court directed the Joint Commissioner of Customs to quantify the duty and bond amounts and release the consignment within one week of the petitioner ... Provisional release under Section 110A of the Customs Act, 1962 - security by bond in place of bank guarantee for provisional release - quantification of duty and furnishing of bond as condition for release - release without prejudice to ongoing investigation and adjudication - balance of convenience in respect of perishable agricultural produce - waiver of demurrage and container detention charges to be governed by rulesProvisional release under Section 110A of the Customs Act, 1962 - quantification of duty and furnishing of bond as condition for release - Direction to provisionally release the seized consignment of black pepper on specified conditions mirroring the ratio in Al Qahir International - HELD THAT: - The Court held that the captioned petition is directly covered by earlier decisions (including the Division Bench order in Al Qahir International) and, applying the same reasoning, directed provisional release of the seized consignment. The release is conditioned on the Customs authority quantifying the customs duty and bond amounts, communicating the same to the importer, and release of the goods within one week of remittance of the quantified duty and execution of the required bond. The Court noted the identical factual matrix and followed the precedent ratio without expressing any view on the merits of allegations underlying seizure. The balance of convenience in favour of release was also recognised given the commodity's perishable nature.The Joint Commissioner of Customs to quantify duty and bond amounts, communicate them to the petitioner, and release the consignment within one week of remittance/execution of bond.Security by bond in place of bank guarantee for provisional release - provisional release under Section 110A of the Customs Act, 1962 - Form of security for provisional release as settled by the Division Bench in Al Qahir International - HELD THAT: - The Court accepted the Division Bench modification in Al Qahir International whereby the Single Judge's requirement of furnishing a bank guarantee was modified to permit execution of a bond to the same value. Applying that modification, the Court directed release on execution of bond (and not insisting on a bank guarantee), while ensuring adequate security for potential interest, penalty or charges.A bond to the quantified value will suffice as security for provisional release in place of a bank guarantee.Release without prejudice to ongoing investigation and adjudication - Provisional release does not impede or influence the ongoing investigation or adjudicatory process - HELD THAT: - The Court made it explicit that the order for provisional release would not inhibit independent inquiry; show-cause notices and adjudication proceedings may continue and reach their own conclusion uninfluenced by the release order. The Court refrained from expressing any opinion on the merits of the allegations that led to seizure.Adjudication and investigation to proceed to their logical end independently; the release order is without prejudice to such processes.Waiver of demurrage and container detention charges to be governed by rules - Claim for waiver of demurrage and container detention charges left open for consideration by the authorities under applicable regulations - HELD THAT: - Consistent with earlier orders relied upon, the Court declined to direct waiver itself and left the issue of demurrage and container detention waiver to be pursued and decided by the competent authorities in accordance with the relevant rules and regulations.The question of waiver of demurrage and container detention charges is to be decided by the authorities in accordance with applicable rules and regulations.Final Conclusion: Writ petition disposed by directing provisional release of the seized black pepper consignment on payment of quantified duty and execution of bond (bond substituting for bank guarantee as per Division Bench precedent), with release without prejudice to ongoing investigation and adjudication; the issue of waiver of demurrage/ detention charges left to authorities under applicable rules; no order as to costs. Issues Involved:1. Import of Black Pepper of Sri Lankan origin.2. Seizure of consignment on alleged grounds of overvaluation.3. Provisional release of consignment under Section 110A of the Customs Act, 1962.4. Allegation of circumventing Minimum Import Price (MIP) notification.5. Compliance with previous judicial orders for provisional release.Detailed Analysis:1. Import of Black Pepper of Sri Lankan Origin:The matter pertains to the import of Black Pepper from Sri Lanka, specifically involving a consignment of 30120.00 kilograms. The petitioner filed a Bill of Entry dated 13.07.2021 for home consumption. The consignment was later seized by customs authorities, which led to the petitioner seeking its release under Section 110A of the Customs Act, 1962.2. Seizure of Consignment on Alleged Grounds of Overvaluation:The consignment was seized on the grounds that the invoices were allegedly overvalued to circumvent the Minimum Import Price (MIP) of Rs. 500 per kilogram, as stipulated by the Directorate General of Foreign Trade (DGFT) notification No. 21/2015-2020 dated 25.07.2018. The petitioner was summoned under Section 108 of the Customs Act to provide various documents, which were duly submitted. Despite this, the consignment was not released, prompting the petitioner to make representations and eventually seek judicial intervention.3. Provisional Release of Consignment under Section 110A of the Customs Act, 1962:The court referred to several previous orders directing the provisional release of similar consignments under Section 110A of the Customs Act. Notably, the court cited the case of M/s. Travancore Solvents & Oils, where provisional release was ordered under certain conditions. The court emphasized that the issue of provisional release was no longer res integra, as similar consignments had been released following judicial orders.4. Allegation of Circumventing Minimum Import Price (MIP) Notification:The crux of the Revenue's argument was that the invoices were overvalued to circumvent the MIP notification. The court noted that the issue of provisional release had been addressed in previous cases, where similar allegations were made. The court also considered the Board Circulars and previous Division Bench orders cited by the Revenue but found them distinguishable on facts.5. Compliance with Previous Judicial Orders for Provisional Release:The court observed that previous orders for provisional release, including those in the cases of M/s. Global Metro and M/s. Southern Trade Links, had been complied with by the Revenue. The court noted that the factual matrix in the current case was identical to that in the Al Qahir International case, where a Division Bench had directed the release of goods on execution of a bond instead of a bank guarantee.Conclusion:The court directed the Joint Commissioner of Customs to quantify the duty and bond amounts and release the consignment within one week of the petitioner fulfilling these requirements. The court clarified that the ongoing investigation and adjudication could proceed independently and that no opinion was expressed on the merits of the allegations. The issue of waiver of demurrage charges was left open to be pursued according to applicable rules and regulations. There was no order as to costs.