Tribunal Orders Release of Seized Dry Dates with Bond & Guarantee

The tribunal allowed the provisional release of the seized dry dates upon execution of a bond for 100% of the goods' value and a bank guarantee of Rs. 1 crore, with payment of applicable duty for UAE-origin goods. The tribunal found the Rs. 12 crore bank guarantee condition excessive, emphasizing fairness in conditions for provisional release. It noted the perishable nature of the goods and the ongoing adjudication of mis-declaration and duty evasion allegations. The decision was limited to release terms and would not affect the investigation. The appeal was allowed under these conditions.

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Issues Involved:

1. Dispute over the country of origin of imported goods.
2. Reasonableness of conditions imposed for provisional release of seized goods.
3. Provisional release of perishable goods.
4. Adjudication of alleged mis-declaration and evasion of customs duty.

Detailed Analysis:

1. Dispute over the country of origin of imported goods:
The primary issue in this case is whether the imported dry dates are of UAE origin as declared by the importer or of Pakistani origin as alleged by the Department of Revenue Intelligence (DRI). The DRI's contention is based on the presence of bags bearing the name of a Pakistani company. However, the appellant argues that only a few bags had such markings and that these were reused bags, while the dates themselves were produced in the UAE. The tribunal noted that not all bags bore the name of a Pakistani company and that the documents submitted by the appellant indicated UAE origin. The tribunal concluded that the final determination of the country of origin would depend on the ongoing investigation and adjudication process.

2. Reasonableness of conditions imposed for provisional release of seized goods:
The appellant challenged the condition requiring a bank guarantee or cash deposit of Rs. 12 crores for the provisional release of the seized goods. The tribunal examined Section 110A of the Customs Act, 1962, which allows for the provisional release of seized goods pending adjudication, subject to the execution of a bond and security as required by the Commissioner of Customs. The tribunal emphasized that the discretion exercised by the adjudicating authority must be fair and reasonable. Citing precedents such as *Spirotech Heat Exchangers Pvt. Ltd. v. Union of India* and *Kundan Rice Mills Ltd.*, the tribunal found that the condition of a Rs. 12 crore bank guarantee was excessively harsh and contrary to established legal principles.

3. Provisional release of perishable goods:
The tribunal recognized that the imported dry dates are perishable and have been stored in a warehouse for almost a year, leading to a decrease in their market value. The tribunal noted that various forums have consistently held that perishable goods should be released expeditiously. In light of this, the tribunal found that leniency should be applied in setting the conditions for the provisional release of the goods.

4. Adjudication of alleged mis-declaration and evasion of customs duty:
The tribunal clarified that the question of whether the appellant mis-declared the country of origin and evaded customs duty would be adjudicated by the appropriate authority. The tribunal's focus was solely on the reasonableness of the conditions imposed for the provisional release of the goods.

Conclusion:
The tribunal modified the impugned order, allowing the provisional release of the seized goods upon execution of a bond for 100% of the value of the goods and a bank guarantee of Rs. 1 crore, along with the payment of applicable duty on the import of dry dates of UAE origin. The tribunal emphasized that this decision was limited to the provisional release and would not influence the ongoing investigation and adjudication. The appeal was allowed in these terms.

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