2023 (1) TMI 556 - AT - Customs

Appeal modifies bank guarantee in seized goods case

M/s. Classic Interiors Versus Commissioner of Customs, New Delhi

The appeal challenged an order partially allowing provisional release of seized goods and modifying the bank guarantee. The appellant sought to waive the ... Seeking provisional release of goods - reduction in bank guarantee for provisional release of the seized goods to 10% of the value of goods - mis-declaration in terms of value and also in terms of percentage of polyvinyl chloride (PVC) - HELD THAT:- There was allegation of mis-declaration of the value of the goods which has been admitted to by the appellant in letters and statements. The SCN demanded differential duty which the appellant has already deposited. The SCN has also proposed confiscation of the goods under Sections 111(l) and 111(m). After adjudication, if the goods are held liable for confiscation, they may be released on payment of redemption fine. The present case of provisional release of goods needs to be seen in this context. If the goods are confiscated and allowed redemption on payment of fine such fine has to be recovered from the appellant and some security is necessary to cover it if the goods are to be released provisionally before adjudication itself. Considering the overall factual matrix of this case we modify the impugned order reducing the amount of bank guarantee to 5% of the value of the goods. The appeal is partially allowed and the impugned order is modified to the extent that the bank guarantee for provisional release of the goods will be 5% of the value of the goods. Issues:- Appeal against the order-in-appeal partially allowing provisional release of seized goods and modifying bank guarantee.- Dismissal of writ petitions by High Court as infructuous.- Appellant's appeal to waive bank guarantee for provisional release.- Opposing arguments on the undervaluation of imported goods and pending adjudication.- Interpretation of conditions for provisional release under Customs Act.- Consideration of case laws and past judgments on similar matters.- Decision on modifying the impugned order regarding bank guarantee.The appeal was filed to challenge the order-in-appeal dated 09.12.2020, which partially allowed the appellant's appeal against the provisional release order of seized goods, reducing the bank guarantee to 10% of the goods' value. The appellant had imported goods that were seized under section 110 of the Customs Act due to mis-declaration of value and PVC percentage. The High Court dismissed writ petitions as infructuous, and subsequent proceedings led to the Additional Commissioner's order for provisional release with specific conditions. The Commissioner (Appeals) partially upheld this order, prompting the current appeal.The appellant sought to waive the bank guarantee requirement for provisional release, citing payment of the demanded differential duty and reliance on case laws supporting such requests. The appellant had admitted undervaluation of goods, and the authorized representative argued that the pending adjudication could lead to confiscation under Sections 111(l) and 111(m) due to misdeclaration. The conditions for provisional release under the Customs Act were discussed, emphasizing the need for security to cover potential fines if goods are confiscated.The tribunal considered the submissions from both sides and reviewed the case records. Acknowledging the lack of fixed rules for provisional release conditions, past judgments were analyzed to determine the appropriate course of action. In light of the admitted undervaluation and pending adjudication, the tribunal modified the impugned order, reducing the bank guarantee requirement to 5% of the goods' value for provisional release. The appeal was partially allowed based on the specific circumstances of the case.(Pronounced in open Court on 12/01/2023)